3PLR – KNIGHT AND SEARLE V. DOVE AND OTHERS
POLICY, PRACTICE AND PUBLISHING, 3PLR, LAW REPORTS
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KNIGHT AND SEARLE
V.
DOVE AND OTHERS
QUEEN’S BENCH DIVISION
(1964) 2 All E R 307
25 MARCH 1964
3PLR/1964/46 (QB.D-E)
BEFORE:
MOCATTA J
MAIN ISSUES
BANKING AND FINANCE: CIVIL PROCEDURE
Trustee Savings Bank – Action – Tort – Party – Action against trustees and against bank eo nomine – Whether bank could be sued in own name – Trustee Savings Banks Act, 1954 (2 & 3 Eliz 2 c 63), s 9(8), s 24(2), s 59 – Trustee Savings Banks Act, 1958 (6 & 7 Eliz 2 c 8), s 5(9).
The plaintiffs sued four named individuals, trustees of the London Trustee Savings Bank, and, as fifth defendant, the bank itself, claiming damages for alleged conversion of the proceeds of certain cheques due to the alleged fraud of W, a customer who opened an account with the bank to which the amount of the proceeds was credited and on which W was allowed to draw. The bank was not expressly created as a separate legal persona by statute or charter nor did any statute expressly confer a right to sue the bank, or for the bank to sue, in its own name. On appeal against an order striking out the bank as defendant on the ground that it could not be sued in its own name in tort, the court founda the following relevant factors—that the bank was an institution operating pursuant to statutes (the Trustee Savings Banks Acts, 1954 to 1958), owning considerable property and with numerous staff, possessing a protected name, and carrying on activities which, if the bank were a natural person or a corporation created by statute, could involve the bank in actions of tort whether as plaintiff or defendant.
Held – An action in tort could be brought against the bank in its own name (see p 317, letter e, post) for the following reasons—
(i) from the relevant factors mentioned above it followed, prima facie, that by implication from the statutes the bank could be sued in its own name in tort (see p 316, letter e, post), and
(ii) the proviso to s 9(8) of the Trustee Savings Banks Act, 1954, envisaged that other proceedings might be pending by or against a trustee savings bank than proceedings in relation to the bank’s property (see p 316, letter g, post), and
(iii) s 24(2)b of the Act of 1954, strongly suggested that circumstances could arise in which a savings bank itself could be legally liable (see p 316, letter f, post), and
(iv) without expressing a concluded view on the construction of s 5(9)c of the Trustee Savings Banks Act, 1958, the court was not satisfied that the joint effect of s 5(9) of the Act of 1958 and s 59 of the Act of 1954 showed that a trustee savings bank could not be sued in tort (see p 316, letter h, and p 317, letter d, post).
Taff Vale Ry Co v Amalgamated Society of Railway Servants (1900)([1901] AC 426) considered.
Notes
The Trustee Savings Banks Act, 1964, was not directly relevant owing to the time at which the action was brought and the time of passing of the Act of 1964, but it seems that the Act is not inconsistent with the decision (see p 317, letter i, to p 318, letter a, post).
As to the nature of trustee savings banks, see 2 Halsbury’s Laws (3rd Edn) 159, para 295, and Supplement thereto.
For the Trustee Savings Banks Act, 1954, s 9, s 24(2), s 59, see 34 Halsbury’s Statutes (2nd Edn) 791, 802, 829.
For the Trustee Savings Banks Act, 1958, s 5(9), see 38 Halsbury’s Statutes (2nd Edn) 1086.
Interlocutory Appeal
The plaintiffs in this action, a firm of stockbrokers, issued a writ on 4 October 1963, against four named individuals, stating them to be sued as the trustees of the London Trustee Savings Bank, and against the London Trustee Savings Bank as fifth defendant. A conditional appearance having been entered on behalf of the fifth defendant (“the bank”), it was sought on the bank’s behalf to have the bank struck out from the action on the ground that there was no right in law to sue the London Trustee Savings Bank under that name. Master Diamond having on 6 December 1963, accepted this contention, the bank appealed to the Judge in Chambers, Mocatta J who, at the request of the parties, delivered judgment in open court. The facts appear in the judgment.
G W Cheyne for the plaintiffs.
J Milnes Holden for the defendants.
