Die
Mercurii, 5°
Martii 1975
Parliamentary
Archives,
HL/PO/JU/4/3/1264
HOUSE OF LORDS
BLACK-CLAWSON INTERNATIONAL
LIMITED
v.
PAPIERWERKE
WALDHOF-ASCHAFFENBURG
AKTIENGESELLSCHAFT
Lord
Reid
Viscount
Dilhorne
Lord
Wilberforce
Lord
Diplock
Lord Simon of
Glaisdale
Lord Reid
My
lords,
The main question at issue in
this case is the proper interpretation of
section 8 of the Foreign
Judgments (Reciprocal Enforcement) Act, 1933.
The facts are not in
dispute: they have been set out by my noble and learned
friends
and I shall not repeat them. It is sufficient to say at this point
that
the Respondents, a German company, were sued by the
Appellants in
Germany in respect of dishonoured bills of exchange.
The action was dis-
missed as being time barred without any
enquiry into the merits. The
German period of limitation is
shorter than in England and the Appellants
now seek to raise the
same question here. The main issue in this case is
whether section
8 entitles the Respondents to rely on the German judgment
as
conclusive on the merits.
In this case it appears to me to
be unusually important to consider as aids
to construction all
other material which the law allows us to look at, and I
shall
first state my view on that matter. We often say that we are
looking
for the intention of Parliament, but that is not quite
accurate. We are
seeking the meaning of the words which Parliament
used. We are seeking
not what Parliament meant but the true
meaning of what they said. In
the comparatively few cases where
the words of a statutory provision are
only capable of having one
meaning, that is an end of the matter and no
further enquiry is
permissible. But that certainly does not apply to section 8.
One must first read the words in
the context of the Act read as a whole,
but one is entitled to go
beyond that. The general rule in construing any
document is that
one should put oneself " in the shoes " of the maker
or
makers and take into account relevant facts known to them when
the docu-
ment was made. The same must apply to Acts of Parliament
subject to one
qualification. An Act is addressed to all the
lieges and it would seem wrong
lo take into account anything that
was not public knowledge at the time.
That may be common knowledge
at the time or it may be some published
information which
Parliament can be presumed to have had in mind.
It has always been said to be
important to consider the " mischief"
which the Act was
apparently intended to remedy. The word " mischief "
is
traditional. I would expand it in this way. In addition to reading
the
Act you look at the facts presumed to be known to Parliament
when the
Bill which became the Act in question was before it, and
you consider
whether there is disclosed some unsatisfactory state
of affairs which Parlia-
ment can properly be supposed to have
intended to remedy by the Act.
There is a presumption which can be
stated in various ways. One is that
in the absence of any clear
indication to the contrary Parliament can be
presumed not to have
altered the common law farther than was necessary
to remedy the
"mischief". Of course it may and quite often does
go
farther. But the principle is that it the enactment is
ambiguous, that meaning
which relates the scope of the Act to the
mischief should be taken rather
than a different or wider meaning
which the contemporary situation did not
call for. The mischief
which this Act was intended to remedy may have
been common
knowledge forty years ago. I do not think that it is today.
But it
so happens that a Committee including many eminent and highly
skilled
members made a full investigation of the matter and reported
some
months before the Act was passed (Cmd. 4213K
I think that we can take this
Report as accurately stating the " mischief "
and the
law as it was then understood to be, and therefore we are
fully
entitled to look at those parts of the Report which deal
with those matters.
2
But the Report contains a great
deal more than that. It contains recom-
mendations, a draft Bill
and other instruments intended to embody those
recommendations,
and comments on what the Committee thought the Bill
achieved. The
draft Bill corresponds in all material respects with the Act
so it
is clear that Parliament adopted the recommendations of the
Committee.
But nevertheless I do not think that we are entitled to
take any of this into
account in construing the Act.
Construction of the provisions
of an Act is for the Court and for no one
else. This may seem
technical but it is good sense. Occasionally we can
find clear
evidence of what was intended, more often any such evidence, if
there
is any, is vague and uncertain. If we are to take into account
evidence
of Parliament's intention the first thing we must do is
to reverse our present
practice with regard to consulting Hansard.
I have more than once drawn
attention to the practical
difficulties that would involve but the difficulty goes
deeper.
The questions which give rise to debate are rarely those which
later
have to be decided by the Courts. One might take the views
of the promoters
of a Bill as an indication of the intention of
Parliament but any view the
promoters may have had about questions
which later come before the Court
will not often appear in Hansard
and often those questions have never
occurred to the promoters. At
best we might get material from which a more
or less dubious
inference might be drawn as to what the promoters intended
or
would have intended if they had thought about the matter, and it
would
I think generally be dangerous to attach weight to what some
other members
of either House may have said. The difficulties in
assessing any references
there might have been in Parliament to
the question before the Court are
such that in my view our best
course is to adhere to present practice.
If we are to refrain from
considering expressions of intention in Parliament
it appears to
me that a fortiori we should disregard expressions of
intention
by Committees or Royal Commissions which reported before
the Bill was
introduced. I may add that we did in fact examine the
whole of this Report
—it would have been difficult to avoid
that—but I am left in some doubt as
to how the Committee
would have answered some of the questions which we
have now to
answer, because I do not think that they were ever considered
by
the Committee.
The Committee in paragraph 2 set
out the fact that, whereas we accept
foreign judgments as
conclusive, foreign Courts do not in effect recognise
English
judgments, so that a successful plaintiff here has to fight his
case
over again on the merits. They regarded this as a substantial
grievance.
This could be avoided by making conventions with
foreign countries, but the
Committee say that there were two
difficulties. First technically we do not
enforce the foreign
judgment as such, and second that our law depends on
case law and
is not formulated in the statute book. There is nowhere in the
Report
any suggestion of any complaint, grievance or difficulty with
regard
to British or foreign judgments in favour of the defendant,
and I think that
it is quite clear that they did not consider that
there was any " mischief " with
regard to such judgments
which required the intervention of Parliament.
Moreover when they set out the
existing law as they understood it, they
do so in a way which was
entirely correct if one only has regard to a judgment
in favour of
the plaintiff or a judgment for costs in favour of a
successful
defendant, but was clearly not correct with regard to a
judgment dismissing
the plaintiff's action. A Committee of such
eminence could not have been
mistaken about the law so the only
possible inference is that the Committee
intended only to deal
with plaintiffs' judgments.
The difficulty with regard to
judgments for defendants is that an action may
be dismissed for a
variety of reasons: the case may have been decided against
the
plaintiff on the merits or for some quite different reason such as a
time
bar or some other preliminary plea.
That matter was dealt with by a
strong Court in Harris v. Quine (1869)
L.R. 4 Q.B.
653 when it was held that dismissal of an action in the Isle of
Man
because of a short period of limitation which did not destroy the
3
plaintiff's right but merely
made it unenforceable, was not a bar to subsequent
proceedings in
England on the same cause of action.
There is not much reference to
the case in subsequent authorities but it
was noted in the text
books and in the sixty odd years which elapsed before
the
Committee's Report there is no indication of any disapproval of it.
But
the Committee never mentioned it or its subject matter. The
only possible
inference is that they did not think it relevant to
their enquiry.
It has been said that it would
be strange that the Act should only deal
with judgments in favour
of a plaintiff and omit dealing with judgments in
favour of a
defendant. Looking to the matters which I have dealt with I
do not
find that in the least strange.
It is clear that the Act did not
intend to codify the whole law as to the
effect of foreign
judgments. Section 8(3) is only one proof of that. So I
approach
section 8 with the expectation that it has a limited scope.
I now turn to the Act. Clearly
its principal purpose—dealt with in Part I
—was to
facilitate the enforcement here of rights given by foreign
judgments
to recover sums of money. Besides rights given to
plaintiffs in foreign
actions, such rights might be given to
defendants on counterclaims or under
orders for costs in favour of
a successful defendant. These I may call
plaintiffs' judgments.
But Part I has no application to defendants' judgments
which
entitle them to nothing but merely protects them against claims
made
against them. It would I think be a misuse of language to say
that such a
judgment can be enforced. It can only be used as a
shield or defence.
I think that section 8 is
ambiguous so this is a case where it is permissible
to look at the
long title. It states that the Act makes provision for
the
enforcement here of certain foreign judgments, for
facilitating the enforce-
ment abroad of judgments given here and
" for other purposes in connection
with " the matters
aforesaid ". The matters aforesaid all refer to
plaintiffs'
judgments which are enforceable. I do not see here any
indication of an
intention to deal with judgments which are not
enforceable.
Section 8 is in Part II under
the heading " Miscellaneous and General ".
I do not
think that the oilier sections in Part II throw any light on its
scope.
The first question which arises
is whether section 8 has any application
at all to defendants'
judgments. There is provision in the Act for severance
and no
doubt it applies to those parts of defendants' judgments which
entitle
the defendant to some remedy. But does the section apply
at all to a
judgment or part of a judgment which merely absolves
the defendant or
dismisses the action against him? Looking to all
the matters I have men-
tioned they seem to me to make it probable
that section 8 was not intended
to deal with such judgments at
all.
Section 8 provides as follows:
"8.—(1) Subject to
the provisions of this section, a judgment to
" which Part I
of this Act applies or would have applied if a sum of
" money
had been payable thereunder, whether it can be registered or
"
not, and whether, if it can be registered, it is registered or not,
shall
" be recognised in any court in the United Kingdom as
conclusive
" between the parties thereto in all proceedings
founded on the same
" cause of action and may be relied on by
way of defence or counter-
" claim in any such proceedings.
" (2) This section shall
not apply in the case of any judgment: —
" (a) where the
judgment has been registered and the registration
" thereof
has been set aside on some ground other than—
" (i)
that a sum of money was not payable under the judgment; or
"
(ii) that the judgment had been wholly or partly satisfied ; or
"
(iii) that at the date of the application the judgment could not be
"
enforced by execution in the country of the original court:
"
or
4
" (b) where the
judgment has not been registered, it is shown (whether
" it
could have been registered or not) that if it had been registered
"
the registration thereof would have been set aside on an applica-
"
tion for that purpose on some ground other than one of the
"
grounds specified in paragraph (a) of this subsection.
" (3) Nothing in this
section shall be taken to prevent any court in
" the United
Kingdom recognising any judgment as conclusive of any
"
matter of law or fact decided therein if that judgment would have
been
" so recognised before the passing of this Act."
I find the first few lines very
obscure. The section sets out to deal with a
judgment to which
Part I applies " or would have applied if a sum of
"
money had been payable thereunder ". A plaintiff's judgment may
order
specific performance or it may be merely a declaration. It
is easy to apply
these words in such cases. But I find it
extremely difficult to apply them to
defendants' judgments. The
essence of such a judgment is that the defendant
has succeeded and
that he has no liability to pay or do anything. No sum
of money
could possibly have been payable under such a judgment. It is
only
by putting an unnatural meaning on these words that
defendants'
judgments can be brought within the section at all.
I cannot believe that good
draftsmen—as this Committee certainly were—
would have
employed such an obscure expression if the intention had
been to
deal with defendants' judgments. It was argued that it throws
us
back to section 1 (2) which is in these terms:
" (2) Any judgment of a
superior court of a foreign country to
" which this Part of
this Act extends, other than a judgment of such
" a court
given on appeal from a court which is not a superior court,
"
shall be a judgment to which this Part of this Act applies, if—
" (a) it is final
and conclusive as between the parties thereto; and
" (b) there is
payable thereunder a sum of money, not being a sum
" payable
in respect of taxes or other charges of a like nature
" or in
respect of a fine or other penalty ; and
" (c) it is given
after the coming into operation of the Order in
" Council
directing that this Part of this Act shall extend to that
"
foreign country.
" (3) For the purposes of
this section, a judgment shall be deemed
" to be final and
conclusive notwithstanding that an appeal may be
" pending
against it, or that it may still be subject to appeal, in
"
the courts of the country of the original court."
It is said that the effect of
these obscure words in section 8(1) is to make
the section apply
to all judgments which would come within the terms of
section 1(2)
if condition (b) were omitted. Besides the fact that this
would
be a very odd way of bringing in another section of the Act
that cannot be
right. If (b) is omitted then section 1(2)
would apply to every kind of
judgment including judgments on
status, family matters and in rem. No
one suggests that
section 8 was meant to deal with them. I am not at all
clear what
meaning the Respondents would attach to these obscure words
if
mere reference back to section 1 (2) will not do.
Then it is said that the
references in the last lines of section 8(1) to
defence and
counterclaim shew that the section must have been intended
to deal
with defendants' judgments. I do not agree.
It is necessary to look closely
at the preceding words in the section. It
makes judgments to which
it applies conclusive " in all proceedings founded
"on
the same cause of action". I think that cause of action
normally
means a right alleged to flow from the facts pleaded. But
often cause of
action is used to denote those facts, for example,
a statute may provide
that the cause of action must arise within a
particular area: that must
mean the facts and not the right.
5
Here I think it must mean the
facts. Suppose that the defendant abroad
raises proceedings here
on the same facts as those in the foreign case.
If cause of action
meant right only one person has the cause of action
and the
section would not apply at all because the proceedings here would
not
be founded on the same cause of action. That could not have
been
intended.
But if cause of action refers to
the facts there is no difficulty in applying
this part of the
section even if the section has no application to
defendants'
judgments. A successful plaintiff abroad is entitled
to disregard his foreign
judgment and sue here again on his
original right because a right does
not merge in a foreign
judgment. It might pay him to do that because
he thinks that he
could get here an even more favourable judgment than
he got
abroad. But this section would prevent that. The original
defendant
could plead the foreign plaintiff's judgment as a
defence to prevent the
plaintiff's attempt to do better for
himself here. Similarly if the successful
plaintiff abroad held an
unsatisfied foreign judgment and he were sued
here in some other
cause of action, he could counterclaim in respect of
his
unsatisfied foreign judgment. So there is ample scope for the
operation
of the last part of the subsection even if the section
applies solely to
plaintiffs' judgments.
I am therefore of opinion that
section 8 has no application to the present
case and does not
entitle the Respondent to rely on the foreign judgment
on a
preliminary point to prevent enquiry into the merits here. If
further
justification for my view be needed, it would I think be
unjust if a foreign
judgment on a preliminary point were in itself
sufficient to prevent enquiry
into the merits here.
