South Australian Cold Stores Ltd v Electricity Trust of South Australia

High Court of Australia|1965-07-01|Before: Owen JJ

High Court of Australia McTiernan A.C.J. Kitto and Owen JJ. South Australian Cold Stores Ltd v Electricity Trust of South Australia [1965] HCA 67

The company alleged by its statement of claim that correspondence which took place in January, February, March and April 1955, between the parties or their respective solicitors contained a contract and an implied term was that the Trust would repay to the company money overpaid by the latter for electricity supplied between 1st November 1954 and 1st October 1957. The company further alleged that the overpayment was illegal and recoverable as money had and received. The action was tried by Napier C.J. The parties tendered to the court a statement of agreed facts. The question of liability depended upon the matters contained in that document. The learned Chief Justice found against the company on its claim and for the Trust on a counterclaim. The company appeals to this Court.

The present action was commenced on 24th December 1958. It was a sequel to the previous case because the judgment of this Court provided sure ground for asserting that the prices order of May 1951 was the only valid order in force from November 1954 to October 1957, the period to which the present action relates. The Trust introduced a new tariff expressed to operate on and from November 1954. This tariff did not differentiate as previous tariffs had done between electricity consumed for power and electricity consumed for purpose of lighting. As it was not revealed that the prices order of January 1952 was invalid - its invalidity, of course, was a matter of contention between the parties from February 1953 until the previous litigation ended in the High Court in October 1957 - the Trust consistently with its belief in the validity and effectiveness of that order adopted the power rate specified therein as the rate which it would charge as and from 1st November for power and lighting. The introduction of the new tariff required an alteration of meters installed on consumers' premises. Hitherto separate meters, one or more for power only, another or others for lighting only, were installed on consumers' premises. The new tariff involved replacing them by one or more meters recording all electricity consumed without differentiating between power and light.

On 18th February 1955 the solicitors for the Trust wrote to the company a letter of which the material part is as follows: "On 1st November 1954 the Trust introduced a still further tariff schedule effecting general reductions in rates. In the case of consumers who like your company were on tariff B (commercial and industrial lighting) and tariff F (maximum demand power) the reduction in charges was effected by combining the two tariffs and charging both light and power at what was formerly the power rate. The metering required for this new tariff (duplicated where necessary for additional premises) is therefore reduced to - 1. Meters to record all electricity used (no longer discriminating between light and power); 2. Meters to record maximum rate of use of electricity (again no longer discriminating between light and power). Before removing any of the existing meters, however, the Trust has consulted us with regard to your company's contentions as to the validity of the Trust's tariffs of 14th January 1952 and as to whether your company may have some contention as to the tariffs of 1st November 1954, and has instructed us to give your company the opportunity of saying whether it has any wishes with regard to metering. The considerations as we see them are - In favour of changing the metering: Maximum demand charges would then be made on the actual maximum rate of use of electricity: under the present metering this can only be calculated by adding together the maximum demand for lighting and the maximum demand for power: this presupposes that these maxima coincide in point of time - the actual composite maximum could therefore be less than the aggregate of the two separate maxima. Unless the bulk of the lighting is used at a different time from the bulk of the power the discrepancy (if any) is not likely to be very great. In favour of retaining the present metering: From the Trust's point of view this is not desired: from the point of view of your company this would only be desirable if you wished to continue (i.e. presumably until the present litigation is concluded) making calculations based on the present metering. This letter is of course without prejudice to the respective contentions of the Trust and of your company."

On 22nd February 1955 the solicitors for the Trust wrote to the consumer as follows: "In our letter to you of 18th February we omitted the following - 1. To enclose the accounts Nos. 272026-9 for 1st February 1955, which we now enclose. 2. To reply expressly to the latter paragraphs of your letter of 28th January to the Trust, to which we refer below. The Trust's action in submitting the accounts to its solicitors for advice before sending the accounts on to you is a natural consequence of your challenge to the validity of an earlier tariff change" (the change made after the "prices order" of January 1952 was made). "Far from intending any discourtesy, the Trust was and is desirous not only of acting with complete legal propriety in relation to your company as a consumer concerning whose account there is litigation, but of ensuring that no action of the Trust (such as removal of meters) should be taken which might prevent your company from making calculations desired by it pending determination of the question raised by the litigation, without first giving your company an opportunity of expressing its wishes in the matter."