25 March 1964. The following judgment was delivered.
MOCATTA J read the following judgment. This appeal from a decision of Master Diamond ordering that the fifth defendant, the London Trustee Savings Bank, be dismissed from the action, raised questions of very considerable difficulty and importance and I was accordingly asked by the parties to deliver judgment in open court. The matter arises in this way. On 4 October 1963, the plaintiffs, who are a firm of stockbrokers, issued a writ against four named individuals, stating them to be sued as the trustees of the London Trustee Savings Bank, and against the London Trustee Savings Bank as fifth defendant. I will hereafter refer to the fifth defendant for short as “the bank”, but without in so doing intending in any way to pre-judge the principal issue arising on the appeal. The writ was indorsed with a claim for £3,463 16s 4d damages for conversion of ten cheques. The statement of claim stated that on or about 16 December 1961, one John Albert White opened an account with the bank in the name of Charles Derek Clark, that at various dates between December 1961 and September 1962, the plaintiffs made out cheques amounting in aggregate to £3,463 16s 4d to C D Clark intending them for C D Clark & Son, who are a firm of jobbers with whom the plaintiffs are accustomed to deal, that the cheques were entrusted to White to transmit to the jobbers, but that he fraudulently converted them to this own use and paid them into the account which he had opened with the bank, that the bank collected the proceeds of the cheques from the plaintiffs’ bankers and credited the sums to the account which White had opened with the bank in the name of Clark and that shortly afterwards White was allowed by the bank to draw out the money so credited. The defence of the first four defendants, amongst other defences, including one of contributory negligence, relies on s 5(9) of the Trustee Savings Banks Act, 1958, which I shall set out laterd and which, according to the argument advanced for the bank provides, on its true construction, a wide
A conditional appearance to the writ was entered on behalf of the bank, and the appropriate steps were then taken on its behalf to have it struck out from the action on the ground that there is no right in law to sue the institution—to use a neutral term—known as the London Trustee Savings Bank under that name. Master Diamond accepted this contention; hence this appeal. The determination of this appeal ultimately depends on a close examination of the current Trustee Savings Banks Acts, 1954 and 1958, as well as on an examination of some of the earlier statutes dealing with such banks and the history of the particular institution sought to be made the fifth defendant in this action. Before embarking on this it is important that I should have in mind the correct principles of law determining the circumstances in which it is possible in these courts to bring an action other than against a natural person. Both counsel presented their most helpful and thorough arguments in this order and I propose to follow it.
Counsel for the defendants formulated a general proposition as to when in the English courts an action can be brought by or against a party other than a natural person, and gave illustrations of each part of the proposition. Counsel for the plaintiffs was prepared to accept the proposition, though he questioned the classification of some of the illustrations. The proposition was that no action can be brought by or against any party other than a natural person or persons unless such party has been given by statute, expressly or impliedly, or by the common law, either (a) a legal persona under the name by which it sues or is sued or (b) a right to sue or be sued by that name. As to (a), namely, legal personae, this may be divided into (i) corporations sole;(ii) corporations aggregate, incorporated by Royal Charter or special Act of Parliament or under the Companies Acts;(iii) bodies incorporated by foreign law; and (iv)”quasi-corporations” constituted by Act of Parliament, such as the War Damage Commission: see Inland Revenue Commissioners v Bew Estate Ltd ([1956] 2 All ER 210 at pp 213, 214,[1956] 1 Ch 407 at pp 415, 416). As to (b), namely, parties which are not legal personae, but have a right to sue or be sued by a particular name, these may be subdivided into (i) partnerships: see RSC, Ord 81;(ii) trade unions and friendly societies, both of which types have a membership; and (iii) foreign institutions authorised by their own law to sue and be sued, but not incorporated: see, for example, Chaff and Hay Acquisition Committee v Hemphill, a decision of the High Court of Australia, on appeal from New South Wales. It was common ground that legal personality within (a) might be conferred by statute either expressly or by implication and that the same applied to parties within (b) having a right to sue or be sued in a particular manner but not being legal personae. It was further common ground that no statute expressly conferred that right to sue or be sued eo nomine on any trustee savings bank or on the bank the fifth-named defendant. If in this case there be such right or obligation, it must, therefore, be derived by implication from the relevant statutes.