I may add that if it were held
that the section does apply to defendants'
judgments, I would,
perhaps with difficulty, agree with those of your
Lordships who
think that the Appellant should succeed.
Then the Respondents maintain
that Harris v. Quine was wrongly decided.
I am
clearly of opinion for reasons given by your Lordships that
the
decision was right.
Finally I agree with your
Lordships in the matter of discretion. I would
therefore allow the
appeal.
Viscount Dilhorne
My lords,
Under a contract made in
December 1961 the Appellants agreed to sell
paper making machinery
to a German company, whose rights and liabilities
were acquired by
the Respondents as a result of a merger in 1970. It will
be
convenient to refer to both companies as the Respondents. The
price
to be paid was £1,210,162. As part payment of the
purchase price the
Respondents accepted 20 Bills of Exchange drawn
on them by the Appel-
lants. Each Bill had a face value of £48,406
and was drawn, negotiated and
payable in London. Two Bills were to
mature every six months between
August 1963 and February 1968.
In 1965 the Respondents
complained of delays in delivery and of defects
in the machinery
delivered. This was referred to arbitration and despite
the time
that has elapsed, that arbitration has not yet been concluded and
is
not likely to be for a considerable time.
Thereafter the Respondents
refused to honour any of the Bills which
matured.
Two Bills which had been
dishonoured when presented by Barclays Bank
by whom they had been
discounted, were the subject of litigation in this
country and in
Germany. The Bank's claim was strenuously resisted at every
6
stage. When judgment was given
in this country for the Bank, it was not
satisfied. When the Bank
sought to enforce the judgment in Germany, that
was resisted on
the ground that the Respondents had had no opportunity
of stating
their case. This plea was finally rejected by the Federal
Supreme
Court of Germany on the 25th March, 1970.
In view of the difficulties that
the Bank had encountered in getting pay-
ment of the amounts due
on these two Bills, when two Bills due for payment
on the 31st
August, 1966 were dishonoured, the Bank called on the Export
Credit
Guarantee Department to implement a guarantee they had given to
the
Bank and that Department in turn called on the Appellants to
implement
their undertaking to indemnify the Department against
any monies the
Department had to pay the Bank. In accordance with
their agreement with
the Bank, the Appellants bought these Bills
in August 1972 and so became
holders of them for value.
In the same month, on the 24th
August, 1972 the Appellants began pro-
ceedings against the
Respondents in the District Court of Munich. Five days
later the
Appellants applied ex parte in this country for leave to issue
a writ
against the Respondents claiming the amount due on the two
Bills and
interest and also asking leave to serve notice of the
writ on the Respondents
in Germany. They feared that the
proceedings in Germany might be held
to be time barred in Germany
; and if the writ was not issued, their claim
would shortly have
become statute barred in this country. They were given
the leave
for which they asked.
On the 30th November, 1972 the
District Court of Munich dismissed the
Appellants' claim, holding
that under German law the applicable period of
limitation was
three years and so that the Appellants' claim was time barred.
Notice of the issue of the writ
was served on the Respondents on the 14th
August, 1973.
The Respondents did not enter an
appearance but by summons sought an
order that the writ, service
of notice thereof and all subsequent proceedings
thereon should be
set aside. The Master refused to make that order and
the
Respondents' appeal to Talbot J., The Judge in Chambers, was
dis-
missed. The Respondents then appealed to the Court of Appeal
which
gave judgment in their favour on the 19th March 1974.
On the 27th March, 1974 the
Munich Court of Appeal allowed the Appel-
lants' appeal against
the decision of the District Court on the ground that
the English
period of limitation, namely six years, was applicable to
their
claim. The Appeal Court referred the case back to the
District Court for
continuation of the proceedings and in those
proceedings the Respondents
are entitled to put forward any
defence they may have to the claim.
The Respondents have appealed
against the decision of the Munich Court
of Appeal to the Federal
Supreme Court but that appeal has not yet been
heard.
In the Court of Appeal the
Respondents put forward a new point based
on section 8(1) of the
Foreign Judgments (Reciprocal Enforcement) Act 1933,
and it was on
this ground that the Court (Lord Denning M.R., Megaw and
Scarman
L.JJ.) allowed the appeal.
The long title of that Act reads
as follows:
" An Act to make provision
for the enforcement in the United
" Kingdom of judgments
given in foreign countries which accord reci-
" procal
treatment to judgments given in the United Kingdom, for
"
facilitating the enforcement in foreign countries of judgments given
in
" the United Kingdom, and for other purposes in connection
with the
" matters aforesaid."
7
Part I of the Act is headed "
Registration of Foreign Judgments " and is
directed to
securing the enforcement of foreign judgments in this country.
Part
II is headed " Miscellaneous and General ". Section 8 is
the first section
in this Part and reads as follows:
" 8.—(1) Subject to
the provisions of this section, a judgment to which
" Part I
of this Act applies or would have applied if a sum of money.
"
had been payable thereunder, whether it can be registered or not,
and
" whether, if it can be registered, it is registered or
not, shall be recog-
" nised in any court in the United
Kingdom as conclusive between the
" parties thereto in all
proceedings founded on the same cause of action
" and may be
relied on by way of defence or counterclaim in any such
"
proceedings.
" (2) This section shall
not apply in the case of any judgment: —
" (a) where
the judgment has been registered and the registration
"
thereof has been set aside on some ground other than: —
"
(i) that a sum of money was not payable under the judgment; or
"
(ii) that the judgment had been wholly or partly satisfied ; or
"
(iii) that at the date of the application the judgment could not be
"
enforced by execution in the country of the original court; or
"
(b) where the judgment has not been registered, it is shown
(whether
" it could have been registered or not) that if it
had been registered
" the registration thereof would have
been set aside on an applic-
"ation for that purpose on some
ground other than one of the
" grounds specified in paragraph
(a) of this subsection.
" (3) Nothing in this
section shall be taken to prevent any court in the
" United
Kingdom recognising any judgment as conclusive of any matter
"
of law or fact decided therein if that judgment would have been so
"
recognised before the passing of this Act."
The judgments to which Part I of
the Act applies are defined in section
1(2) and (3) of the Act
which read as follows:
" (2) Any judgment of a
superior court of a foreign country to which
" this Part of
this Act extends, other than a judgment of such a court
"
given on appeal from a court which is not a superior court, shall be
a
" judgment to which this Part of this Act applies, if—
" (a) it is final
and conclusive as between the parties thereto ; and
" (b)
there is payable thereunder a sum of money, not being a sum
"
payable in respect of taxes or other charges of a like nature or
"
in respect of a fine or other penalty ; and
" (c) it is given
after the coming into operation of the Order in Council
"
directing that this Part of this Act shall extend to that foreign
"
country.
"(3) For the purposes of
this section, a judgment shall be deemed to
" be final and
conclusive notwithstanding that an appeal may be pending
"
against it, or that it may still be subject to appeal, in the courts
of the
" country of the original court."
Such a judgment may be
registered if it has not been wholly satisfied and
if it is not
one which could not have been enforced by execution in the
country
of the original court. If a judgment of a foreign court is
registered,
then for the purposes of execution, if it is not
competent to a party to apply
for the registration to be set aside
or such an application has been finally
determined, the registered
judgment is to be of the same force and effect as
a judgment
originally given by the registering court. Proceedings may be
taken
on it as if it were a judgment of that court and the judgment is to
carry
interest as if it were a judgment of that court (section
2(2)).
Part I of the
Act only applies to judgments under which a sum of money
is
payable. Section 8(1) applies to all judgments to which Part I
applies and
also to judgments to which that Part does not apply
but would have applied
if money had been payable under them, that
is to say judgments which are
final and conclusive and given after
the Order in Council applying Part I to
the foreign country
concerned has been made (section l (2)(a) and (c)).
8
I cannot therefore see that
there is any ground for concluding, as was
contended by the
Appellants, that section 8(1) only applies to judgments
which can
be enforced. Section 8(1) does not deal at all with enforcement.
That
is dealt with in Part I.
As it was not disputed that in
this case section l(2)(a) and (c) were satisfied,
in
my opinion the judgment of the District Court of Munich was one to
which
section 8(1) applies.
That subsection goes on to
provide that such a judgment shall be recognised
in any court in
the United Kingdom as " conclusive between the parties
"
thereto ", and to state when it is to be so recognised, namely "
in all
" proceedings founded on the same cause of action ".
It concludes by saying
that it may be relied on by way of defence
or counterclaim in any such
proceedings.
The subsection does not
expressly state of what the judgment is to be
conclusive and the
controversy in this appeal is as to that.
In Thoday v. Thoday
[1964] P. 181 Diplock L.J., as he then was. said at
p. 197
that there were two species of estoppel per rent judicatam.
The
first, which he called " cause of action estoppel"
was that which prevents
a party to an action from asserting or
denying, as against the other party,
the existence of a particular
cause of action, the non-existence or existence
of which has been
determined by a court of competent jurisdiction in
previous
litigation between the same parties. The second, which my noble
and
learned friend called " issue estoppel " arises where in
previous litigation
one of the matters in issue between the
parties has already been decided
by a competent court.
Lord Denning M.R. in the Court
of Appeal held that section 8(1) dealt
with " cause of action
estoppel " and section 8(3) with " issue estoppel";
and
that as the proceedings in England would be founded on the same
cause
of action as those in Germany, the judgment in Germany was
to be treated
as conclusive. That judgment did not decide that
money was not owed by
the Respondents to the Appellants but that
it was not recoverable owing
to the German period of limitation.
Nevertheless, in Lord Denning's
view, section 8(1) operated to
prevent the Appellants from suing in this
country on the same
cause of action even though the period of limitation
under English
law had not expired.
Megaw L.J. and Scarman L.J. held
that section 8(1) displaced the
common law as to the enforcement
and recognition of foreign judgments,
and agreed that the judgment
of the German court prevented proceedings
being instituted in this
country.
The contrary view advanced by
the Appellants was that the judgment
of the foreign court was only
by section 8(1) made conclusive as to the
matters decided therein
and so was conclusive only on the question whether
the limit
imposed by German law on the time within which actions must
be
instituted applied and barred the action.
Although since 1964 the use of
the expressions " cause of action estoppel "
and "
issue estoppel " has become common, I do not think that that
division
into two species of estoppel per rem judicatam was
recognised in 1933
or that those expressions were then used. If
that be right, it would indeed
be singular if Parliament had then
intended section 8(1) only to apply
to " cause of action
estoppel" and section 8(3) only to " issue estoppel".
In this connection I think the
way in which section 8(3) is drafted is
illuminating. If that
section was intended to cover issue estoppel, I would
not have
expected it to commence with the words " Nothing in this
section
"shall be taken to prevent . . .". That is a
formula frequently used in
statutes when a provision is inserted
ex abundanti cautela. Its use in
section 8(3) leads me to
the conclusion that section 8(3) was not intended to
cover issue
estoppel as a distinct species of res judicata but was
inserted
9
to ensure that the Act did not
by section 8(1) reduce the recognition given
by the courts of this
country under the common law to foreign judgments.
It follows that
section 8(1) was not intended, if this be so, to cover only
one
species of estoppel per rem judicatam.
Our attention was drawn to the
fact that the Foreign Judgments (Reciprocal
Enforcement) Act 1933
was passed by Parliament on the 13th April, 1933
shortly after the
Report of a Committee called the Foreign Judgments
(Reciprocal
Enforcement) Committee had been presented to Parliament.
That was
done in December 1932. The Committee had been appointed
by the
then Lord Chancellor and its chairman was Greer L.J. It had
among
its members many very eminent lawyers. To its Report were annexed
a
draft of Conventions to be entered into with foreign countries and
a
draft Bill, clause 8 of which was in precisely the same terms as
section 8
of the Act.
The question was debated to what
extent could recourse be had to the
Committee's Report as an aid
to the construction of section 8.
Ever since Heydon's Case
(1584) 3 Co Rep 7a it has been recognised
that there are, in
connection with the interpretation of statutes, four questions
to
be considered: (1) what was the common law before the making of
the
Act; (2) what was the mischief or defect for which the law did
not provide ;
(3) what remedy Parliament had provided and (4) the
reason for the remedy
(see Eastman Photographic Materials Co.
v. Comptroller of Patents [1898]
A.C. 571).
In that case Lord Halsbury cited
a passage from the report of com-
missioners appointed to inquire
into the duties, organisation and arrange-
ments of the Patent
Office in relation to trade marks and designs. That
passage not
only referred to what the existing law was but also to what
the
commissioners thought it ought to be ; and after citing it. Lord
Halsbury
said:
" My Lords, I think no more
accurate source of information as to
" what was the evil or
defect which the Act of Parliament now under
" construction
was intended to remedy could be imagined than the
" report of
that commission."
Many instances were cited in the
course of the argument where the Courts
have had regard to the
reports of such commissions or committees ; e.g. in
Rookes v.
Barnard [1964] AC 1129 and Heaton's Transport (St.
Helens)
Ltd. v. Transport and General Workers Union [1973]
A.C. 15 to the Report
of the Royal Commission on Trade Unions and
Employees' Associations,
in National Provincial Bank Ltd., v.
Ainsworth [1965] AC 1175 to the
Report of the Royal
Commission on Marriage and Divorce and in Letang v.
Cooper
[1965] 1 QB 232 to the Report of the Tucker Committee on
the
Limitation of Actions. Other instances could be cited and,
despite the
observations of Lord Wright with which Lord Thankerton
agreed in Assam
Railways v. Commission of Inland Revenue
[1935] AC 445, it is now, I
think, clearly established that
regard can be had to such reports.
In that case counsel had sought
to refer to recommendations of the Royal
Commission on Income Tax
of 1920 and to argue that the Finance Act 1920
followed those
recommendations. The House did not allow him to do so,
Lord Wright
saying at p. 458:
". . . on principle no such
evidence for the purpose of showing the
" intention, that is
the purpose or object, of an Act is admissible ; the
"
intention of the Legislature must be ascertained from the words of
the
" statute with such extraneous assistance as is
legitimate: as to this,
" I agree with Farwell L.J. in Rex
v. West Riding of Yorkshire County
" Council [1906] 2 KB 676 where he says:—'I think the true rule
" ' is
expressed with accuracy by Lord Langdale in giving the judgment
"
' of the Privy Council in the Gorham case in Moore 1852
edition p. 462
" ' we must endeavour to attain for ourselves
the true meaning of the
" ' language employed '—in the
Articles and Liturgy—' assisted only
10
" ' " by the
consideration of such external or historical facts as we may
"
' " find necessary to enable us to understand the subject matter
to
" ' " which the instruments relate, and the meaning
of the words
" ' " employed "'.... It is clear
that the language of a Minister of
" the Crown in proposing
in Parliament a measure which eventually
" becomes law is
inadmissible and the Report of Commissioners is even
" more
removed from value as evidence of intention because it does
"
not follow that their recommendations were accepted."