On 10th March 1955 the company wrote, in reply, a letter to the solicitors for the Trust: "We wish to convey our appreciation of the Electricity Trust's expressed desire not to alter any metering which would put us in the position of not being able to continue the computation of the figures which we have hitherto been doing. We are however, if it will assist the Trust in any way, agreeable to change over to single metering and pay the accounts as rendered, provided any amount so paid is not taken as an acceptance by us of the correctness either of the account or any of the accounts which we have previously disputed."

On 6th April 1955 the solicitors for the Trust wrote to the company as follows: "We duly received your letter of 10th March and immediately communicated its contents to our client the Electricity Trust suggesting that its technical officers arrange for the changeover of meters. This, we assume, has been arranged with you and attended to. We have to-day been informed by the secretary of the Electricity Trust that your office when reminded that the Trust is still waiting for your cheque for accounts rendered in respect of several months said that you were waiting on a reply from us to your letter of the 10th March. We did not take your letter as calling for a reply but only for the action to which we have already referred. In view of the message received by the Trust however we are now instructed to confirm that any amount paid by you in respect of accounts rendered as a result of the changeover of metering is not to be taken as an acceptance by you of the correctness either of the account so paid or any of the accounts which you have previously disputed. Please forward your cheque to the Trust direct."

On 17th April 1958 the Trust's technical officers came to the company's premises and without objection made the changeover of meters on the premises in accordance with the Trust's desires expressed in the letters. To effect this changeover the officers removed the meters which were there. They substituted meters which registered in kilowatt hours without differentiating between electricity for lighting and electricity for power. Each meter similarly recorded the company's maximum demand for electricity. None was capable of registering separately the respective quantities of electricity used for lighting and power over the respective maximum demands for the consumer in respect of lighting and power. The accounts thereafter rendered by the Trust to the company for electricity supplied since 1st November onwards were based on the recordings of the new meters: such accounts were calculated at a power rate equivalent to that apparently authorized by the "prices order" of 14th January 1952. But as the decision of this Court revealed, long after the event, such order was invalid, and the order of 14th May 1951, which fixed its lower rates, was the only valid order. It was the order to which as a matter of law the Trust ought to have adhered. The Prices Act protected consumers of the Trust's electricity against liability in excess of the valid maximum rate; it was an offence against the Act to charge such excess.

Turning to pars. 17 and 17a of the statement of claim. There is no proof of an express agreement on the part of the Trust in, or substantially in, the terms alleged in par. 17. The next paragraph, 17a, alleges an "implied agreement" between the parties arising from the facts alleged in the statement of claim. The facts, however, on which the company must depend are the facts to which the parties agreed for the purposes of the trial of the action including, of course, the correspondence between them. Reliance is placed particularly on two passages in the correspondence to support the allegation in par. 17a of an implied agreement. In the company's letter of 10th March 1955 to the Trust it wrote: "We are however, if it will assist the Trust in any way, agreeable to change over to single metering and pay the accounts as rendered, provided any amount so paid is not taken as an acceptance by us of the correctness either of the account or any of the accounts which we have previously disputed." In the reply of 6th April 1955, from the Trust's solicitors, they wrote: "In view of the message received by the Trust however we are now instructed to confirm that any amount paid by you in respect of accounts rendered as a result of the changeover of metering is not to be taken as an acceptance by you of the correctness either of the account so paid or any of the accounts which you have previously disputed. Please forward your cheque to the Trust direct." To these quotations there may be added the last sentence in the letter of 18th February 1955, from the defendant's solicitors: "This letter is of course without prejudice to the respective contentions of the Trust and of your company". It is argued for the company that because the letters contain these passages which I have quoted, the agreement evidenced by the letters has an implication to the effect that the Trust would refund the excess of moneys paid in discharge of the accounts which the company agreed to pay, over the lawful maximum. The company contended that such passages would be meaningless if there was no such implication. The company relied on the fact that the "single meters" were not suited to the tariff which had come in upon the making of the prices order of May 1951 which the company was contending to be the only valid order. In Halsbury's Laws of England, 3rd ed., vol. 8, at p. 121 et seq., it is said: "Such an implication (the implication of a term in a contract) must in all cases be founded on the presumed intention of the parties and upon reason, and will only be made when it is necessary in order to give the transaction that efficacy that both parties must have intended it to have, and to prevent such a failure of consideration as could not have been within the contemplation of the parties."