It will be seen from what I have already said that the classification as between (a) and (b) of counsel for the defendants’ proposition presents considerable difficulty. This is particularly so in the case of trade unions, since although it has been decided that they could, prior to the Trade Disputes Act, 1906, be sued in tort in their registered name (Taff Vale Ry Co v Amalgamated Society of Railway Servants), and may sue in tort (National Union of General and Municipal Workers v Gillian), and in contract (Bonsor v Musicians’ Union), it remains a somewhat moot point whether they are properly to be regarded as legal personalities distinct from their individual members and thus falling within (a), or as having no separate juristic personality, but nevertheless being entitled to sue and be sued in their own name and thus falling within (b). In Bonsor’s case Lord McDermott and Lord Somervell Of Harrow adopted the latter view ([1955] 3 All ER at p 535 and p 544,[1956] AC at p 144 and at p 157), whilst Lord Morton Of Henryton and Lord Porter adopted the former ([1955] 3 All ER at p 524 and p 527,[1956] AC at p 127 and at p 131). Lord Keith Of Avonholm adopted a somewhat intermediate position, since he held that a trade union was in a sense a legal entity and that it would not be wrong to call it one, but that it was not a legal entity distinguishable at any moment of time from the members of which it was at that time composed ([1955] 3 All ER at p 538,[1956] AC at p 149). Earlier, in Gillian’s case ([1945] 2 All ER at p 603,[1946] KB at p 85), Scott LJ had considered that trade unions had by statute been given the status of a persona juridica, whilst Uthwatt J considered a trade union was a “near-corporation”([1945] 2 All ER at p 604,[1946] KB at p 88).
I am not called on here to seek to resolve questions of classification such as these, which are clearly of great interest to writers on jurisprudence. What does concern me, however, is that the courts have from time to time, and perhaps increasingly in modern times, permitted a number of what I may call heterogeneous institutions to sue or be sued in their own names without such institutions having been expressly incorporated by any statute. (For the most recent example of an expression of judicial opinion on juridical personality without incorporation, see per Lord Denning MR in Willis v Association of Universities of the British Commonwealth (ante p 39)). Further, I am concerned to extract any principles of approach or salient points from the cases relied on that may be of assistance in examining the statutes applying to the bank.
Counsel for the plaintiffs strongly relied on the Taff Vale Railway case and the two other trade union cases which I have citede, and also on the decision of Slade J in Longdon-Griffiths v Smith, in which it was decided, by applying the reasoning in the Taff Vale Railway case to the Friendly Societies Act, 1896f, that an action for libel against a friendly society must be brought against it in its registered name and could not be brought against individual defendants as trustees of the society. I have not been able to derive much assistance from Longdon-Griffiths v Smith, but the reasoning in the Taff Vale Railway case is more to the point. It was strongly relied on by counsel for the plaintiffs, whilst counsel for the defendants submitted that it was distinguishable. In that case, the House of Lords restored the judgment of Farwell J that an action in tort could be brought against a trade union in its registered nameg. In arriving at his decision Farwell J drew attention to a number of matters, some of which are present in the Trustee Savings Banks Acts and some of which are absent. As regards similarities he emphasised that the legislature, in giving a trade union the capacity to own property and the capacity to act by agents, had, without incorporating it, given it two of the essential qualities of a corporation in respect of liability in tort. He also attached importance to s 8 and s 9 of the Trade Union Act, 1871, which expressly provided for actions in respect of property being brought by and against the trustees, an express intention which he thought impliedly excluded such trustees from being sued in tort. On the other hand he emphasised that (i) a trade union was an association of individuals,(ii) the Trade Union Acts contained provisions imposing penalties on a trade union, to which there is no parallel in the Acts with which I am concerned, and (iii) if the contention of the defendant society in that case were well founded, the legislature had authorised the creation of numerous bodies of men capable of owning great wealth and of acting by agents with absolutely no responsibility for the wrongs that they might do to other persons by the use of that wealth and the employment of those agents. In the House of Lords Lord Macnaghten emphasised point (iii) ante ([1901] AC at p 438), and some weight was expressly attached by all their lordships, save Lord Halsbury LC to the fact that the Trade Union Acts provided that a trade union must have a registered name, which Lord Macnaghten described as a collective name for all the members ([1901] AC at pp 439, 440). These seem to me to be the points of major importance in the Taff Vale Railway case that I should bear in mind in examining the facts and relevant statutes relating to the bank to see if by implication from the express words of the statutes it is possible to sue the bank in tort in its own name.