Despite these observations, in
Shenton v. Tyler [1939] 1 Ch. 620 (C.A.)
Sir Wilfred
Green M.R. cited a recommendation of the Common Law
Commissioners
of 1852 saying that it was accepted by the Legislature and
embodied
in the Evidence Amendment Act 1853.
The task confronting a Court
when construing a statute is to determine
what was Parliament's
intention. In a perfect world the language employed
in the Act
would not be capable of more than one interpretation but due in
part
to the lack of precision of the English language, often more than
one
interpretation is possible. Then, to enable Parliament's
intention to be
determined, as I understand the position, one may
have regard to what
was the law at the time of the enactment and
to what was the mischief at
which it was directed.
That one can look at such
reports to discern the mischief is now, I think,
established but
there is a difference of opinion as to what may be looked at
in
such reports. Can one have regard to the recommendations of
the
Committee or. Commission? Where a draft Bill is attached to
the report,
as is now frequently the case, and was the case in
this instance, can one
refer to the terms of the draft Bill when
they have been enacted without
material alteration by Parliament?
Can one refer to the notes on the
clauses of the draft Bill
appended to it by the Committee, and in the present
case to the
terms of the draft Conventions prepared by the Committee and
attached
to their Report? Is it legitimate to make use of such parts of
a
report as an aid to the construction of the Act?
In my opinion it is. The reason
why one is entitled to consider what
was the mischief at which the
Act was aimed is surely that that will throw
a revealing light on
the object and purpose of the Act, that is to say the
intention of
Parliament; and, applying Lord Halsbury's observations cited
above,
what more accurate source of information both as to the law at
the
time and as to the evil or defect which the Act was intended
to remedy can
be imagined than the report of such a Committee
matter, the reports of the
Law Commission.
The contrary view seems to
impose on judges the task of being selective
in their reading of
such reports. What part may they look at and what
not? Have they
to stop reading when they come to a recommendation?
Have they to
ignore the fact, if it be the fact, that the draft Bill was
enacted
without alteration? To ignore what the Committee intended
the draft Bill
to do and what the Committee thought it would do? I
think not.
I think so to hold would be to
draw a very artificial line which serves no
useful purpose. What
weight is to be given to a Committee's recommenda-
tions is
another matter. That may depend on the particular circumstances.
If
the report of the Committee merely contains recommendations, while
I
think that regard can be had to them, little weight may be
attached to them
as it may not follow that Parliament has accepted
them. Parliament may
have decided to go further or not as far. But
where, as here, a draft Bill
is attached to the report, then one
can compare its provisions with those
of the Act and if there is
no difference or no material difference in their
language, then
surely it is legitimate to conclude, as Greene M.R. did in
Shenton
v. Tyler (supra), that Parliament had accepted the
recommendation
of the Committee and had intended to implement it.
In such a case that
recommendation becomes as it did in Eastman
Photographic Material Ltd. v
Comptroller General of Patents
(supra) the most accurate source of
information as to the
intention of Parliament.
11
Of course, it may be that the
language used in the draft Bill and in the
Act is defective and
does not carry out the Committee's and Parliament's
intention.
Regard must be had to that possibility, however remote it may be.
In Letang v. Cooper
[1965] 1 QB 232 Lord Denning M.R. at p. 240
said:
" It is legitimate to look
at the report of such a committee" (the
Tucker Committee on
the Limitation of Actions) "so as to see what
" was the
mischief at which the Act was directed. You can get the
"
facts and surrounding circumstances from the report so as to see
the
" background against which the legislation was enacted.
This is always
" a great help in interpreting it. But you
cannot look at what the
" committee recommended, or at least,
if you do look at it, you should
" not be unduly influenced
by it. It does not help you much, for
" the simple reason
that Parliament may, and often does, decide to
" do something
different to cure the mischief."
While I respectfully agree that
recommendations of a Committee may
not help much when there is a
possibility that Parliament may have decided
to do something
different, where there is no such possibility, as where the
draft
Bill has been enacted without alteration, in my opinion it can safely
be
assumed that it was Parliament's intention to do what the
Committee
recommended and to achieve the object the Committee had
in mind. Then,
in my view the recommendations of the Committee and
their observations
on their draft Bill may form a valuable aid to
construction which the
Courts should not be inhibited from taking
into account.
It does not follow that if one
can have regard to the whole of a
Committee's report, one ought
also to be able to refer to Hansard to see
what the Minister in
charge of a Bill has said it was intended to do. In
the course of
the passage of a Bill through both Houses there may be
many
statements by Ministers, and what is said by a Minister in
introducing a
Bill in one House is no sure guide as to the
intention of the enactment,
for changes of intention may occur
during its passage. But when a Bill
is drafted by such a Committee
as that in this case and enacted without
alteration, then. I
repeat, in my opinion it is legitimate to have regard to
the whole
of the Committee's Report, including the terms of the draft
Bill
attached to it, to the Committee's notes on its clauses and
to the draft
Conventions annexed to the Report, for they
constitute a most valuable
guide to the intention of Parliament.
The Report of the Committee
begins with a summary of the Committee's
recommendations and the
reason therefor. They were primarily concerned
with securing that
English judgments should be recognised and enforced in
foreign
countries without the case having to be fought again on the merits
in
a foreign court. To that end Conventions had to be entered into
with
foreign countries and the Committee had ascertained that some
foreign
countries would be willing to allow judgments to be
enforced " on similar
" conditions to those on which we
enforce theirs, provided that those
" conditions are defined
in a Convention ". They pointed out that there
were two
difficulties in the way of concluding such Conventions: (1)
that
under the then existing procedure foreign judgments were not
enforced as
such, and (2) " The principles on which English
courts accept foreign
" judgments as conclusive depend on
case law and are not to be found
" formulated in the Statute
Book ". Their aim was, they said, to remove
these
difficulties ; and, they said, so far as the position in England
was
concerned, the change they proposed involved " no radical
alterations of
" the present position ".
Paragraph 4 of their Report
appears under the heading " The Present
" Position, (i)
Recognition and enforcement of foreign judgments in
" England
", and reads as follows:
" Under English common law
a foreign judgment (other than a
" judgment given in a
criminal or fiscal matter), though it does not
" operate in
England to merge the original cause of action, is, provided
12
" that certain reasonably
well-defined conditions are satisfied, recognised
" as
conclusive between the persons who were parties to the proceedings
"
in the foreign court as regards the question therein adjudicated*
upon,
" and can be relied upon by any of the said parties or
their privies,
" if further proceedings are brought in
England by any other such party
"or his privy in respect of
the same cause of action."
To this
paragraph there was the following footnote:
" * The words ' question
adjudicated upon' refer to the actual decision
" (the
operative parts of the judgment) as opposed to the grounds or
"
reasoning upon which it may be based, in the course of which other
"
points of law or fact may have been incidentally decided as prelim-
"
inaries (necessary or otherwise) to the final conclusion. The
authoritise
" on the effect of foreign judgments in English
law are not very
" numerous. They appear, however, clearly to
justify the statement
" of the position given above though it
may be that this statement is
" slightly too narrow. This
statement is in any case only intended to
" apply to
judgments in ordinary proceedings in personam."
The wording of this paragraph
closely resembles that of section 8(1)
of the Act and the passages
in the Report to which I have referred establish,
in my opinion,
that by Part I of the Bill the Committee sought to secure
that
certain foreign judgments were capable of being enforced as such
in
English courts and by section 8 to state in a statute the
principles on which
English courts recognise foreign judgments as
conclusive. There is nothing
to be found in these passages or
elsewhere in the Report to support the
contention that it was the
Committee's intention to alter or depart in any
way from the
principles on which English courts had under the common law
regarded
foreign judgments as conclusive.
Paragraph 10 of the Report
states the reasons in the Committee's view
for " the present
failure " of foreign courts to recognise and enforce
British
judgments and the steps necessary to remedy that position.
In paragraph
10(b) they say:
" The whole of the English
procedure, including the conditions
" required for the
recognition of a foreign judgment as conclusive,
" depends
upon rules of Common Law only. There is always a natural
"
tendency for the foreign court to suppose that such Common Law
"
rules are too indefinite to be applied as rigidly as the provisions
of
" a statute or a code, and that they are largely
discretionary. . . .".
The Report continues:
" Therefore, in the case of
these countries, in practice ... the
" conclusion of an
international convention — containing reciprocal
"
obligations for the recognition and enforcement of judgments which
"
will be made binding as part of the municipal law of the foreign
"
country, together with the statement of our own rules in statutory
form
" —appears to be the only manner by which
everything like reciprocal
" treatment can be secured in the
mutter of recognition and enforcement
" of British
judgments."
and in paragraph 16 the Report
states:
" It was, however,
desirable that such legislation, in laying down
" the
conditions under which, in return for reciprocal treatment, the
"
judgments of foreign countries should be enforced, should not
depart
" from the substantive principles of the common law
applicable to
" foreign judgments in general."
In paragraph 23 the Committee
emphasised the manner in which the draft
Bill and rules on the one
hand and the draft conventions on the other had
been prepared "
concurrently with and in the light of each other, so as to
"
render the arrangements proposed in connexion with foreign
judgments
" in the United Kingdom consistent with the
conventions, and vice versa."
13
One Annex to the Report contains
a draft Convention with Germany.
Article 3 thereof deals with the
recognition of judgments and Article 3(2)
provides that a judgment
which is recognised " shall be treated as conclusive
"
as to the matter thereby adjudicated upon in any further action
between
" the parties . . . and as to such matter shall
constitute a defence in a further
" action between them in
respect of the same cause of action." No such
Convention was
entered into with Germany until 1961 and Article III(4) of
that
Convention corresponds with Article 3(2) of the draft.
In their notes on the clauses of
the draft Bill, the Committee say:
" Clause 8 " (now
section 8 of the Act) " contains the provisions of the
"
Bill with regard to the recognition of foreign judgments as final
and
" conclusive between the parties as regards the question
therein adjudi-
" cated upon. It is entirely in accordance
with the position at Common
" Law " (as explained in
paragraph 4 of the Report) " and clause 8(3) "
(section
8(3) of the Act) " saves the existing Common Law rules in any
"
cases where the rule laid down by the Act may be narrower in
"
operation than the Common Law."
The Report thus shows, in my
opinion beyond any question of doubt,
that it was not the
Committee's intention by clause 8 to make any change in
the
existing common law rules as to recognition of foreign judgments;
that
clause 8(3) was inserted ex abundanti cautela and that
clause 8(1) was only
intended to operate to make a judgment
conclusive between the parties as
to the matter thereby
adjudicated upon.
Unfortunately the Report was not
brought to the attention of the Court of
Appeal.
Parliament by enacting clause 8
without alteration must, in my opinion,
have intended to implement
the intentions of the Committee and I can see
no ground for
holding that they did not effectively do so.
What then was the question
adjudicated upon by the District Court of
Munich on the 30th
November, 1972? It was not that no money was owed
by the
Respondents to the Appellants. The expert evidence in this case
made
it clear that the Appellants' right to payment was not extinguished
by
that decision. It was not a judgment " on the merits ",
an expression used
not infrequently by lawyers, and used by the
Committee in paragraph 1 of
their Report and one to which I must
confess I have no difficulty in attach-
ing a meaning. It was a
decision that the German period of limitation
applied and that the
Appellants' claim was consequently time barred.
In these circumstances what was
the position at common law. That was
in my opinion clearly settled
by the decision in Harris v. Quine (1869)
L.R.4
Q.B.653.
There it was held that a Manx
statute which provided a three year period
of limitation barred
the remedy but did not extinguish the debt and that
proceedings to
recover the debt, though time barred in the Isle of Man, could
be
brought in this country. In the course of his judgment Blackburn J.
said:
"... it was said that the
plea . . . would shew that the Manx court
" had determined
the matter and that the matter ought not to be litigated
"
again in the courts of this country ; and, no doubt, wherever it can
be
" shewn that a court of competent jurisdiction has decided
the matter,
" the plaintiff is estoppel from disputing the
decision, or litigating the
" matter in another court, while
the decision of the first court remains
" unreversed. But, in
the present case, all that the Manx court decided
" was, that
in the courts of the Isle of Man the plaintiffs could not
"
recover."
So here all
that the German court decided was that in the German courts
the
Appellants could not recover.
14
It was contended that this case
was wrongly decided. I found that argu-
ment entirely
unconvincing. It is a decision which has stood unchallenged
since
1869. It was submitted that the Committee must when preparing
their
Report have overlooked it. I cannot accept that. It is a decision
cited
in Dicey's Conflict of Laws without any adverse comment and
in the 1st
Edition of that work as authority for the proposition
that
"... it is not an answer to
an action in England if it be ... a judg-
" ment which,
though it decides the cause finally in the country where it
"
is brought, does not purport to decide it on the merits, e.g., if it
is
" given in favour of the defendant on the ground that the
action is
" barred by a statute of limitations."
If the Act of 1933 had not been
passed, then under the common law, in the
light of this decision,
proceedings by the Appellants in England would not
have been
barred by the decision of the Munich court. As in my opinion
section
8 of the Act was intended to and does preserve the common
law
position without alteration, the Respondents' claim that that
decision prevents
proceedings in England must be rejected.
In the Court of Appeal some
importance was attached to the concluding
words of section 8(1),
that the judgment is to be recognised as conclusive
between the
parties in all proceedings founded on the same cause of action
and
" may be relied on by way of defence or counterclaim in any
such
" proceedings ". Res judicata may be relied
on by way of defence but the
need to provide that it may be relied
on by way of counterclaim founded on
the same cause of action is
somewhat obscure. Whatever its content be, the
inclusion of the
reference to a counterclaim does not, in my view, answer
the
question or throw a light on the answer to the question of what is
a
judgment to be recognised as conclusive? In my opinion, though
the words
"of the matter adjudicated upon" are not in
section 8(1), though they
were in the draft Convention and in
paragraph 4 of the Report, nevertheless
the language of that
subsection provides that a judgment to which the sub-
section
applies is to be conclusive of what it decides and not of what it
does
not decide. And the judgment of the Munich court did not
decide that
money was not owing by the Respondents to the
Appellants. It was not a
decision on the merits of the Appellants'
claim.