In my opinion the fact relied upon is not sufficient to justify such an implication as that for which the company contended. The correspondence reserved to the company all rights it was asserting in the litigation then pending and it operated similarly in the case of the Trust. The new arrangement between the parties for the changeover of meters was complete and effective without implying the term urged in the argument for the company. It would seem that the introduction of a lower tariff than that which had been disputed by the company would account for its co-operation manifested by its letters.

In the judgment of the Court given in the previous case reference is made, at p. 73 of the report, to s. 25 (2) of the Prices Act. It is apparent that the Court did not regard this sub-section as precluding the company from counterclaiming to recover back the excess which it paid over the lawful maximum. The company sues in the present case on the basis that any amount which was paid after 1st November 1954 in excess of the lawful maximum is recoverable as money had and received. The company relies on the principle stated by Lord Mansfield in Browning v. Morris [1] : "But, where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men; the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there, the parties are not in pari delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract. For instance, by the Statute of Usury, taking more than five per cent is declared illegal, and the contract void; but these statutes were made to protect needy and necessitous persons from the oppression of usurers and moneyed men, who are eager to take advantage of the distress of others; whilst they, on the other hand, from the pressure of their distress, are ready to come into any terms, and, with their eyes open, not only break the law, but complete their ruin. Therefore, the party injured may bring an action for the excess of interest."

(1778) 2 Cowp. 790, at p. 793 [98 E.R. 1364, at pp. 1364, 1365].

The Trust breached s. 25 of the Prices Act by supplying electricity at a rate higher than the legal maximum and the company may have breached s. 31 by paying the Trust's accounts for electricity supplied from 1st November 1954 and subsequently. It is a question whether, in those circumstances, they were not pari delicto. But both were equally in good faith. In any case it is not reasonable to compare the company with a necessitous person or the Trust with a usurious person of the type to which Lord Mansfield refers. The Trust is by s. 15 of the Act by which it is incorporated an instrumentality of the Crown. By sub-s. (2) of s. 15 the Trust is directed to administer the Act in such manner as in its discretion it deems to be in the best interests of the general public. Lord Ellenborough C.J. said in Smith v. Cuff [2] : "This is not a case of par delictum: it is oppression on one side, and submission on the other: it never can be predicated as par delictum, when one holds the rod, and the other bows to it." Such a principle clearly does not apply as between the Trust and consumers of electricity. The Prices Act was passed to enable the public to have goods and services at rates considered reasonable by the Minister in charge of its administration. In my opinion the present case is not within the principle enunciated by Lord Mansfield in Browning v. Morris [1] .

(1817) 6 M. & S. 160, at p. 165 [105 E.R. 1203, at p. 1205]. 2. (1778) 2 Cowp. 790 [98 E.R. 1364].

As regards the counterclaim I think that the judgment that it be allowed is right, also the order made with respect to the counterclaim.

In my opinion the judgment of the learned Chief Justice is right and the appeal should be dismissed with costs.

The facts of this case being fully stated in the judgment of my brother Owen, I shall not go over them again. I agree that there is no ground for the appellant's contention that from the correspondence between the parties there can be extracted or inferred a promise by the respondent to refund to the appellant any excess of the payments it should make over the amounts payable according to the 1951 scale of charges. The fair meaning of the agreement between the parties that payments of future accounts by the appellant should not be taken as accepting the correctness either of those accounts or of any previously disputed accounts is simply that the payments should be without prejudice to the contentions which the appellant was advancing in the pending litigation. It was for the appellant to make the intention reasonably clear if it wished the respondent to be bound to refund any overpayments, and the language which it used and the respondent repeated was plainly not apt for that purpose.