The present bank derives its origin historically from the London Provident Institution, which was established in 1816 as the result of a meeting of a number of distinguished gentlemen, including the famous economist David Ricardo, under the chairmanship of Sir Thomas Baring “to take into consideration the properity of establishing a savings bank for the City of London and its vicinity”. The initial expenses appear to have been defrayed out of the pockets of the founders, though they were not themselves to benefit in any way therefrom. In 1817 the first of a long series of statutes was passed for the encouragement and protection of savings banks, and in 1818 the managers placed the institution under the provisions of that Act.
I can pass straight to the consolidating Act of 1863 under which the bank in its present form is certified. The preamble to the Acth stated that
“whereas numerous banks for savings have been established under the authority of the Acts now in force for the safe custody and increase of small savings”,
and that to s 2 recited that
“whereas it is expedient to give protection to such savings banks already established as aforesaid and the funds thereof and to afford encouragement to the formation and establishment of like institutions.”
Section 2 went on to say that if any number of persons had formed or should form any society for the purpose of establishing and maintaining any institution in the nature of a bank to receive deposits of money for the benefit of depositors and to return the whole or any part of such deposit and the produce thereof to the depositors after only deducting the necessary expenses of management, but deriving no benefit from any such deposit or the produce thereof, and desired the benefit of the provisions of the Act, they should cause the rules and regulations for the management of such institution to be deposited and filed as provided. No new banks which were formed thereafter should be entitled to the benefits of the Act unless their formation had been sanctioned and approved by the Commissioners for the Reduction of the National Debt (hereinafter called “the commissioners”). Under the provisions of s 4 of rules had to be approved by the barrister-at-law appointed by the commissioners, a gentleman whose functions were in 1876 transferredi to the Registrar of Friendly Societies, where they still remain. Section 5 provided that every savings bank should be certified by the title of “Savings Bank certified under the Act of 1863”, and any other person using or adopting such title could be convicted of a misdemeanour. Section 9 contained provisions for the punishment of a wide variety of officers of a savings bank, and s 10 was a lengthy section vesting all moneys, goods, chattels and effects whatever and all rights and claims belonging to a savings bank in the trustees for the time being. The relevant words as to suits by and against the trustees were that the trustees were authorised:
“to bring or defend, or cause to be brought or defended, any action, suit, or prosecution, criminal as well as civil, in law or equity, touching or concerning the property, right, or claim aforesaid, of or belonging to or had by such savings bank; and such person or persons so appointed shall and may in all cases concerning the property, right or claim aforesaid of such savings bank sue and be sued … in his or their proper name or names as trustee or trustees of such savings bank, without other description.”
This was followed by s 11, which is also of importance, which provided that:
“No trustee or manager of any savings bank … shall be personally liable, except—1. For monies actually received by him on account of or for the use of such savings bank, and not paid over and disposed of in the manner directed by the rules of the savings bank: 2. For neglect or omission in complying with the rules and regulations required by this Act to be adopted as hereinbefore is provided in the maintenance of checks, the audit and examination of accounts, the holding of meetings and keeping minutes of proceedings thereat: 3. And also for neglect or omission in taking security from officers as is hereinbefore provided.”
Section 13 and s 15 contained provisions dealing with effects, moneys and funds belonging to any savings bank. Section 22 mentioned interest being credited by the Commissioners to the credit of the savings bank on whose account any sum of money was paid, whilst s 38 prevented anyone who had a deposit in any savings bank (other than as a executor, etc) from making any deposit in any other account at the same or any other savings bank. Section 55 provided that the trustees should annually cause a general statement of the funds of a savings bank to be prepared and transmitted to the Commissioners, and by s 56 it was provided that if annual statements as described by the Act were not so transmitted the Commissioners were required to publish in the “London Gazette” and in the appropriate county newspapers the name of every savings bank so making default.
There was a number of sections providing in detail how the trustees should carry out their duties and what should be a proper discharge to them, but not mentioning any question of discharge to the savings bank itself. However, s 34 provided that in the case of money deposited by a charitable or provident institution or society, penny savings bank, or friendly society, and subsequently being withdrawn,
“the receipt of the treasurer, trustee or other officer for the time being [of such depositing institution] shall be a sufficient discharge for the same, and the savings bank paying such money, and the trustees, managers and officers thereof, shall not be responsible for any misapplication or for any want of authority of the person or persons acquiring or receiving payment of such money.”