I would therefore allow the
appeal. But the position has changed since
the Court of Appeal's
decision. The judgment of the Munich Court has
been reversed and
that judgment reversing it is now under appeal.
In these circumstances while
leave should be given to issue the writ and to
serve notice
thereof on the Respondents, thereafter there should be a stay
pending
the decision of the Federal Supreme Court and with liberty to
apply
after the decision of the Court has been given. I can see
that formidable
arguments may be advanced, if the Federal Supreme
Court upholds the
reversal of the decision of the Munich court,
for saying that the Appellants,
having chosen the German courts as
the forum and as the case can then be
heard on its merits, should
not in the exercise of discretion be allowed at the
same time to
proceed in the courts of this country. But it is not necessary
or
desirable to express any opinion on that now.
For the reasons I have stated,
in my opinion this appeal should be allowed.
Lord Wilberforce
MY LORDS,
This appeal is essentially
concerned with the interpretation of section 8(1)
of the Foreign
Judgments (Reciprocal Enforcement) Act, 1933. From the
facts which
have been fully stated I select those necessary for our decision.
1. The present action is brought
upon two Bills of Exchange drawn by the
Appellants and accepted by
a predecessor in business of the Respondents-
it is not disputed
that the Respondents have succeeded to any liability on
these
Bills. The proper law of these Bills is English law. The German
15
proceedings were brought by the
Appellants against the Respondents on
these same Bills after
dishonour.
Action on the Bills in England
is not, we must assume, barried by the
English Limitation Act,
1939.
In Germany, a three year period
of limitation applies to Bills of
Exchange. If the German
period is applied to the Bills, action upon them
is barred by
German law. The question litigated in Germany, upon which
the
German Courts have differed, is whether in proceedings before a
German
court the German period does apply. The basis of the
affirmative decision
of the District Court of Munchen is
(briefly) that limitation is, under German
law, classified as a
matter of substance, not of procedure; that as the proper
law of
the Bills is English law, this involves the application by a
German
Court of English law ; that under English law limitation
is regarded as a
matter of procedure; that, applying the doctrine
of renvoi (accepted by the
German Court), reference back has to
be made to the lex fori, i.e., German
law, so that the
proceedings were barred.
According to expert evidence,
German law, though classifying limit-
ation as a matter of
substance, did not, in relation to the subject matter of
dispute,
extinguish the right, but did affect the remedy.
As this point is crucial, I
quote certain passages from the evidence filed
on behalf of the
Respondents:
" In German law what is
described in England as the limitation of
" actions does not
extinguish the right. Nonetheless such limitation is
" a
matter of substance, not of procedure." Dr. F. A. Mann.
" The completion of the
limitation affects the substantive quality of
" the
right. Notwithstanding the limitation it is true the right
remains
" in existence. Its effect, however, is
weakened by the fact that the
" obligor is entitled
permanently to refuse performance."
Professor Feimehl, commenting on
the German Civil Code, section 222,
cited by Dr. F. A. Mann:
"... the position is that,
while the debts under the bills are not
" extinguished, the
defendants are under no duty to pay them because
" they have
a permanent answer to them." Dr. F. A. Mann.
5. The judgment of the District
Court of Munchen, dated 30th November,
1972, is in evidence. U
consists of a single document containing (i) a dis-
positive part,
(ii) a statement of facts, (iii) grounds for the decision.
The
dispositive part stales " The suit is dismissed ".
The grounds for decision
set out fully the grounds in law for
holding that the claim is barred by the
German law as to
limitation. I mention this point because the Respondents
contend
that the " judgment " to be recognised under the Act of
1933 is the
dispositive provision dismissing the suit and
nothing more.
After this preface I come to the
Act of 1933. It is in two parts. Part I
contains provisions for
the enforcement of foreign judgments by registration.
Part II
contains miscellaneous and general provisions starting with section
8,
which deals with recognition. The question for decision is
whether, and if so
to what extent, section 8(1) applies to the
present situation. There are two
issues. The first is whether the
subsection applies at all to foreign judgments
dismissing a suit,
i.e.. in favour of a defendant: the Appellants' contention
is that
it only applies to judgments which could, if certain other
elements
existed (e.g., an order to pay money), be enforceable
under Part I. The
second issue is for what purpose and to what
extent a foreign judgment is
" conclusive ". The
Appellants' contention is that it is to be conclusive as
to any
matter adjudicated upon, but no further. Since in this case all
that
was adjudicated upon was that the Plaintiffs have no remedy
in Germany
upon the Bills, by reason of the expiry of the German
limitation period,
recognition of this fact does not prevent the
Appellants from suing in
England. I shall deal first with the
second point.
My Lords, we are entitled, in my
opinion, to approach the interpretation
of this subsection, and of
the 1933 Act as a whole, from the background of
16
the law as it stood, or was
thought to stand, in 1933 and of the legislative
intention. As to
these matters the Report to which my noble and learned
friend,
Lord Reid, has referred is of assistance. He has set out in
his
opinion the basis upon which the Courts may consult such
documents.
I agree with his reasoning and I only desire to add an
observation of my
own on one point. In my opinion it is not proper
or desirable to make
use of such a document as a Committee or
Commission report, or for that
matter of anything reported as said
in Parliament, or any official notes on
clauses, for a direct
statement of what a proposed enactment is to mean
or of what the
Committee or Commission thought it means—on this point
I am
in agreement with my noble and learned friend Lord Diplock. To
be
concrete, in a case where a Committee prepared a draft Bill and
accompanies
that by a clause by clause commentary, it ought not to
be permissible,
even if the proposed Bill is enacted without
variation, to take the meaning of
the Bill from the commentary.
There are, to my mind, two kinds of reason
for this. The first is
the practical one, that if this process were allowed
the Courts
would merely have to interpret, as in argument we were invited
to
interpret, two documents instead of one—the Bill and the
commentary
on it, in particular Annex V para. 13. The second is
one of constitutional
principle. Legislation in England is passed
by Parliament, and put in the
form of written words. This
legislation is given legal effect upon subjects
by virtue of
judicial decision, and it is the function of the Courts to say
what
the application of the words used to particular cases or
individuals
is to be. This power which has been devolved upon the
judges from
the earliest times is an essential part of the
constitutional process by which
subjects are brought under the
rule of law—as distinct from the rule of
the King or the
rule of Parliament; and it would be a degradation of
that process
if the Courts were to be merely a reflecting mirror of what
some
other interpretation agency might say. The saying that it is
the
function of the Courts to ascertain the will or intention of
Parliament is
often enough repeated, so often indeed as to have
become an incantation.
If too often or unreflectingly stated, it
leads to neglect of the important
element of judicial construction
; an element not confined to a mechanical
analysis of today's
words, but, if this task is to be properly done, related
to such
matters as intelligibility to the citizen, constitutional property,
con-
siderations of history, comity of nations, reasonable and
non-retroactive
effect and, no doubt, in some contexts, to social
needs.
It is sound enough to ascertain,
if that can be done, the objectives of
any particular measure, and
the background of the enactment; but to take
the opinion, whether
of a Minister or an official or a Committee, as to
the intended
meaning in particular applications of a clause or a phrase,
would
be a stunting of the law and not a healthy development.
In this light I can state in
summary form the considerations to which
the Report brings me in
interpreting the Act. First, the objective of the
Act is clear: it
was to secure the enforcement by other countries of
English
judgments, mainly money judgments, upon principles similar
to those on
which foreign judgments were recognised in England.
Secondly, the Act
was to be based upon and to follow with minimal
departures the common
law. Third, the Act was to state in
statutory form the general principles
upon which foreign judgments
(to which the Act applied) would be recog-
nised in English
courts. Fourth, the Act, a draft of which was annexed
to the
Report, and which the eventual statute adopted with
negligible
variation, was prepared in the contemplation that
bilateral Conventions
would be entered into with foreign States,
with a view to securing reciprocity
of treatment. It is made clear
that negotiations had taken place with the
Belgian, French and
German governments: draft Conventions had been
prepared and are
annexed to the Report: the Act was intended to operate
upon and in
aid of these Conventions.
[The Convention with Germany was
not, in fact, signed until 1960
and was given effect to by
Statutory Instrument 1961, No. 1199; but it
followed closely the
draft scheduled to the Report.]
17
Fifth, it is relevant to notice
that the Committee included a number
of persons of acknowledged
competence, and indeed distinction, in the
field of Private
International Law, who must be taken to be familiar with
established
rules and decided cases.
One of the rules, which they
must be taken to be aware of, relates to
the distinction
made in English Private International Law between matters
of
substance and matters of procedure, and, within that, the
classification of
limitation as a matter of procedure.
Classification of limitation as pro-
cedural means that in
proceedings in an English Court, English law, as the
lex fori,
will apply its domestic law as to limitation and will not
apply
foreign limitation provisions even if the foreign law is the
proper law,
unless, at least, they extinguish the right. This
principle has been part of
English law since, at any rate, Huber
v. Steiner. I quote the well-known
statement of
principle by Tindal CJ.:
" The distinction between
that part of the law of the foreign country
" where a
personal contract is made, which is adopted, and that which
"
is not adopted by our English courts of law, is well known and
"
established ; namely, that so much of the law as affects the rights
"
and merit of the contract, all that relates ad litis decisionem,
is adopted
" from the foreign country ; so much of the
law as affects the remedy
" only, all that relates ad
litis ordinationem, is taken from the lex fori
"
of that country where the action is brought." ((1835) 2 Bing
N.C. 202).
Huber v. Steiner was
not itself a case involving a foreign judgment, but the
question
arises immediately whether the same principle applies. The answer
to
this can only be affirmative. If English law applies its own
limitation
provisions to a foreign obligation, even where there is
evidence that action
on that obligation would (or would not) be
barred by the limitation provisions
of the proper law of that
obligation, it would seem inevitably to follow that
English law
should not recognise a foreign judgment to the same effect-
more
precisely should treat the foreign judgment as a decision as to
the
remedy procedurally available, or not available, in the
foreign court and
nothing more. Exactly that was in fact decided
in 1869 by Harris v. Quine
(L.R. 4 Q.B. 653).
Cockburn C.J. treated the matter as concluded by Huber
v.
Steiner:
" The law being as I have
stated, there is no judgment of the Manx
" court barring the
present action, as there was no plea going to the
" merits,
according to the view which we are bound to take of the Manx
"
statute of limitations, and the issue which the Manx court decided
in
" favour of the defendant is not the same issue as is
raised in the
" present action ".
Blackburn J.:
" But it was said the plea,
if amended according to the facts, would
" show that the Manx
court had determined the matter. . . . But ... all
" that the
Manx court decided was that, in the courts of the Isle of Man
"
the plaintiffs could not recover."
We see here, in the judgment of
Cockburn C.J., a reference to a plea
going " to the merits ".
This expression, whether related to pleas or to
judgments, is a
familiar one in English law: any practitioner would use it
even if
it is not always understood. It is used in many well
known
authorities—see Ricardo v. Garcias (1845) 12
Cl. & F. 368, 377, 389, 390;
Godard v. Gray (1870)
L.R. 6 Q.B., 150 and in writers of authority—see
Foote (5th
Ed.) p. 553 ; Dicey (3rd Ed.) p. 455 ; Story Commentaries,
section
576. See also American Law Institute (Restatement- Second)
Conflict of
Laws, section 110:
" A judgment that is not on
the merits will be recognised in other
" states only as to
issues actually decided."
All of what was said in Harris
v. Quine applies directly to the present case,
and
unless the Respondents can escape from the force of this authority,
must
conclude the appeal against them. They had, basically, two
arguments.
First they contended that Harris v. Quine was
wrongly decided, or at least
18
that it stood alone and ought
not to be followed. I regard this as a hopeless
contention. It may
be true that, as regards this subject matter, Harris v.
Quine
is the only English reported case where a foreign judgment
and
its recognition was involved. But as I have shown it
represents a logical
and inevitable consequence of Huber v.
Steiner and other cases and is merely
an application of a
principle too firmly established to be now put in
question. Harris
v. Quine has been cited often enough in English
and
Commonwealth cases. See Casanova v. Meier (1885)
1 T.L.R. 213 ; Carvell
v. Wallace (1873) 9 Nova
Scotia Reports 165 ; Bondholders Securities Corpor-
ation v.
Manville [1933] 4 D.L.R. 699 ; Pedersen v. Young (1964)
110 C.L.R.
162, sometimes, I must say, irrelevantly, but it has
never been doubted.
The principle is well recognised by Courts of
authority in the U.S.A. Warner
et al v. Buffalo Drydock
Co. (1933) 67 Fed.R. (2d.) 540; Cert. den. 291
U.S. 678 ;
Western Coal and Mining Coy. v. Jones (1946) 164 A.L.R.
685
(S.C. Cal.) and see the Restatement quoted above. As at the
year 1933,
then, Harris v. Quine was undoubtedly
good law.
Secondly, and more
substantially, the Appellants say that Harris v. Quine
is
superseded by section 8(1) of the Act of 1933: this was in effect the
view
of the Court of Appeal.
Before looking at the language
of the subsection, it may be useful to
consider what this
contention involves. It involves the proposition that a
well
established principle of English law, namely, that to obtain
recognition,
a foreign judgment must be on the merits and not be
based merely on a
" procedural " provision of the lex
fori, is swept away in favour of a new
principle that a
foreign judgment, on whatever grounds it proceeds, is
conclusive
for all purposes, so long at least as the same " cause of action
"
is involved, or the same facts. If one accepts that the
presumption is against
changes in the common law, and that this
presumption is fortified in the
present case by the Report of
1932, if one accepts moreover that the principle
under
consideration was perfectly well known and understood in 1932, it
was
to be expected that on this point the common law would only
be
changed by a clear and express provision. Yet what is relied
upon is the
word " conclusive " coupled with a reference
to " cause of action ". I
return to these words later:
What, one could ask, could be the purpose of
the change? Why
should this Act make a judgment conclusive as to some-
thing it
never decided? Why, to take the present case, should a
foreign
judgment be conclusive on a matter whose proper law is
English, and accepted
as English by the foreign Court, when that
foreign law itself does not destroy
the right, but only limits the
remedy it will grant? For English law to
abolish the distinction
between substance and procedure, or to classify
limitation as
substance, might be an intelligible objective, but short of this,
and
leaving the distinction and classification intact, to change the
effect of a
judgment is something that, at the least, requires
explanation.