I agree also that no promise by the respondent to make a refund in the event that has happened can be implied from the facts as a whole. Indeed the conduct of the appellant in relation to the removal of the meters makes any such implication impossible.

The appellant's principal contention was that it can recover the amount of its overpayments as money had and received by the respondent to the appellant's use, and I wish to say a little about that. All the payments were voluntarily made, and in order to succeed in recovering them as having been made illegally the appellant would have to make good its contention that it was not in pari delicto with the respondent. The contention must be upheld or rejected according as the appellant is or is not a member of a class of persons for whose protection the prohibition in the Prices Act, 1948-1951 S.A. is enacted: Kearley v. Thomson [1] . If it is a member of such a class, it is entitled to succeed, in my opinion, whether or not the statute actually contemplates the recovery in a civil action; for I must respectfully dissent from the opinion of Denning L.J. in Green v. Portsmouth Stadium Ltd. [2] , which I venture to think proceeded on a misunderstanding of Lord Mansfield's expression "in furtherance of these statutes" in Browning v. Morris [3] .

(1890) 24 Q.B.D. 742, at p. 746. 2. [1953] 2 Q.B. 190, at p. 196. 3. (1778) 2 Cowp. 790, at p. 792 [98 E.R., at p. 1364].

The appellant relies for this purpose upon the judgment of the Privy Council in Kiriri Cotton Co. Ltd. v. Dewani [4] . That, however, was a case of payment of rent in excess of what was permitted by certain rent restriction legislation; and it seems to me that in that fact there is to be found a crucial distinction between the Privy Council case and the present. The Prices Act is directed to the regulation of prices generally, and for that reason is to be contrasted with legislation which is directed only to the regulation of amounts payable in respect of a particular kind of transaction. Legislation of the latter class shows by its very particularity that the intention is to deal with a mischief to which transactions of the kind to which it relates are specially open. Thus the operation of rent restriction legislation is to prevent the owners of premises from profiting by the position of advantage which in the nature of things they enjoy over would-be tenants in bargaining about rent at a time when there is a shortage of housing or other forms of accommodation. That is why legislation of that character can be recognized on its face as enacted for the protection of one class of persons against another. But a general Prices Act, operating in respect of land, goods and services which are not certain or even likely all to be simultaneously in short supply, shows on its face the purpose of preventing or curbing a decline in the value of money. It is that value which is the subject of its protection, not purchasers. Indeed the restraints it imposes upon purchasers are as germane to its purpose as the restraints it imposes upon vendors: both vendor and purchaser are forbidden to contribute to the upward pressure on prices generally in the community by giving or receiving more than the amounts fixed in respect of their particular transaction or the class to which their transaction belongs. A vendor and a purchaser are therefore to be held in pari delicto if the one charges and the other pays more than the amount fixed under the Act.

A further contention on the part of the appellant was that the Prices Act itself, on its true construction, gives a person who pays a prohibited price a right to recover the excess over the price that is fixed under the Act. It is enough to say that the Act may be searched in vain for an indication of an intention to deal with the subject of recovering moneys paid in excess of fixed prices save in a court which imposes a penalty for the breach: see s. 25 (2) and contrast s. 41 which deals with the special case of a payment in excess of a price consented to under the Act in respect of a land transaction.

Finally it was said, though faintly, that the overpayments in question were made under some sort of pressure making the payment involuntary. In fact there was no pressure, no threat, no use of a dominant position. The case seems to me as clear a case as one could have of a payment made with full knowledge that the demand for it might be proved excessive, and yet made with no agreement or other attendant circumstance making the respondent's retention of the full amount unjust or inequitable.