This section, which is clearly of considerable importance, is reproduced almost verbatim as s 24(2) of the current Trustee Savings Banks Act, 1954.
I can find no mention in the Act of 1863 relating to the holding of real property by savings banks, but this was dealt with by s 4 of the Savings Banks Act, 1904, which added to s 10 of the Act of 1863, summarised above, powers to the trustees of a savings bank, with the consent of the Commissioners, to purchase land or erect buildings or lease any land or buildings for the purposes of their bank. It follows from this addition to s 10 that actions concerning real property could also be brought by and against the trustees.
Section 10 of the Act of 1863 was repealed and s 4 of the Act of 1904 was amended by the Savings Banks Act, 1929, which by s 16(1)(2)(6) provided that the trustees of a savings bank should appoint four of their number to be custodian trustees in whom all property of whatever description belonging to a trustee savings bank should be vested, but that on there ceasing to be any custodian trustees of a bank the property should vest in the general trustees of the bank until the appointment of new custodian trustees. Subsection (8), after providing that the custodian trustees might sue and be sued by the name of “the Custodian Trustees for the … Trustee Savings Bank” continued:
“Provided that nothing in this section shall affect any proceedings by or against or relating to the property of a trustee savings bank, which are pending at the time of the first appointment of custodian trustees for that bank.”
The consolidating Act of 1954 repealed the whole of the Act of 1863 and the sections of the two Acts of 1904 and 1929 which I have cited, and re-enacted them, as well as other Acts, in more modern form and language. I do not think it necessary, however, having traced the ancestry of the more important sections for the purposes of this appeal, to repeat the language of the relevant sections in any detail. The purposes of a savings bank are set out in s 1(3), the certification and protection of its name are dealt with in s 3, s 5 and s 80, the provisions regarding custodian trustees enacted in s 16 of the Act of 1929 are re-enacted in s 9; s 24(2) re-enacts s 34 of the Act of 1863 and provides that on the withdrawal of money by various charitable societies the receipt of the treasurer of such a society.
“shall be a sufficient discharge and the trustee savings bank and its trustees, managers and officers shall not be responsible for any misapplication or for any want of authority of the person acquiring or receiving payment”j,
Counsel for the defendants placed reliance on s 11 and s 13, which speak of moneys deposited with the trustees of a bank and interest paid to depositors by the trustees of a bank, and on s 20, which deals with the settlement of disputes between the trustees and managers of a bank and depositors, as indicating that wherever the draftsman was dealing with contractual rights he was careful to use the words trustees, or trustees and managers, but the Act does not seem to me to be altogether consistent in this respect: see, for example, s 14, s 17 and s 18, which speak of depositors or deposits in or sums paid into a trustee savings bank. There are many other references to the bank throughout the statute as distinct from the trustees or the trustees and managers thereof. There are also references to the discharge of the trustees without any separate mention of the discharge of the bank.
It is necessary to refer to only two other statutory provisions. By reg 31 of the Trustee Savings Banks Regulations, 1929l dated 25 November 1929, four days after the coming into effect of the Act of 1929, the following was provided:
“When any payment is made or act done by the trustees in accordance with the Savings Banks Acts, and the regulations for the time being made thereunder, and the rules of the bank, they shall be indemnified against all claims on the part of any person in respect of such payment or act, but any person may nevertheless recover any sum lawfully due to him from the person to whom the trustees have paid the same.”
No statutory authority was cited in the regulations for this provision and counsel for both parties told me that some doubt existed as to its validity. However this may be, the Trustee Savings Banks Act, 1958, in sub-s (9) of s 5, the rubric to which is “minor amendments as to management of banks”, provided as follows:
“Where any payment is or has before the coming into force of this section been made or act done by the trustees of a trustee savings bank in accordance with the enactments and regulations relating to trustee savings, banks for the time being in force, and in accordance with the rules of the bank, the trustees of the bank are hereby indemnified against all claims on the part of any person in respect of the payment or act, but any person may nevertheless recover any sum lawfully due to him from the person to whom the trustees of the bank have paid it.”
This subsection, as I have said, is relied on in the defence of the first four defendants and its existence is no doubt the reason why the bank was made a fifth defendant.