Some suggestion was made that to
extend the recognition of foreign judg-
ments might be desired on
grounds of reciprocity: but I cannot understand
this. There was no
evidence that foreign Courts grant or would grant the
wider
recognition argued for by the Respondents and in any case
reciprocity
was to be achieved by the proposed Conventions. There
is nothing in this
alleged principle—one of uncertain
extent—which assists either way in the
interpretation of the
Act.
I find then, so far, no
intelligible reason for supposing the common law
to be changed. But the
Respondents say the words of the section are clear
clear words must be given effect
to—conclusive means conclusive and that
is that. This,
however, I cannot accept. In the first place one has to ask,
"
What is conclusive? ", the section says the "
judgment "—so what is " the
" judgment"?
The Respondents say that the judgment is the dispositive—
"
the suit is dismissed ". If this is contained in a
self-contained document, as
in the English practice, one may not
look beyond it. If in a comprehensive
document, as in the German
practice, only that part of it which states the
disposition is the
judgment, not the whole of the judgment showing what was
decided
or adjudicated upon. But there is no warrant for this limitation.
19
The Courts in this country, when
faced with a foreign judgment, whether
in favour of the plaintiff
or the defendant, in English proceedings, invariably
look at the
whole matter: the order made: the reasons: the nature of the
rival
claims, resorting if necessary to extrinsic evidence to explain them
and
to expose the reality. They do not confine themselves to the
fact of the
record, or to the formal order. It must be remembered
that at common law
foreign judgments do not give rise to an
estoppel by record. If relied on by
a plaintiff in an English
court, they are so as obligations, which the defendant
ought to
discharge: so the nature of the obligation must be made known
and
if necessary explained. If they are relied on by a defendant as a bar
in
English proceedings, the nature of the bar must be enquired
into, from an
inspection of the matter adjudicated upon. Harris
v. Quine itself is an
example of this. One can cite
many passages of authority:
" In general, in pleading a
foreign judgment you produce it with the
" proceedings to
show it is a judgment between the same parties and on
" the
same matters ". (Ricardo v. Garcias u.s. p. 387
per Lord Lyndhurst L.C.):
" Every plea of a foreign
judgment in bar ought to set forth so much
" at least of the
judgment as would show that it was final and conclusive
" on
the merits ". (ibid, per Bethell arg.)
" No one contends that the
judgment and proceedings should be set
" out in full, but we
should have such a description of them as would
" enable us
to know what was decided". (ibid p. 394 per Lord
Brougham).
So, in my opinion, to say that
in a case such as the present the English Court
must stop at the
first line of the German judgment and ignore the rest is
irrational
and out of line with what the Courts do. And then " conclusive
":
conclusive of or as to what? The Respondents say "
conclusive that the
" cause of action on which the foreign
proceedings were brought no longer
" exists ". But the
subsection does not say this: the words " in all proceed-
"
ings founded on the same cause of action " merely describes the
occasion
on which the conclusiveness arises. There is nothing
here-—and, I add in
passing, nothing in Part I of the Act—to
indicate that the conclusiveness is
to extend, irrespective of
what the judgment decided, to the whole of the
cause of action.
Why should we give to the judgment a greater force than
it
receives by the law of the country where it is given? Certainly the
law of
Germany does not say that the cause of action does not
exist.
In my opinion, therefore, an
interpretation of both "judgment" and
" conclusive
" which would require Courts in this country to examine
the
judgment, see what it decided, and hold it conclusive as a
judgment and for
what it adjudicates, is both open on the language
and is entirely consistent
with the common law. To quote another
leading authority : —
" As to whatever it meant
to decide, we must take it as conclusive ".
Bernardi v.
Motteux 1781 2 Doug. 575, 581 per Lord Mansfield.
The Appellant finally relied
strongly on the wording of section 8(3) of the
1933 Act. I agree
with my noble and learned friend Lord Simon of Glaisdale
in the
reasons he has given why this subsection is of no assistance and
shall
not repeat them in words of my own.
In my opinion, if this case had
arisen at any time between 1869 and 1933
there could be no doubt
how it would have been decided. I see no reason
why the Act of
1933 should be understood as intending to bring about a
different
result. The language of section 8(1) does not so compel. The
German
judgment would be conclusive for what it decided and for
nothing
more. The Plaintiffs' claim has not been decided on the
merits, and they
should be allowed to pursue it. This being my
conclusion on the second
point, it is not necessary to decide the
first. I prefer to reserve my opinion
upon whether subsection (1)
of section 8 applies to defendants' judgments.
There remains finally the
question of residual discretion, and I must say
that the situation
now existing is unfortunate. This House is called upon to
20
decide this matter before it
knows how the German proceedings will finally
terminate. It is not
in a position effectively or with knowledge to exercise
such
discretion as the Courts ought to exercise. In my opinion, if a
majority
of your Lordships disagree with the legal position taken
by the Court of
Appeal, the appeal should be allowed. But I
suggest that the present
proceedings should be stayed, with
liberty to apply after determination of
the final appeal in
Germany and that the matter then be brought afresh, if
the
Plaintiffs so desire, before the Master to decide whether they should
be
allowed to continue their action here. Obviously this House
cannot now
foresee all the contingencies. If the Respondents'
appeal in Germany is
allowed by the Federal Supreme Court and the
matter is restored to where
it was when this case was before the
Court of Appeal, then, if your Lordships
take a different view of
the law from the Court of Appeal, there would
appear to be—ceteris
paribus—a strong case for allowing the Plaintiffs
to
continue with their action here. If, on the other hand, the
Respondents'
appeal in Germany is dismissed—so that the
Plaintiffs in one way or another
can proceed in Germany—then
the conditions on which the Plaintiffs should
(if at all) be
allowed to sue the Defendants also in this country would
require
examination. I do not think that this House can at the
present stage offer
any useful guidance as to the manner in which
that could be decided.
Lord Diplock
MY LORDS,
If the effect of the
interpretation given by the majority of this House to
section 8(1)
of the Foreign Judgments (Reciprocal Enforcement) Act, 1933,
were
confined to the United Kingdom, I should content myself with
record-
ing my respectful dissent and my agreement with the
interpretation unani-
mously placed upon it by the Court of
Appeal. But the Act is designed to
facilitate the reciprocal
enforcement of the judgments of foreign courts in
the United
Kingdom and of the judgments of United Kingdom Courts in
foreign
states. It makes provision enabling and requiring English, Scots
and
Northern Irish courts to comply with obligations which the
United Kingdom
Government has assumed in international law towards
the governments
of those foreign states with which it has entered
into conventions " for the
" recognition and enforcement
of judgments in civil and commercial mat-
" ters ". So
the consequences of your Lordships' decision on this matter
will
not be confined to the municipal law of the United Kingdom. It
may
have repercussions in international law and in the municipal
law of those
foreign states with which conventions have been made.
This emboldens me
to state briefly why I am unable to accept
either of the constructions of
section 8(1) which commend
themselves to those of your Lordships who
consider that the
interpretation placed on it by the Court of Appeal was
wrong.
In a sentence the question that
divides us is:
" Did section 8 of the Act
of 1933 alter the common law as it had
" been stated by the
Court of Queen's Bench in 1869 in Harris v. Quine
"
(L.R. 4 Q.B. 653) "?
All three members of the Court
of Appeal thought that it did. They
reached this conclusion by
looking at the actual words of the section. They
considered that
the meaning of those words was plain and unambiguous.
For my part
I find their reasoning convincing. I would not seek to improve
upon
the way in which it is put in the judgment of Scarman L.J. I am
content to adopt it as my own.
I would, however, supplement it
with three brief comments.
First, I can see no warrant for
confining the application of the section
to judgments in favour of
a plaintiff or counterclaimant. Since it applies
only to "
proceedings founded on the same cause of action " as that
disposed
of by the foreign judgment, such proceedings ex
hypothesi must be brought
21
by a party who was the plaintiff
in the foreign action against a party who
was the defendant in
that action. The reference to reliance on the foreign
judgment "
by way of defence " in my view clearly indicates that the
section
does apply to foreign judgment in favour of defendants.
Secondly, if there had not been
the reported, albeit isolated, case of
Harris v. Quine
which had been mentioned without adverse comment in
the
standard text books on English private international law, I venture
to
think that it never would have occured to any English lawyer
that the
actual words of section 8(1) were to be understood as
drawing any
distinction between, on the one hand, foreign
judgments given in favour of
a defendant on the ground that the
plaintiff's cause of action was time-
barred under the domestic
law of the foreign court, and, on the other hand,
all other
foreign judgments given in favour of plaintiffs or defendants on
any
other ground. If it were possible to discern from its
provisions taken as a
whole that the Act was intended to apply
only to foreign judgments given
" on the merits "—a
phrase which I find elusive as a term of art, but which
I take it
would exclude judgments given upon the ground of non-compliance
with
a procedural rule of the foreign court or upon some other
ground
which would be classified in English private international
law as governed
by the lex fori—this might justify
construing the word " judgment" in the
same restricted
sense in section 8(1). But it is clear from section
4(l)(a)(iii)
that, provided the defendant has had due
notice of the proceedings, a
foreign judgment by default obtained
against him by the plaintiff is
enforceable under Part I of the
Act, notwithstanding that it has been given
upon what is solely a
procedural ground governed by the lex jori and is
not a
judgment which can be described as being " on the merits ".
So the
distinction sought to be drawn is peculiar to judgments in
favour of a
defendant on the ground that the plaintiff's cause of
action was time-barred
under the domestic law of the foreign
state, and must be derived as a
matter of construction from the
words of section 8 itself. For my part,
I am unable to discern any
suggestion of that distinction in those words.
Thirdly, the word "
conclusive " is, in my view, used in the section in the
same
meaning as in the phrase " final and conclusive as between the
parties
" thereto " which is used in section 1(2)(a)
as descriptive of foreign judgments
to which Part I of the Act
applies. This is incorporated by reference into
section 8(1)
itself. So I would answer the question "Conclusive of what? "
by
saying that it is conclusive of that of which the foreign judgment
is
conclusive in the country of the foreign court. Whatever else
the foreign
judgment does, its dispositive or operative part must
embody a decision of
the foreign court upon the ultimate question
whether the plaintiff is entitled
to the remedy he claimed that
the court ought to grant him against the
defendant as redress for
the facts that he relied upon as constituting his
cause of action.
So, in a subsequent action brought in an English court by
the same
plaintiff against the same defendant founded upon the same facts
and
claiming the same remedy the foreign judgment is at very
least
conclusive of the question whether or not the plaintiff is
entitled to that
remedy.
In the course of reaching its
ultimate decision disposing of the plaintiff's
claim to the remedy
he seeks, the foreign court may have incidentally
decided other
matters of fact or law essential to the plaintiffs claim to
be
entitled to the remedy or to the defendant's answer to that
claim. Whether
decisions of this kind will be embodied in the same
document which contains
the dispositive or operative part of the
foreign judgment will depend upon
the practice followed by the
foreign court ; and the collusiveness attaching
to such incidental
decisions in subsequent litigation in the country of the
foreign
court between the same parties but not founded on the same cause
of
action, will depend upon the extent to which the foreign system of
law
incorporates a principle similar to the English doctrine of
issue estoppel.
The English doctrine of issue estoppel, though it
did not acquire that name
until later, was well known in 1933. It
had been brought into prominence
in the recent case of Hoystead
v. Commissioner of Taxation ([1926] A. C.
22
155). It is based on public
policy and section 8(3) of the Act preserves it
as respects
foreign judgments, whether or not the system of law of the
foreign
country incorporates a similar principle.
Section 8(1), however, in
contrast to section 8(3), applies only to proceed-
ings founded on
the same cause of action as that for which the
plaintiff
claimed a remedy in the foreign action. If the judgment
in the foreign court
contains, as it must, the ultimate decision
of the foreign court disposing of
the plaintiff's claim to the
remedy he seeks, the conclusiveness of this decision
cannot, in my
view, be rendered inconclusive by any failure of the foreign
court
to reach decisions on incidental matters of fact or law which
it
considers unnecessary for the purpose of disposing of the
plaintiff's claim to
the remedy he sought—even though, if
the same remedy had been sought in
an action brought in England,
the English court would have considered it
necessary to decide
those incidental matters.
The attention of the Court of
Appeal had not been drawn to the Report
of the Foreign Judgments
(Reciprocal Enforcement) Committee which had
been presented to
Parliament in December, 1932. To that Report there was
annexed a
draft Bill of which the wording was almost identical with that of
the
Act which received the Royal Assent in April, 1933. Also annexed
was
a commentary and explanation of the draft Bill. It is apparent
from the
Committee's comments on Clause 8, which is reproduced
verbatim by section
8 of the Act, that they did not consider that
it made any alteration to the
common law. The membership of the
Committee included experts in private
international law who must
have been aware of the decision in Harris v.
Quine; I
would therefore accept the inference that the Committee did
not
realise that the language that they had recommended for Clause
8 would
have the result of altering the common law as to the
effect given by English
courts to judgments of foreign courts in
favour of defendants which were
based solely on the ground that
the plaintiff's remedy was time-barred under
the domestic law of
the foreign state. On the other hand it would, in my
view, be
quite unrealistic to suppose that the members of either House
of
Parliament who voted on the Bill gave any thought, either
individually or
collectively, to the decision in Harris v.
Quine or to the effect of Clause 8
upon it. The most that
can be inferred is that those who took the trouble
to read the
small print on page 64 of the fifth Annex to the Report were
not
aware that it would alter the existing common law in any way.
I do not, however, understand
that any of your Lordships go so far as to
suggest that a court is
entitled to put a strained construction on the words of
section 8
in order to give them the effect the Committee thought that they
had,
if this would involve departing from their plain and natural
meaning.
It is for the court and no-one else to decide what words
in a statute mean.
What the Committee thought they meant is, in
itself, irrelevant. Oral evidence
by members of the Committee as
to their opinion of what the section meant
would plainly be
inadmissible. It does not become admissible by being
reduced to
writing.