At all relevant times the appellant company was a consumer of electricity supplied to it by the respondent Trust. In May 1951 the South Australian Prices Commissioner issued an order under the Prices Act, 1948-1951, fixing the maximum rates at which electricity might be supplied. It fixed different rates for current supplied for light and for current supplied for power and separate meters were installed on the company's premises to record the consumption for each of these purposes. From May 1951 until January 1952 the company paid the Trust for current supplied at the rates fixed by the order. In January 1952 the Prices Commissioner purported to make another order under the Act increasing the maximum rates that might be charged as from 1st February 1952, and from then until December 1952 monthly accounts calculated on the rates thus fixed were rendered to the company and accepted and paid by it. In January 1953, however, the company questioned the right of the Trust to charge at these rates and stated that it intended to pay for current supplied in the future at the rates in force prior to the date of the order, that is to say at the 1951 rates. The monthly accounts rendered to it by the Trust from January 1953 until October 1954 were calculated at the rates specified in the 1952 order but the company paid only the amounts which would have been payable prior to its issue. In April 1953 the Trust sued the company in the Supreme Court of South Australia to recover the balance alleged to be owing up to that date and the company pleaded that the prices order of January 1952 was invalid. By way of counterclaim it sought to recover so much of the moneys paid by it to the Trust between March and December 1952 as exceeded the rates chargeable under the prices order of 1951. The action ultimately came on to be heard and in July 1957 judgment was given in favour of the Trust on the claim and counterclaim. An appeal was brought to this Court and in October 1957 it was allowed in so far as it related to the claim by the Trust, but was dismissed in so far as it related to the counterclaim (South Australian Cold Stores Ltd. v. Electricity Trust of South Australia [1] ). The Court held that the prices order of January 1952 was ineffective since in promulgating it there had been a failure to comply with certain requirements of a more or less formal nature laid down by the Prices Act. So far as the company's counterclaim was concerned, the Court held that it failed for reasons expressed in the judgment but which are not relevant for present purposes. In November 1954 and while this litigation was still proceeding the Trust, without reference to the Prices Commissioner, issued a new schedule of maximum charges. The rates set by it were lower than those contained in the 1952 order but in excess of those set out in the 1951 order. The new schedule was issued by the Trust in the belief that the 1952 order had lawfully fixed the maximum rates that might be charged and that it was therefore permissible to charge at lower rates and it was not until the judgment of this Court was delivered in October 1957 that it became apparent that that order was invalid. The rates thus promulgated in 1954 did not provide separate and differing charges for current supplied for light and for that supplied for power but applied the power rate set by the 1952 prices order as the rate payable for all current supplied, that charge being lower than that previously charged for current used for lighting purposes. This would result in the total cost of electricity to the company being less than that chargeable under the rates contained in the 1952 order and the Trust would be advantaged since it would no longer be necessary for it to provide two sets of meters and keep two sets of records and accounts, one relating to power consumed for light, the other to the consumption for power purposes. The Trust knew, however, that the company had been and was still taking its own readings of the meters installed at its premises in order to ascertain what would be its liability if the 1952 prices order was invalid and the relevant rates were those set by the order of 1951, and in these circumstances it took what seems to me to have been a very proper course. Its solicitors wrote to the company on 18th February 1955 inquiring whether it contended that the 1954 rate was invalid and whether it had "any wishes" with regard to the proposed changeover from two separate sets of meters to one set recording all current used and not discriminating between current used for light and current used for power. The letter pointed out the advantages of changing to the new system of metering and went on to say: " In favour of retaining the present metering: From the Trust's point of view this is not desired: from the point of view of your company this would only be desirable if you wished to continue (i.e. presumably until the present litigation is concluded) making calculations based on the present metering." The letter stated also that it was written without prejudice to the contentions of the parties in the litigation then in progress. On 22nd February 1955 the solicitors for the Trust wrote a further letter to the company in which they pointed out that the letter of 18th February had been written for the purpose, amongst others, "of ensuring that no action of the Trust (such as the removal of meters) should be taken which might prevent your company from making calculations desired by it pending determination of the questions raised by the litigation without first giving your company an opportunity of expressing its wishes in the matter". In reply, the company expressed its appreciation of the Trust's desire "not to alter any metering which would put us in the position of not being able to continue the computation of the figures which we have hitherto been doing. We are however agreeable to change over to single metering and pay the accounts as rendered, provided any amount so paid is not taken as an acceptance by us of the correctness either of the account or any of the accounts which we have previously disputed." The solicitors for the Trust replied that steps would be taken to change the metering system and agreed that any payments of accounts rendered as the result of the change would not be regarded as an acceptance by the company of the correctness of the accounts so paid or of the accounts previously disputed. The change in the method of metering was then made. This meant, as both parties knew, that thereafter the company would be unable to calculate with accuracy what amounts it would be liable to pay if it proved to be correct in its contention that the only valid rates were those fixed in 1951. It would be able only to make an estimate of its liability under those rates by taking the proportions of current used by it for power and for lighting respectively for some period prior to the introduction of the single meter system and applying those proportions to the total current used as disclosed by the single meter. Thereafter and until October 1957 current supplied to the company was paid for by it at the 1954 rates but during that period it recorded its estimates of the amounts that would have been payable by it on the basis of the rates fixed in 1951, these estimates being arrived at by the method described earlier.