Finally, it is necessary to make some reference to the rules of the bank for the light that they throw on the relative positions of trustees, managers and depositors, in so far as material to the point which I have to decide. The current version of the rules was approved by the registrar in 1943 and has since been the subject of some minor amendments; when the rules were approved the Trustee Savings Banks Act, 1863 was still in force. Some of the rules are clearly fairly recent in origin; others bear the signs of a respectable antiquity. I summarise below what appears material for present purposes: (i) the depositors, although the sole beneficiaries of the activities of the bank, its trustees and managers, have no control whatever over the bank or its activities; if membership requires (inter alia) control, the depositors were not and are not members of the bank, but merely beneficiaries and creditors;(ii) there are local committees of each of the head offices, constituent banks and branch banks, the membership of which is limited to persons who are either trustees or managers;(iii) the local committees appoint managers subject to confirmation by the board of management and nominate persons who are already managers for appointment by the board as trustees;(iv) the board of management is composed of a number of representatives of each head office, constituent bank and branch bank, with a limited power to co-opt persons, wishing to become trustees or managers;(v) the board of management appoints trustees from managers nominated by local committees and confirms the appointment by such committees of managers; it also appoints the actuary and appoints or confirms the appointment of the other paid officers of the bank;(vi) all trustees are managers;(vii) no trustees or managers receive any reward or remuneration for their services, which can be said to be of a charitable character;(viii) the functions carried out by managers as distinct from trustees have become less as the years have progressed until at the present time they are almost entirely nominal;(ix) the number of trustees is not laid down: at the present time it is sixty;(x) the rules in some places repeat statutory provisions: thus r 11 repeats s 11 of the Act of 1863 (s 59 of the Trustee Savings Banks Act, 1954), whilst r 32 repeats almost verbatim reg 31 of SR & O 1929 No 1048m. In addition the rules show that there are seventeen head offices or constituent banks or branches, and the accounts for the year ending 20 November 1962, showed that the bank had nearly three-quarters of a million ordinary depositors, some 40,000 special depositors, and deposits of nearly £100 million. Its premises, furniture and fittings appeared in the balance sheet at over £250,000. I had no evidence of the size of the staff employed, but in view of the quantity of business handled it must have been numerous.
In these circumstances can the bank be sued in tort in its own name? As regards direct authority there is none in the books. In Cardiff Savings Bank and Aberdare District of Oddfellows, ex p Friendly Societies Registrar, a trustee savings bank apears to have applied in its own name for a writ of prohibition, but was unsuccessful, though on grounds not relevant to this case. The report, however, is scanty and I would not place any reliance on it for present purposes. If I seek to apply to the bank the points on which stress was laid in the Taff Vale Railway case, I find that (i) the bank owns property, albeit vested in trustees, which is of very considerable value;(ii) it also has many officers constituting its paid staff, though I do not know how many;(iii) it has a name, which is protected by the sections of the Act of 1954 to which I have referred. I am unable to find any material difference for present purposes between the statutory provisions of the Act of 1863 and the Act of 1954 relating to trustee savings banks and the provisions as regards the registered name of a trade union in the Trade Union Acts. Master Diamond relied on this point, but counsel for the defendants placed no reliance on it before me. So much for points of close resemblance.
The next point, to which much argument was directed, was that the bank has no members comparable to members of a trade union, which by statutory definition means a combination (inter alia) of workmen. In the absence of such membership it was argued, and Master Diamond held, that the bank could not have the capacity of a quasi-corporation, analogous to that of a trade union, so as to be capable of being sued in its own name in tort. This is plainly a point of importance and much weight was attached to it in the Taff Vale Railway case. The question which I have to decide, however, is whether as the result of the relevant statutes and the action taken pursuant to them in the setting-up of the bank, something has been created which is sufficiently recognisable in law to be suable in tort. I have not to decide whether a body or aggregate of natural persons has been incorporated. Moreover, the range of “quasi” or “near” corporations arising from statutory provisions, as well as of bodies expressly incorporated, varies enormously in what may be called its membership. Even with limited companies there may be members who are shareholders and beneficiaries of the companies, but who have no say in their control. On the other hand, there are numerous government-sponsored bodies like the National Coal Board, the War Damage Commission, and the Chaff and Hay Committee, who were defendants in the Australian case which I have citedn, where the members of the body, be it board, commission or committee, whilst controlling its activities pursuant to some statute, derive no personal benefit, other than their salaries, from its activities. I recognise that the absence of a membership of the bank comparable to that of a trade union differentiates this case from the Taff Vale Railway case. The differentiation does not, however, in my judgment determine the issue on the appeal in favour of the bank. I should perhaps record that counsel for the plaintiffs argued that if members of the bank were necessary for its success, they were to be found in the trustees if not in the depositors; the former exercising control but deriving no benefit from it, the latter deriving benefit from the bank, but playing no part in its control. I do not find it necessary to reach a conclusion on this counter to the absence of membership argument, since the question as I see it is whether the statutes impliedly give a right to sue the bank in tort in its own name.