What is suggested is that
recourse may be had to the Report as an aid to
construction in
order to ascertain, first, what the existing law was understood
to
be upon the subject-matter of the Act; and, secondly, what was
the
mischief for which Parliament intended to provide a remedy by
the Act.
As regards the first of these
purposes for which recourse may be had to
the Report, the Act
deals with a technical subject-matter—the treatment to
be
accorded by courts in the United Kingdom to judgments of foreign
courts.
The expressions used in it are terms of legal art which
were in current use
in English and Scots law at the time the Act
was passed. In order to
understand their meaning the Court must
inform itself as to what the existing
law was upon this technical
subject-matter. In order to do this it may have
recourse to decide
cases, to legal text-books or other writings of
recognised
authorities, among whom would rank the members of the
Committee. Their
23
Report contains a summary of the
existing law, as they understood it. As
such it is part of the
material to which the court may have recourse for the
purpose of
ascertaining what was the existing law upon the subject-matter of
the
Act. There is, however, no real doubt as to what it was.
As regards recourse to the
Report for the purpose of ascertaining the
mischief for which
Parliament intended to provide a remedy by the Act,
this is based
upon the so-called " mischief" rule which finds its
origin
in Heydon's Case (3 Co Rep 7a) decided under the
Tudor Monarchy in
1584. The rule was propounded by the judges in
an age when statutes
were drafted in a form very different from
that which they assume today.
Those who composed the Parliaments
of those days were chary of creating
exceptions to the common law
; and, when they did so, thought it necessary
to incorporate in
the statute the reasons which justified the changes in the
common
law that the statute made. Statutes in the sixteenth century
and
for long hereafter in addition to the enacting words contained
lengthy
preambles reciting the particular mischief or defect in
the common law
that the enacting words were designed to remedy.
So, when it was laid
down, the " mischief" rule did not
require the court to travel beyond
the actual words of the statute
itself to identify " the mischief and defect
" for which
the common law did not provide ", for this would have
been
stated in the preamble. It was a rule of construction of the
actual words
appearing in the statute and nothing else. In
construing modern statutes
which contain no preambles to serve as
aids to the construction of enacting
words the "mischief"
rule must be used with caution to justify any
reference to
extraneous documents for this purpose. If the enacting words
are
plain and unambiguous in themselves there is no need to have
recourse
to any " mischief" rule. To speak of mischief
and of remedy is to
describe the obverse and the reverse of a
single coin. The former is that
part of the existing law that is
changed by the plain words of the Act;
the latter is the change
that these words made in it.
The acceptance of the rule of
law as a constitutional principle requires
that a citizen, before
committing himself to any course of action, should
he able to know
in advance what are the legal consequences that will flow
from it.
Where those consequences are regulated by a statute the source
of
that knowledge is what the statute says. In construing it the
court
must give effect to what the words of the statute would be
reasonably
understood to mean by those who conduct it regulates.
That any or
all of the individual members of the two Houses of the
Parliament that
passed it may have thought the words bore a
different meaning cannot
affect the matter. Parliament, under our
constitution, is sovereign only
in respect of what it expresses by
the words used in the legislation it has
passed.
This is not to say that where
those words are not clear and unambiguous
in themselves but are
fairly susceptible of more than one meaning, the court,
for the
purpose of resolving—though not of inventing—an
ambiguity, may
not pay regard to authoritative statements that
were matters of public
knowledge at the time the Act was passed,
as to what were regarded as
deficiencies in that branch of the
existing law with which the Act deals.
Where such statements are
made in official reports commissioned by govern-
ment, laid before
Parliament and published, they clearly fall within this
category
and may be used to resolve the ambiguity in favour of a meaning
which
will result in correcting those deficiencies in preference to
some
alternative meaning that will leave the deficiencies
uncorrected. The justifi-
cation of this use of such reports as an
aid to the construction of the words
used in the statute is that
knowledge of their contents may be taken to
be shared by those
whose conduct the statute regulates and would influence
their
understanding of the meaning of ambiguous enacting words.
My Lords, I do not think that
the actual words of section 8 of the
Act of 1933 are fairly
susceptible of any other meaning than that ascribed
to them by the
Court of Appeal. So I see no need to look at the Report
24 .
of the Committee; but much of
the argument in this House has been
devoted to a meticulous verbal
analysis of everything that the Committee
said in it. For my part
this recourse to the Report for the purpose of
ascertaining what
was the " mischief" for which Parliament intended
to
provide a remedy by the Act has only served to confirm
me in the view
that section 8 should be construed as the Court of
Appeal construed it.
The mischief was said by the
authors of the Report to be that foreign
courts did not, in
effect, recognise judgments of English courts as conclusive.
The
reason for this was the difficulty in convincing foreign courts
that
reciprocal treatment was accorded to their own judgments in
the United
Kingdom. The causes of the difficulty were said to be:
(1) the lack of
any provision in the English legal system for the
direct enforcement of
foreign judgments for sums of money by
execution rather than by action ;
and (2) the dependence of the
English recognition of foreign judgments
upon unwritten rules of
common law which foreign courts suspected of
being indefinite and
discretionary as compared with written law embodied
in a code or
statute.
These were the reasons why, in
the Committee's view, the only manner
of securing reciprocal
treatment by foreign countries in the matter of the
recognition
and enforcement of British judgments was by:
" the conclusion of an
international convention containing reciprocal
" obligations
for the recognition and enforcement of judgments which
" will
be made binding as part of the municipal law of the foreign
"
country together with the statement of our own rules in
statutory
" form ".
The conclusion that I would draw
from this is that in the Committee's
view the Act would fail in
its purpose of inducing foreign states to enter
into such
conventions unless, as well as amending the existing law by
providing
a method of obtaining direct execution of foreign judgments for
money
sums, it also embodied a comprehensive written statement of at
least
the minimum effect which courts in the United Kingdom were
required to
give to judgments of courts of foreign states with
which reciprocal conven-
tions had been concluded—such
written statement to be in substitution for
the written rules of
the common law and to obviate the necessity of resorting
to an
examination of previous judicial decisions on this topic. That,
after
all, is what the lawyers of the three countries with whom
informal negotia-
tions had already been conducted France, Germany
and Belgium, understand
as being the purpose of a code. Yet the
construction which commends itself
to the majority of your
Lordships can only be arrived at by going beyond
the actual
wording of the Act and resorting to an examination of
previous
judicial decisions and specifically the decision in
Harris v. Quine. To do this
is to perpetuate one of the
very mischiefs which, according to the Committee,
it was the
purpose of the proposed Bill to remedy.
Annexed to the Report were draft
Treaties with France, Germany and
Belgium providing for the
reciprocal enforcement and recognition of judg-
ments of superior
courts of the High Contracting Parties. Article 3 in each
of these
Treaties, like section 8 of the draft Bill, dealt with the
recognition
of judgments, as distinct from their direct
enforcement by execution. The
final paragraph of that Article
stated what was meant by the " recognition "
of a
judgment which the High Contracting Parties mutually undertook
to
grant to judgments of one another's superior courts. It was to
the obligation
to be assumed by the United Kingdom Government
under this Article that
section 8(1) of the Act was intended to
give statutory effect.
The paragraph was in the
following terms:
"The recognition of a
judgment under paragraph (1) of this article
" means that
such judgment shall be treated as conclusive as to the
"
matter thereby adjudicated upon in any further action between the
"
parties (judgment creditor and judgment debtor) and as to such
"
matter shall constitute a defence in a further action between them
in
" respect of the same cause of action."
25
There are differences of
phraseology between this provision of the Treaties
and section
8(1) of the Act. What is significant for my present purpose is
that
the Treaty says that the judgment shall be treated as conclusive "
as to
" the matter thereby adjudicated upon "
whereas the words I have italicised
are omitted from section 8(1).
These additional words may be ambiguous
in themselves, but the
Committee (some of whose members are said to have
negotiated the
draft Treaties with representatives of the foreign
governments
concerned) explained in a footnote to paragraph 4 in
the body of the Report
what they meant by this phrase:
" The words ' question
adjudicated upon ' refer to the actual decision
" (the
operative parts of the judgment) as opposed to the grounds or
"
reasoning upon which it may be based, in the course of which other
"
points of law or fact may have been incidentally decided as pre-
"
liminaries (necessary or otherwise) to the final conclusion."
While this on the one hand would
appear to limit the " matter adjudicated
" upon "
to the decision of the ultimate question dealt with by the
dispositive
or operative part of the judgment, viz. whether or not
the plaintiff was
entitled (o the remedy that he claimed that the
court ought to grant him
against the defendant as redress for the
facts that he relied upon as constitut-
ing his cause of action ;
it would, on the other hand, bind the United King-
dom government
to treat the decision of that ultimate question as
conclusive
whatever might be the grounds or reasoning on which it
was based.
In construing a Treaty recourse
may be had, in public international law,
to the travaux
preparatoires for the purpose of resolving any ambiguity
in
the Treaty ; and it would appear from the history of the
negotiations con-
tained in the body of the Report that the Report
itself might be regarded
as forming part of the travaux
preparatoires. If this were so, recourse to
The Report would
in my view clearly lead to the conclusion that the High
Contracting
Parties in using the phrase " matter adjudicated upon "
had
undertaken to treat as conclusive the dispositive or operative
part of the
judgment.
Where an Act of Parliament is
passed to enable or to require United
Kingdom courts to give
effect to international obligations assumed by Her
Majesty's
Government under a Treaty, it is a well established rule of
con-
struction that any ambiguity in the words of the Act should
be resolved in
favour of ascribing to them a meaning which would
result in the performance
of those international obligations—not
in their breach. For this additional
reason recourse to the Report
serves to confirm me in the view that section 8
should be
construed as the Court of Appeal construed it.
Lord Simon of Glaisdale
MY LORDS,
Black Clawson, an English
company, became holders in due course of
two bills of exchange
accepted by the predecessor in title of Papierwerke
but
dishonoured by Papierwerke. The bills were drawn, negotiated
and
payable in England. Black Clawson became their holders only
shortly
before action on them in England would have become
time-barred by
effluxion of six years from their acceptance.
Papierwerke is a German
company without any assets in England, its
principal assets being in
Germany ; and, by the German law of
limitation of actions, the time for
suing on a bill of exchange is
three years. Although it is a slight over-
simplifiaction, for the
purpose of this appeal it can be stated that,
according to the
expert evidence, in German law effluxion of the period of
limitation
bars the remedy (as in England) without extinguishing the right
(as
it does in Scotland). Whether a German court should, in an action
on
the bills, apply the English limitation period of six years or
the German
limitation period of three years depends on the
appropriate choice-of-law
rule in German private international
law: this is a question to which
different answers have been
returned at first instance by the District Court
26
in Munich and on appeal by the
Bavarian Court of Appeal, and which
now awaits decision by the
German Federal Supreme Court. In view of
the doubt whether an
action on the bills in Germany would be held to be
time-barred,
Black Clawson, though starting such an action, tried to preserve
a
fall-back position in England. Before the effluxion of six years from
the
date of acceptance they applied ex parte in England
for, and obtained, leave
to issue a writ against Papierwerke and
to serve it on them in Germany.
Since Black Clawson's German
action was proceeding, they gave no notice
to Papierwerke of the
issue of the English writ. On the 30th November,
1972, the Munich
District Court dismissed Black Clawson's claim on the
bills. The
Court held that, under German private international law, the
relevant
limitation period was the German one of three years, not the
English
of six years, with the result that Black Clawson's claim was
time-
barred. The judgment handed down was in three parts. The
first (headed
" Final Judgment") has in argument
conveniently been called " the
dispositive part". This
stated in translation:
" I. The suit is dismissed.
" II. The Plaintiff shall
bear the costs of the dispute.
" III. The judgment is
provisionally enforceable."
' [Then followed provisions
permitting the Plaintiff to avert compul-
' sory execution by
providing security]'.
The second part of the judgment
handed down (headed "Facts") was a
statement of the
facts of the case and the issues. The third part of the
judgment
handed down (headed " Grounds for the Decision ") made it
clear
that the action was dismissed-on the ground that it was
time-barred under
what was held to be the relevant German
choice-of-law rule.
Though Black Clawson appealed
against this judgment to the Bavarian
Court of Appeal, they now
gave notice to Papierwerke of the issue of the
English writ.
Papierwerke countered by a summons to set aside the English
writ
and all proceedings in pursuance thereof. The Master
dismissed
Papierwerke's summons to set the writ aside. Papierwerke
appealed to
Talbot J., who, on the authority of Harris v.
Quine (1869) L.R. 4 Q.B.D.
653, in the knowledge of the
pending appeal to the Bavarian Court of
Appeal, and in the
exercise of his discretion, dismissed Papierwerke's appeal.
In Harris v. Quine the
plaintiffs were attorneys in the Isle of Man and
were retained by
the defendant to conduct a suit in the courts of the Isle
of Man.
The plaintiffs subsequently sued for their fees in the Isle of Man
;
but the Manx court held that their claim was time-barred by the
Manx
statute of limitations, under which the relevant period was
three years.
The plaintiffs then used in England within the
six-year English limitation
period. It was held by a powerful
court that, as the Manx statute barred
the remedy only and did not
extinguish the debt, the judgment of the Manx
court was no bar to
the English proceedings. Cockburn CJ. said (p. 657):
" . . . . there is no
judgment of the Manx court barring the present
" action as
there was no plea going to the merits . . . and the issue
"
the Manx court decided in favour of the defendant is not the same
"
issue as is raised in the present action ".
Blackburn J. said (p. 658) :
"... all that the Manx
court decided was, that in the courts of the
"Isle of Man the
plaintiffs could not recover. If the plaintiffs could
" have
shown, as was attempted in Huber v. Steiner [2]Bing.
N.C. 202]
" that the law of the Isle of Man extinguished the
right as well as the
" remedy, and this had been the issue
determined by the Manx court,
" that would have been a
different matter ".
Lush
J. (p. 658) said:
" Had the Manx statute of
limitations . . . extinguished the right
" after the limited
time and not merely barred the remedy, there would
" have
been good ground for defence in this court. But the Manx law
27
" is like our statute of
limitations, and bars the remedy only; and all
" that was
decided in the Manx court was, that the action could not be
"
maintained there ".