In the light of the earlier judgment of this Court holding that the 1952 prices order was invalid, it is not now disputed that the rates fixed in 1954 exceeded those which might lawfully have been charged and the question that arises is whether the company is entitled to recover payments made by it in excess of the rates fixed in 1951. Napier C.J., who heard the present action in the Supreme Court, was of opinion that it could not do so and gave judgment for the Trust on the company's claim and for the Trust on a counterclaim made by it to recover the price of current supplied to the company during October 1957 for which the company had made no payment. The judgment on the counterclaim was for such amount as might be agreed upon by the parties or, in default of agreement, such amount as might be "found on inquiry to be owing on a quantum meruit ".

The appellant's case was put in several ways. First it was contended that the letters to which I have referred earlier disclosed an implied agreement between the parties that the company should pay the Trust's accounts as rendered from time to time and that in so far as those payments exceeded the amount for which the company was ultimately held to be liable, the Trust would repay the amount of the excess. This submission was rejected by the learned Chief Justice in the Supreme Court and, in my opinion, rightly so. The company was certainly insisting that payments made by it of the accounts rendered by the Trust would be made without prejudice to its right to claim that the payments exceeded the charges which might lawfully be made and the Trust accepted this position, but I cannot find any implied promise by the latter to repay any excess charges which might ultimately be found to have been made. What it had done was to offer the company the opportunity of retaining the separate metering system if it so desired so that it might continue to calculate with accuracy the amounts payable under the 1951 rates or, if it wished to do so, to change to the new metering system which would record only the total amount of current supplied, whether for light or power. The company agreed to the change and thereby, to the knowledge of both parties, ceased to be able to calculate what would have been payable by it at the 1951 rates. At best it could only make an estimate of the amounts so payable and the fact that it agreed to the change of the metering system points strongly against the implication of a promise by the Trust to accept those estimates as accurate and repay any payments made in excess of those estimates should the 1952 order and consequently the 1954 order be found to have been ineffective.