The statutory position of the trustees, however, gives rise to difficult problems. Counsel for the plaintiffs argued that the provisions of s 10 of the Act of 1863 (to which one must add those of s 4 of the Savings Banks Act, 1904, in relation to real property)o were in effect indistinguishable from those affecting the trustees of the property of trade unions in s 8 and s 9 of the Trade Union Act of 1871, and that a crucial factor in Farwell J’s judgment ([1901] AC at p 431) was that in his view the trustees could be sued only in respect of the property of the unions and not in tort. Counsel for the plaintiffs went on to argue that the provision of custodian trustees in the Savings Banks Act, 1929, and now in s 9 of the Act of 1954, was merely re-enacting the older statutes in modern form and providing a handy and less cumbersome form of bringing actions in relation to the property of savings banks. I have, however, been unable to derive much assistance from this line of argument. In the first place, I think that s 10 of the Act of 1863 was, with the addition in the Act of 1904, somewhat wider than the comparable provisos in the Trade Union Act, 1871. Secondly, the speeches in the House of Lords in the Taff Vale Railway case indicate to me that an action in tort could have been framed other than against the union in its registered name by bringing a representative action against selected defendants coupled with the names of the trustees, so as to enable an order to be made that the damages awarded should be met out of the funds of the union. Thirdly, the position as regards the powers of control and management of a savings bank vested in the trustees is very different from that of the position of the trustees of the property of a trade union. On the other hand, the second point which I have just made suggests that it cannot be rightly submitted that the bank cannot be sued in its own name merely because an action might have been framed against different defendants to produce the same result.
If, then, I look at the position omitting for the time being s 5(9) of the Trustee Savings Banks Act, 1958, I find an institution operating pursuant to statutes, owning considerable property and with numerous staff, possessing a protected name, and carrying on activities which from time to time would, in the nature of things, involve it, were it a natural person or a corporation expressly created by statute, in actions for tort, whether as plaintiff or defendant. These factors in themselves would incline me to the conclusion that it followed by implication from the statutes that the institution could be sued in its own name in tort. That inclination is re-inforced by two provisions in the Act of 1954 to which I have already referred. The first, which also appeared in s 34 of the Act of 1863, is s 24(2) of the Act of 1954, where words are used—”the trustee savings bank and its trustees, managers and officers shall not be responsible”p—strongly suggesting that circumstances can arise in which a savings bank itself can be legally liable. The second provision is the proviso to s 9(8) of the Act of 1954, where it is saidq that “nothing in this section shall affect any proceedings by or against or [my italics] relating to the property of a trustee savings bank, which are pending …”. The proviso seems to envisage that proceedings may be pending by or against a trustee savings bank other than in relation to its property. Further, since the operative part of the subsection is permissive and not mandatory—”the custodian trustees of a trustee savings bank may sue and be sued”—the subsection does not prohibit future proceedings of the same character as the pending proceedings envisaged in the proviso. I would, therefore, conclude that the bank can be sued in its own name in tort, unless s 5(9) of the Act of 1958 leads to a contrary resultr. I am reluctant to express a concluded view on the true construction of that subsection since, whatever the ultimate decision on the point I have to determine, the court trying the case against the first four defendants may have to construe the subsection as a vital issue in the case. I am, however, prepared for present purposes to accept the argument of counsel for the defendants that on its true construction the subsection provides a complete defence to the trustees of the bank if, on the facts, they can bring themselves within its terms. He bases two arguments on this subsection. The first is that the subsection seems to assume that the trustees might in certain circumstances be sued in tort, which is an additional distinction between the statutory positions of trustees of a savings bank and those of a trade union, as discussed in the Taff Vale Railway case. This may well be so. Secondly, he draws the contrast between s 59 of the Act of 1954s with its provision that no trustee shall be personally liable except in certain circumstances, and this subsectiont which omits the qualifying adverb. This subsection, therefore, he argues, is concerned solely with actions brought against the trustees in their representative capacity on behalf of the bank: it indicates, he argues, that the bank itself cannot be sued and that, if it can, the subsection can be rendered nugatory. The subsection is a somewhat strange one both in its language and its setting and, in addition, appears to be retrospective in effect. I recognise that the provisions of s 59 of the Act of 1954 and the absence of the word “personally” in sub-s (9) of s 5 in the Act of 1958 are capable of supporting the argument of counsel for the defendants. On the other hand, the language used—”the trustees of the bank are hereby indemnified”—seems to me to be much more appropriate to protect the trustees as individuals than to protect the funds of the bank. If the subsection were intended to protect the funds of the bank, I am of the opinion that different words would have been used. I am not satisfied, therefore, as a matter of construction, that the effect of sub-s (9) of s 5 of the Act of 1958, taken in conjunction with s 59 of the Act of 1954, is to indicate that the bank cannot be sued in its own name in tort. I would add that if I be right in my previous conclusion that the implication to be drawn from the statutes down to and including the Act of 1954 is that the bank can be sued in its own name in tort, this particular subsection of the Act of 1958 would be a very strange way of altering the position.