Hayes J. concurred. The decision
has been cited in successive editions of
Dicey's The Conflict
of Laws as authority for the words " on the merits
"
italicised by me in the proposition that:
" A foreign judgment in
personam ... is a good defence to an action
" in England
for the same matter when either—
" (1) the judgment was in
favour of the defendant and was final
" and conclusive on
the merits: or . . .".
(Dicey and Morris, The
Conflict of Laws, 9th ed. 1973, Rule 194, p. 1058 ;
cf. 1st
ed. 1896, Rule 100, p. 422). Such was the decision which Talbot
J.
followed and the rule which he applied. He held that the
decision of the
Munich District Court was not final and conclusive
" on the merits "; it
merely decided, like the judgment
of die Isle of Man Court in Harris v.
Quine, that
the plaintiff's remedy was time-barred in the foreign court.
Papierwerke appealed to the
English Court of Appeal. In addition to
argument on the proper
exercise of the discretion to allow the English writ
to stand,
which they had urged before the Master and Talbot J., Papierwerke
put
forward a new point to the Court of Appeal. This was based on
section
8(1) of the Foreign Judgments (Reciprocal Enforcement) Act
1933. It was
argued on behalf of Papierwerke that this subsection
had abrogated the
decision in Harris v. Quine. The
Court of Appeal ([1974] 2 W.L.R. 789)
allowed the appeal. So far
as discretion was concerned Lord Denning M.R.
(p. 796A-B) doubted
whether it would be a case for leave to serve a writ out
of the
jurisdiction. Megaw L.J. said (p. 796C):
" On the arguments
presented before Master Bickford-Smith and
' Talbot J., their
decisions were in my opinion right, including their
"
exercise of the discretion under R.S.C. Ord. 11, r. 1."
Scarman L.J. said (p. 801 F):
" If the judge was correct
in law in holding that the German judgment
" was not ' res
judicata ', I do not think that his exercise of discretion
"
can be successfully challenged in this court."
But the Court of Appeal was
unanimous in holding that section 8(1) of the
Act of 1933 had
modified the rule in Harris v. Quine, and had rendered
the
judgment of the Munich District Court conclusive against any
cause of action
on the bills by Black Clawson in this country.
Shortly after the English Court
of Appeal had given judgment, the
Bavarian Court of Appeal gave
their judgment. They allowed Black
Clawson's appeal, holding that
the limitation period according to German
private international
law was the English period of six years not the German
period of
three years. The judgment of the Bavarian Court of Appeal is
under
appeal to the German Federal Supreme Court. Black Clawson
have
appealed to your Lordships against the judgment of the
English Court of
Appeal, in order to safeguard themselves in case
the Federal Supreme Court
reinstates the judgment of the Munich
District Court.
The appeal to your Lordships
raises two main issues: first, what is the
proper interpretation
to be given to section 8(1) of the 1933 Act, in particular
in
relation to Harris v. Quine ; and, secondly, how far
the discretion exercised
by Talbot J. can be reviewed in an
appellate tribunal.
I confess, my Lords, that when I
first read section 8 of the 1933 Act I
was under an immediate and
powerful impression that the Court of Appeal
must be right. It
seemed obvious that subsection (1) was dealing with cause-
of-action
estoppel and subsection (3) with issue estoppel. If so, the
judgment
of the Munich District Court did not merely determine an
issue between the
parties relating to the operation of the German
law of limitation of action ;
it dismissed Black Clawson's action
founded on the bills ; and such judgment
would have to be
recognised in any court in the United Kingdom as conclu-
sive in
all proceedings founded on the same cause of action, i.e.,
liability
arising from acceptance of the bills.
28
But though the foregoing was my
first and strong impression, I soon
realised that I was looking at
section 8 with 1975 eyes and interpreting it in
1974 terms; and
that in so doing I was falling into fundamental error.
Contemporanea
expositio est fortissimo in lege. The concepts of
cause-of-
action and issue estoppel were not developed by 1933
(there is, for example,
no reflection of the distinction in the
notes to The Duchess of Kingston's
Case (1776) 20 Howell
St. Tr. 537 in the authoritatively edited 1929 edition
of Smith's
Leading Cases), and could not possibly be what Parliament and
the
draftsman then had in mind. My initial response had been scarcely
less
anachronistic than if I had attempted to interpret Magna
Carta by reference
to Rookes v. Barnard [1964] AC 1129.
The matter was, in my judgment
put beyond doubt when your Lordships
looked, de bene esse, at
the Report of the Greer Committee on Reciprocal
Enforcement of
Foreign Judgments (Cmnd. 4213 of 1932). This was the
Report of a
committee of lawyers (practising, official and academic) of
high
distinction and of great expertise in private international
law. Its terms of
reference were:
" To consider (1) what
provisions should be included in conventions
" made with
foreign countries for the mutual enforcement of judgments
"
on a basis of reciprocity, and (2) what legislation is necessary or
"
desirable for the purpose of enabling such conventions to be made
"
and to become effective, or for the purpose of securing reciprocal
"
treatment from foreign countries."
The Report discussed the
prevailing law and the various problems which
stood in the way of
reciprocal enforcement of judgments. It annexed
Conventions which
had been officially negotiated in draft with three foreign
countries
(Belgium, France and Germany), and which could be carried
into
effect if appropriate legislation was enacted in this country. It
drafted
and annexed (Annex 1) a suitable Draft Bill, clause 8 of
which corresponds
exactly with section 8 of the 1933 Act. Annex V
contains a commentary
on the Draft Bill. Paragraph 13 of Annex V
(p. 64) reads :
" Clause 8 contains the
provisions of the Bill with regard to the
" recognition of
foreign judgments as final and conclusive between the
"
parties as regards the question therein adjudicated upon. It is
entirely
" in accordance with the position at Common
Law (as explained in
" paragraph 4 of the Report), and
Clause 8(3) saves the existing Common
" Law rules in any
cases where the rule laid down by the Act may
" be narrower
in operation than the Common Law." (My italics.)
Annex IV(b) was a draft
Convention with Germany. Article 3 dealt with
reciprocal
recognition of judgments. Paragraph 2 (p. 46) reads:
" The recognition of a
judgment under paragraph (1) of this article
" means that
such judgment shall be treated as conclusive as to the
"
matter thereby adjudicated upon in any further action
between
" the parties (judgment creditor and judgment debtor)
and as to such
" matter shall constitute a defence in a
further action between them
" in respect of the same cause of
action." (My italics.)
There was similar provision in
the draft Conventions with France (p. 54)
and Belgium (p. 38).
If this material and that cited
by my noble and learned friends is available
to a court of
construction, it is plain beyond doubt (if there could have
been
any doubt) that Parliament (in so far as it legislated in the
light
of the Report) did not have in legislative contemplation the
modern concepts
of issue and cause-of-action estoppel; it also
shows that Parliament did
not mean to abrogate the rule in Harris
v. Quine. The Court of Appeal
apparently was not asked
to look at the Report. The first questions which
arise in this
appeal are therefore whether your Lordships, as a court of
statutory
construction, are entitled to examine the Greer Report, and, if
so,
for what purpose or purposes: the answers to these questions should
29
indicate how much of the
material which has been cited from it by my
noble and learned
friends and myself is available as an aid to construction.
This
raises some fundamental issues relating to statutory construction.
Courts of construction interpret
statutes with a view to ascertaining the
intention of Parliament
expressed therein. But, as in interpretation of all
written
material, what is to be ascertained is the meaning of what
Parliament
has said and not what Parliament meant to say. This is
not a self-evident
juristic truth. It could be urged that in a
parliamentary democracy, where
the purpose of the legislature is
to permit its electorate to influence the
decisions which affect
themselves, what should be given effect to is what
Parliament
meant to say; since it is to be presumed that it is this that
truly
reflects the desired influence of the citizens on the
decision-making
which affects them. To this, however, there are
three answers. First, in
interpretation of all written material,
the law in this country has set great
pragmatic store on limiting
the material available for forensic scrutiny:
society generally
thereby enjoys the advantages of economy in forensic
manpower and
time. By concentrating on the meaning of what has been
said, to
the exclusion of what was meant to be said, the material for
scrutiny
is greatly reduced. Specifically, experience in the United States
has
tended to show that scrutiny of the legislative proceedings is apt
to
be a disappointingly misleading and wasteful guide to the
legislative intention.
Secondly, interpretation cannot be
concerned wholly with what the promul-
gator of a written
instrument meant by it: interpretation must also be
frequently
concerned with the reasonable expectation of those who may
be
affected thereby. This is most clearly to be seen in the
interpretation
of a contract: it has long been accepted that the
concern of the court is,
not so much with the subject-matter of
consent between the parties (which
may, indeed, exceptionally, be
entirely absent), as with the reasonable
expectation of the
promisee. So, too, in statutory construction, the court
is not
solely concerned with what the citizens, through their
parliamentary
representatives, meant to say; it is also concerned
with the reasonable
expectation of those citizens who are affected
by the statute, and whose
understanding of the meaning of what was
said is therefore relevant. The
sovereignty of parliament runs in
tandem with the rule of objective law.
Thirdly, if the draftsman
uses the tools of his trade correctly, the meaning
of his words
should actually represent what their promulgator meant to say.
And
the court of construction, retracing the same path in the
opposite
direction, should arrive, via the meaning of what was
said, at what the
promulgator meant to say.
There are, however, two riders
to be noted in relation to this last con-
sideration. First,
draftsmen's offices, government departments, houses of
parliament
and courts of justice are all manned by fallible human beings ;
with
the result that the court's exposition of the meaning of what
Parliament
has said is inherently liable to differ from what
Parliament meant to say.
The object of the parliamentary and
forensic techniques should be to mini-
mise such liability to
error; so that artificial rules which stand unnecessarily
in the
way (i.e., which cannot be used as a code of communication) should
be
eliminated. Secondly, most words in the English language have a
number
of shades of meaning. Even the bright isolating rays of the
draftsman's
technical skills—his juxtapositions and
differentiations—are rarely sufficient
in themselves to pick
out without any possibility of mistake by a court of
construction
the exact shade of meaning intended, to the exclusion of a
penumbra
of other possible meanings. The draftsman therefore needs the
full
co-operation of the court of construction: it must be tuned in on
the
same wavelength. In order to understand the meaning of the
words which
(he draftsman has used to convey what Parliament meant
to say, the court
must so far retrace the path of the draftsman as
actually to put itself in his
position and that of Parliament. The
expositio must be both contemporanea
and eodem
loco. All this is merely the counterpart of what my noble
and
learned friend, Lord Wilberforce, said in Prenn v.
Simmonds [1971] 1 W.L.R.
1381 at pp. 1383H-1384A, in
relation to the interpretation of another class
of written
material:
30
" The time has long passed
when agreements, even those under seal,
" were isolated from
the matrix of facts in which they were set, and
" interpreted
purely on internal linguistic considerations ".
I can see no reason why a court
of construction of a statute should limit
itself in ascertaining
the matrix of facts more than a court of construction
of any other
written material. A public Report to Parliament is an important
part
of the matrix of a statute founded on it. Where Parliament is
legis-
lating in the light of a public Report I can see no reason
why a court of
construction should deny itself any part of that
light and insist on groping
for a meaning in darkness or
half-light. I conclude therefore that such a
Report should be
available to the court of construction, so that the latter
can put
itself in the shoes of the draftsman and place itself on the
parliamen-
tary benches—in much the same way as a court of
construction puts itself
(as the saying goes) in the armchair of a
testator. The object is the same
in each case—namely, to
ascertain the meaning of the words used, that
meaning only being
ascertainable if the court is in possession of the know-
ledge
possessed by the promulgator of the instrument.
Halsbury's Laws of England,
3rd ed., vol. 36, p. 411, states:
" Reference may not be made
for the purpose of ascertaining the
" meaning of a statute to
the recommendations contained in the report
" of a Royal
Commission or of a departmental committee or in a White
"
Paper which shortly preceded the statute under consideration
because
" it does not follow that such recommendations were
accepted by the
" legislature. On the other hand, reports of
commissions preceding the
" enactment of a statute may be
considered as showing the facts which
" must be assumed to
have been within the contemplation of the legis-
" lature
when the statute was passed."
As regards the first sentence of
this passage, I find unconvincing the reason
given for
non-reference; I should have thought that, in general, recourse
to
the statute itself will make it immediately apparent whether or
not the recom-
mendation has been accepted by the legislature. I
would wish to leave open
for consideration in a later case where
the point is crucial whether this
statement is correct.
As regards the second sentence,
the critical questions in the instant case
are whether such a
Report (here the Greer Report) may be looked at in
order to
ascertain, first, what was the " mischief " which the
provision falling
for construction was designed to remedy,
secondly, what was believed by
Parliament to be the pre-existing
law, and, thirdly, where a draft Bill is
annexed to the Report in
the same terms as the statute falling for construc-
tion, the
opinion expressed by the committee as to the effect of its
provisions.
The first question is, then,
whether the Greer Report can be looked at in
order to ascertain
what was the " mischief " which Parliament was seeking
to
remedy. " Mischief" is an old, technical expression; but it
reflects a
firmly established and salutory rule of statutory
construction. It is rare
indeed that a statute can be properly
interpreted without knowing what
was the legislative objective. It
would be trespassing on your Lordships'
patience were I to repeat
what, in collaboration with my noble and learned
friend, Lord
Diplock, I said about this matter in Maunsell v. Olins
[19741]
3 W.L.R. 835, 847-849. At the very least, ascertainment
of the statutory
objective can immediately eliminate many of the
possible meanings that the
language of the Act might bear; and, if
an ambiguity still remains, con-
sideration of the statutory
objective is one of the means of resolving it.
The statutory objective is
primarily to be collected from the provisions
of the statute
itself. In these days, when the long title can be amended in
both
Houses, I can see no reason for having recourse to it only in case
of
an ambiguity—it is the plainest of all the guides to the
general objectives
of a statute. But it will not always help as to
particular provisions. As to
the statutory objective of these, a
Report leading to the Act is likely to be
31
the most potent aid; and, in my
judgment, it would be mere obscurantism
not to avail oneself of
it. There is, indeed, clear and high authority that it
is
available for this purpose.
In River Wear Commissioners
v. Adamson (1877) 2 App. Cas. 743, 763,
Lord Blackburn
said:
" In all cases the object
is to see what is the intention expressed by
" the words
used. But, from the imperfection of language, it is
"
impossible to know what that intention is without inquiring
further,
" and seeing what the circumstances were with
reference to which the
" words were used, and what was the
object, appearing from those
" circumstances, which the
person using them had in view ".