Next, counsel for the appellant submitted that the case was one for the application of the rule which was stated by Lord Mansfield in Browning v. Morris [1] in these words: "Where the contract is executed and the money paid in pari delicto, this rule" (i.e. the maxim " In pari delicto potior est conditio defendentis ") "certainly holds: and the party who has paid it cannot recover it back But, where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men, the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there the parties are not in pari delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract" [2] . This principle has of course been since applied in many cases, one of the most recent being Kiriri Cotton Co. Ltd. v. Dewani [3] , where a tenant had paid a landlord a premium for the lease of premises contrary to the provisions of a rent restriction ordinance. The ordinance, it should be added, provided no remedy which would enable the tenant in such a case to recover the payment from the landlord. Before us counsel for the appellant submitted that the present case fell within this principle. The Prices Act was, he said, passed for the protection of purchasers of land, goods and services; the company was one of that class of persons; it was therefore a case of oppressor and oppressed and his client was entitled to maintain an action to recover the amounts overpaid. I do not agree. The Prices Act was passed for the protection of the community as a whole against the mischiefs of inflation and the community is not a "class" or "set" of men within the meaning of the rule. But there is, in my opinion, a further answer to the argument and it is to be found on an examination of the Act itself. Section 25 (1) forbids the sale of declared goods and the supply of declared services at a greater price or higher rate than that fixed under the Act and s. 31 forbids persons knowingly to pay or offer to pay for any declared goods or declared services a greater price or rate than that fixed under the Act. Under s. 50, any person who commits a breach of the Act is guilty of an offence and liable to a penalty. It is plain that there might be many cases in which a person who bought goods or accepted services at a price or rate in excess of that fixed under the Act would be no less blameworthy than the seller of the goods or the supplier of the services. In such cases, the common law would provide no remedy, as Devlin J. (as he then was) pointed out in Gray v. Southouse [1] . The parties would be in pari delicto. It may well be that it was for this reason that the Act contains two sections enabling the recovery, in certain circumstances, of payments made in excess of those permitted by law. Section 25 (2) provides that "In addition to any other penalty which may be imposed for a breach of subsection (1) of this section the court may order the defendant to refund to the purchaser the difference between the maximum price or rate fixed by or pursuant to this Act and the price or rate at which the goods or services were sold or supplied; and the like proceedings may be taken upon any such order as if it had been an order of the court in favour of the purchaser." And s. 41 is in these terms: "(1) Where consent has been given under this Act to any land transaction or proposed land transaction and the person from whom the land option or lease is to be or has been purchased taken or otherwise acquired accepts or has accepted in respect of the transaction or proposed transaction any consideration in excess of the consideration provided for in the terms of the transaction or proposed transaction as so consented to, the person who has paid or given the excess consideration may, notwithstanding that he is or may be concerned in a contravention of this Act in relation to the transaction, but subject to the next succeeding subsection, recover the amount or value of the excess consideration as a debt from the person to whom it was so paid or given, by action in any court of competent jurisdiction. (2) The court in which any such action is brought may, if in its discretion it considers that the circumstances of the case so warrant refuse to give judgment for the plaintiff, or give judgment for the plaintiff in respect of part only of the amount or value of the excess consideration." I think the word "may" in s. 25 (2) is intended to confer a discretion upon the court notwithstanding the fact that its language differs markedly from that used in s. 41 which is plainly permissive. The word "may" prima facie confers a discretion, a power to do or refrain from doing some act. It is true, as was pointed out in Julius v. Lord Bishop of Oxford [1] , that - and I use the words of Cairns L.C. in that case - "there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so" [2] . But - and again I quote the Lord Chancellor - "It lies upon those who contend that an obligation exists to exercise this power, to show in the circumstances of the case something which, according to the principles I have mentioned, creates this obligation" [3] . Bearing in mind the purpose for which the Prices Act was passed, the provisions which make it an offence for a purchaser knowingly to participate in a transaction made illegal by the Act, and the maxim of the common law which is expressed by the phrase in pari delicto, potior est conditio defendentis, I am of opinion that s. 25 (2) confers a discretionary power.

(1778) 2 Cowp. 790 [98 E.R. 1364]. 2. (1778) 2 Cowp., at p. 792 [98 E.R., at p. 1364]. 3. [1960] A.C. 192. 4. [1949] 2 All E.R. 1019. 5. (1880) 5 App. Cas. 214. 6. (1880) 5 App. Cas., at pp. 222-223. 7. (1880) 5 App. Cas., at p. 223.

The position then is that the Act itself contains two provisions expressly providing remedies in cases in which payments are made in excess of those allowed by law and in such cases it is left to the discretion of the court before which the matter comes to decide whether or not an order for repayment should be made. The existence of these provisions and the fact that they confer discretionary powers seem to me to point conclusively to a legislative intention to exclude the existence of any remedy at common law.

For these reasons I agree with the conclusion to which the learned Chief Justice came and I would dismiss the appeal.

At a glance

Court

Decision date

Before

Source

Judgment (31 paragraphs)

Parties