Although I naturally differ from the decision of Master Diamond on a matter of much difficulty with considerable hesitation, I have come to the conclusion for the reasons given that an action can be brought against the bank in its own name in tort and that the appeal must, therefore, be allowed.
I should add that counsel for the plaintiffs drew my attention to the Trustee Savings Banks Act, 1964, which received the Royal Assent as recently as 27 February of this year. The purpose of the Act is to allow savings banks to receive money on current account on which no interest should be paid by the bank, but which shall be available for payment of any cheque drawn on the bank by the person in whose name the account stands. Counsel for the plaintiffs pointed out in the first place, that the Act, which is of some length, refers repeatedly to “trustee savings banks” and “the bank” as if those expressions referred to some recognisable entity, whilst in contrast only two references are made throughout to the trustees of such a bank. He submitted, therefore, that Parliament had recently recognised by the words used that a trustee savings bank had some entity, distinct from that of its trustees, as, so he argued, had for many years been the law. He also submitted that a trustee savings bank that took advantage of the permission of the Act would be carrying on business as a bank and would, prima facie, in circumstances such as are alleged in the statement of claim in this case, be entitled to have its liability determined in accordance with s 4 of the Cheques Act, 1957u. If the bank’s present argument were right and it could not be sued in tort, and s 5(9) of the Act of 1958 applied to protect the trustees when sued in their representative capacity, a most unusual and double indemnity might be available to the trustees.
To the extent that the Act of 1964 altered the law it is clearly irrelevant to my decision on this appeal. Moreover, my conclusion was arrived at without consideration of the arguments of counsel for the plaintiffs based on the recent Act. I need only say that my reasoning does not appear to be inconsistent with what the recent Act can be said to have assumed to be the pre-existing law.
Appeal allowed.
Solicitors: Chamberlain & Co (for the plaintiffs); Lewin, Gregory, Mead & Sons (for the defendants).
K Diana Phillips Barrister.
Cases referred to in judgment
Bonsor v Musicians’ Union [1955] 3 All ER 518,[1956] AC 104,[1955] 3 WR 788, 3rd Digest Supp.
Cardiff Savings Bank and Aberdare District of Oddfellows, ex p Friendly Societies Registrar (1887), 4 TLR 10, 3 Digest (Repl) 142, 106.
Chaff and Hay Acquisition Committee v Hemphill (1947), 74 CLR 375.
Inland Revenue Comrs v Bew Estate Ltd [1956] 2 All ER 210,[1956] 1 Ch 407,[1956] 3 WLR 139, 28 Digest (Repl) 20, 77.
Longdon-Griffiths v Smith [1950] 2 All ER 662,[1951] 1 KB 295, 25 Digest (Repl) 357, 393.
National Union of General and Municipal Workers v Gillian [1945] 2 All ER 593,[1946] KB 81, 115 LJKB 43, 174 LT 8, 2nd Digest Supp.
Taff Vale Ry Co v Amalgamated Society of Railway Servants (1900),[1901] AC 426, 70 LJKB 905 n, 83 LT 474, 43 Digest 92, 957.
Willis v Association of Universities of the British Commonwealth, ante p 39.