In Eastman Photographic
Materials Company Ltd. v. Comptroller-General
of Patents,
Designs & Trade Marks [1898] AC 571 the Earl of Halsbury
L.C.
cited this passage from Lord Blackburn's speech specifically
as authority
for looking at the Report of a commission in the
light of which Parliament
had enacted the statute which fell for
construction in the Eastman case. At
p. 573 Lord Halsbury
said:
"... I think it desirable
... to say something as to what sources
" of construction we
are entitled to appeal to in order to construe a
" statute.
Among the things which have passed into canons of construc-
"
tion recorded in Heydon's Case [(1584) 3 Rep. 7a], we are to
see
" what was the law before the Act was passed, and what
was the
" mischief or defect for which the law had not
provided, what remedy
" Parliament appointed, and the reason
of the remedy."
Lord Halsbury then (p. 574)
cited at length from the Report of the commission
dealing with the
law pre-existing the Act which fell for construction and with
its
defects ; and added (p. 575):
" I think no more accurate
source of information as to what was the
" evil or defect
which the Act of Parliament now under construction
" was
intended to remedy could be imagined than the report of that
"
commission."
Lord Halsbury also cited Turner
L.J. in Hawkins v. Gathercole (1855)
6 De G. M. &
G. 1, 21 as further authority. I am therefore of opinion
that the
Greer Report is available to your Lordships in construing the
1933
Act, by way of helping to show what facts were within the
knowledge of
Parliament and what was the defect in the
pre-existing law which called
for parliamentary remedy.
Ascertainment of a defect in the
law presupposes ascertainment of the
law which contains the
defect. But, for purposes of statutory construction,
is it the
pre-existing Jaw, as correctly determined, which is relevant, or
what
that law was understood to be?
There may be a communis error
as to the law. This is a source of law
until it is corrected
(see Broom's Legal Maxims, 10th ed. 1939, p. 86).
Indeed, a
legal error may well be held to be too inveterate for
correction
(see, e.g., Ross Smith v. Ross Smith [1963]
A.C. 280). Once it is accepted
that the purpose of ascertainment
of the antecedent defect in the law is to
interpret Parliament's
intention, it must follow that it is Parliament's under-
standing
of that law as evincing such a defect which is relevant, not what
the
law is subsequently declared to be. On reflection, I do not think
that
my hesitation on this point in Povey v. Povey
[1972] Fam. 40, 52C was
justified. See also Barras v.
Aberdeen Steam Trawling & Fishing Co. [19331]
A.C. 402.
There is another canon of
construction, which I shall have to cite later
in greater detail,
to which, for the same foregoing reasons, it is
Parliament's
understanding of the law which is relevant, rather
than the law in an
abstract juridical correctitude. This is the
canon whereby the courts will
presume that Parliament would use
clear words if the intention were to
abrogate a long-standing rule
of law: though, no doubt, courts of construction
32
will be readier to apply this
presumption if satisfied that the rule in question
is juridically
well founded and if its framers carry weight in the law;
whereas,
on the other hand, the presumption will be weaker if the rule
has
been authoritatively questioned.
My Lords, I have spoken of "
Parliament's " understanding of the law.
Of course, a
settlor, a testator, the parties to a contract, or individual
members
of Parliament, may not know the relevant law. It is the draftsmen
of
the instrument in question who knows the law (or is presumed to do
so);
and his knowledge, so far as forensic interpretation is
concerned, is
irrebuttably imputed to the person for whom he is
drafting. The draftsman
knows the legal effect that the person for
whom he is drafting wants to
bring about; and he will draft
accordingly, against his understanding of
the prevailing law, and
using as a code of communication to the courts of
construction
various canons of construction. Few testators will have heard
of
the rule in Gundry v. Pinniger (1851) 14 Beav. 94;
(1852) 1 DeG.M. & G.
502. But few draftsmen of wills will be
ignorant of the rule; so that when
the words " next of kin "
appear in a will there is a strong though rebuttable
presumption
that the draftsman used them to denote those who would be
the
testator's next of kin on his death, and an irrebuttable
presumption that
the draftsman so used them in order to produce
the legal effect desired
by the testator. Similarly, many M.P.s do
not know the legal rule that when
the word " child " is
used in a legal instrument, it is presumptively taken to
mean a
legitimate child; but the draftsman of the statute does know
this;
and a court of construction will conclude that his usage was
to carry into
legal effect what Parliament desired. So again, few
M.P.s in 1933 will
have known of the rule in Harris v.
Quine; but few, if any, members of
the Greer Committee,
which drafted Clause 8 of the Draft Bill, will have
been ignorant
of it. I have pointed out that this rule had been cited in
successive
editions of Dicey without question. It had been followed in
the
Commonwealth and in the United States. No one had suggested that
it
was wrongly decided. It made good sense: any other rule would
make
the foreign judgment conclusive as to more than it actually
decided. The
legal knowledge of the Greer Committee as draftsmen
of the 1933 Act must
be ascribed to Parliament in its enactment.
Quite apart from the
irrebuttable ascription to Parliament of a
draftsman's knowledge
of the law in relation to which Parliament is
legislating, in my
view a Report like that of the Greer Committee can
also be looked
at independently like any other work of legal authority in
order
to ascertain what was conceived to be the prevailing state of the
law.
The most difficult question in
this appeal, to my mind, arises out of the
modern practice of
annexation to a Report to Parliament of a draft Bill
with a
commentary on it. Is such a commentary available to a
court
construing the ensuing statute?
My Lords, before turning to this
question, may I venture to summarise
what aids to construction
your Lordships obtain from the Greer Report
irrespective of its
commentary on the draft Bill?:—(1) Harris v.
Quine,
although not cited by name, was part of the
antecedent common law;
(2) negatively, the rule in Harris v.
Quine was not regarded as a defect
requiring remedy; (3)
positively, the Conventions negotiated in draft, and
for which the
staute was required for legal implementation, reflected, and
thereby
endorsed, the rule in Harris v. Quine ; (4) a provision
such as the
subsequent section 8(1) of the 1933 Act might well be
restrictive of the
common law; if therefore such a provision were
enacted as part of the
codification of the common law it would
require a saving clause (such as
the subsequent section 8(3)):
although this was specifically stated in the
commentary, it
sufficiently appears from the body of the Report.
The foregoing, however, although
going far to showing that section 8(1)
was not meant to abrogate
the rule in Harris v. Quine, is not
absolutely
conclusive when it comes to interpretation. It
unfortunately happens, occa-
sionally, that a statutory provision
has an unlooked-for effect. Such a
33
situation is sometimes described
in the phrase, " Whatever Parliament was
" aiming at, it
hit such-and-such a target fair and square ". If the words
of
section 8 can only be read as abrogating the rule in Harris
v. Quine, why
then, it must be so, however little that was the
legislative objective. After
all, the first and most elementary
(and, I would add, salutory) rule of con-
struction is that the
words of a statute must be read in the most natural sense
which
they bear in their context. But I do not myself so read section
8.
There is, in fact, ambiguity inherent in it; it lies in the
word " judgment".
This word in its context is capable of
meaning either the " dispositive " part
of the court's
pronouncement only, or the whole of such pronouncement
including
the grounds of judgment. If "judgment" in section 8(1)
refers
only to the " dispositive " part of the
pronouncement of the court, I think
that it would inevitably
follow that Harris v. Quine has been abrogated:
an
action on the bills has been dismissed, and that is an end of
it. But if
" judgment" embraces also the grounds of the
decision, all that is " conclu-
" sive between the
parties " is what the whole " judgment", including
its
grounds, has decided. In the instant case that was that Black
Clawson's
claim was time-barred in Germany. If, as I think, "
judgment" is so ambi-
guous, the ambiguity must be resolved.
There are, in fact, three canons of
construction available here
for its resolution.
The first is that clear and
unmistakeable words will be required for the
abrogation of a
long-standing rule of common law: see Maxwell on Inter-
pretation
of Statutes, 12th ed. 1969, p. 116:
" It is a well established
principle of construction that a statute is
" not to be taken
as affecting fundamental alteration in the general law
"
unless it uses words that point unmistakeably to that conclusion."
(Devlin J. in National
Assistance Board v. Wilkinson [1952] 2 Q.B. 648, 661.)
The
rule in Harris v. Quine was just such a long-standing
rule of law as is
appropriate for the application of this canon:
and any ambiguity must be
resolved in such a way that the rule in
Harris v. Quine is not abrogated.
Secondly, consideration of the
legislative objective is available and required,
not only to place
a court of construction in the shoes of the draftsman, but
also to
resolve any ambiguity: see Maunsell v. Olins at p. 849
E-G. It was
no part of the legislative objective to abrogate the
rule in Harris v. Quine;
so that the construction
which does not have that effect should be preferred.
Thirdly, there is a presumption
against a change of terminological usage:
" It is a sound rule of
construction to give the same meaning to the
" same words
occurring in different parts of an Act of Parliament."
(Cleasby B. in Courtauld v.
Legh (1869) L.R. 4 Ex. 126, 130). A fortiori
when
the words occur in the same section of an Act. " Judgment "
in
subsection (3) can only be read in its wider sense, as
including the grounds
of decision ; it cannot be limited to the "
dispositive " part of the judgment
(" any matter of law
or fact decided therein"). There is therefore a
presumption
that "judgment" in subsection (1) is also not so limited.
For all these reasons this does
not seem to me to be a case where it can
be said that, whatever
Parliament was trying to do, it succeeded, however
inadvertently,
in abrogating the rule in Harris v. Quine.
It remains to consider, in this
context, section 8(3); i hope that I have
sufficiently indicated
that the Report in itself, without necessity of recourse
to the
commentary, indicates the objective of this subsection—namely,
that
it was inserted as a saving provision and by way of
reassurance. I should,
1 think, in any event, have surmised from
the use of the common drafting
formula, " Nothing in this
section shall be taken to prevent . . .", that the
subsection
was inserted ex abundanti cautela, and was not intended as
a
substantive provision to deal with issue estoppel in
contradistinction to cause-
of-action estoppel dealt with in
section 8(1).
My conclusion
is therefore that, regardless of the draft Bill and the
commentary
thereon, the Greer Report is available as an aid to construction
in
such a way as to make it clear that it was not the intention of
Parliament
34
in section 8(1) to abrogate the
rule in Harris v. Quine. It is, thus,
strictly,
unnecessary to decide whether the commentary on the
draft Bill is also
available as an aid to construction. But the
technique of a draft Bill with
commentary is so common nowadays in
Reports to Parliament as
to excuse, I hope, some expatiation on
the matter. The argument
against recourse to such a commentary is
that if what Parliament
or parliamentarians (or, indeed, any
promulgators of a written
instrument) think is the meaning of what
is said is irrelevant, so must
be the opinion of any draftsman,
including the draftsman of a Bill
annexed to a Report to
Parliament. But I confess that I find this less than
conclusive.
In essence, drafting, enactment and interpretation are integral
parts
of the process of translating the volition of the electorate into
rules
which will bind themselves. If it comes about that the
declared meaning
of a statutory provision is not what Parliament
meant, the system is at fault.
Sometimes the fault is merely a
reflection of human fallibility. But where
the fault arises from a
technical refusal to consider relevant material, such
refusal
requires justification. The commentary on a draft Bill in a report
to
Parliament is not merely an expression of opinion—even if it
were only
that, it would be an expression of expert opinion, and I
can see no more
reason for excluding it than any other relevant
matter of expert opinion.
But, actually it is more: that experts
publicly expressed the view that a
certain draft would have
such-and-such an effect is one of the facts within
the shared
knowledge of Parliament and the citizenry. To refuse to consider
such
a commentary, when Parliament has legislated on the basis and
faith
of it, is for the interpreter to fail to put himself in the
real position of the
promulgator of the instrument before essaying
its interpretation. It is
refusing to follow what is perhaps the
most important clue to meaning.
It is perversely neglecting the
reality, while chasing shadows. As Aneurin
Bevan said: " Why
gaze in the crystal ball when you can read the book? "
Here
the book is already open: it is merely a matter of reading on.
Cer-
tainly, a court of construction cannot be precluded from
saying that what
the committee thought as to the meaning of its
draft was incorrect. But that
is one thing: to dismiss, out of
hand and for all purposes, an authoritative
opinion in the light
of which Parliament has legislated is quite another.
So, as at present advised, I
think that your Lordships would have been
entitled, if necessary,
to consider the commentary of the Greer Committee on
Ihe draft
Bill.
The only other matter that I
need add in this part of the case is that I
agree with those of my
noble and learned friends who hold that section 8
is not limited
to plaintiffs' judgments.
In my view, therefore, Talbot J.
was correct in following Harris v. Quine,
and in
holding that he had a discretion whether to allow the writ to
stand.
After he had given judgment Black Clawson's appeal from the
decision of
the Munich District Court to the Bavarian Court of
Appeal was heard and
determined. It was argued that this was a new
factor, showing a commit-
ment to the proceedings in Germany which
would make it inequitable to
allow a fall-back position in
England. But Talbot J. exercised his discretion
in the knowledge
that such an appeal was pending; so it is no new factor
permitting
an appellate tribunal to substitute its own exercise of
discretion
for that of the Judge in Chambers. Unless the
discretion has been exercised
in legal or factual error, an
appellate court should not other than excep-
tionally interfere
with the Judge's discretion unless it is seen on other grounds
that
his decision might well result in injustice being done: Evans v.
Bartlam
[1937] A.C. 473 ; Charles Osenton & Co. v.
Johnston [1942] A.C. 130, 138 ;
Blunt v. Blunt
[1943] A.C. 517, 526-527; Shiloh Spinners Ltd. v.
Harding
[1973] A.C. 691, 728; I respectfully agree with
Megaw and Scarman L.JJ.
that there are no grounds in the instant
case for interfering with the exercise
of discretion by the Judge
in Chambers. I would therefore allow the appeal.
35
On the other hand, I cannot
accede to the contention on behalf of Black
Clawson that they
should be at liberty to pursue their remedy in England
even if the
Federal Supreme Court should decide in their favour. I there-
fore
agree with the Order proposed by my noble and learned friends,
Lord
Wilberforce and Viscount Dilhorne.
318086 Dd 896252 120 2/75 StS.
