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United Kingdom House of Lords Decisions
You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Taff Vale Railway Co v Amalgamated Society of Railway Servants  UKHL 1 (22 July 1901)
Cite as:  UKHL 1,  AC 426
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HOUSE OF LORDS
HOUSE OF LORDS
|THE TAFF VALE RAILWAY COMPANY
|- v -
|THE AMALGAMATED SOCIETY OF
Now it is undoubtedly true that a trade union is neither a corporation, nor an individual, nor a partnership between a number of individuals; but this does not by any means conclude the case. A trade union, as defined by s. 16 of the Trade Union Act, 1876, "means any combination, whether temporary or permanent, for regulating the relations between workmen and masters, or between workmen and workmen, or between masters and masters, or for imposing restrictive conditions on the conduct of any trade or business, whether such combination would or would not, if the principal Act had not been passed, have been deemed to have been an unlawful combination by reason of some one or more of its purposes being in restraint of trade." It is an association of men which almost invariably owes its legal validity to the Trade Union Acts, 1871 and 1876. In the present case the foundation of the argument that I have heard on behalf of the society is that it is an illegal association - an argument that would have more weight if the action related to the enforcement of any contract, and were not an action in tort. The questions that I have to consider are what, according to the true construction of the Trade Union Acts, has the Legislature enabled the trade unions to do, and what, if any, liability does a trade union incur for wrongs done to others in the exercise of its authorized powers? The Acts commence by legalising the usual trade union contracts, and proceed to establish a registry of trade unions, give to each trade union an exclusive right to the name in which it is registered, authorize it through the medium of trustees to own a limited amount of real estate, and unlimited personal estate "for the use and benefit of such trade union and the members thereof"; provide that it shall have officers and treasurers, and render them liable to account; require that annual returns be made to the registry of the assets and liabilities and receipts and expenditure of the society; provide that it shall have rules and a registered office, imposing a penalty on the trade union for non-compliance; and permit it to amalgamate with other trade unions, and to be wound up. The funds of the society are appropriated to the purposes of the society, and their misappropriation can be restrained by injunction: Wolfe v. Matthews(1); and on a winding-up, such funds are distributed amongst the members in accordance with the rules of the society: Strick v. Swansea Tinplate Co.(2) Further, the Act of 1871 contains a schedule of matters which must be provided for by the rules. The object and the limitations of the Acts are stated by Sir George Jessel in Rigby v. Connol(3) as follows: "That Act, no doubt, was passed primarily with a view to preventing the treasurers and secretaries and officers of these societies from robbing them; that was the chief object. It was discovered that some of these men, abusing the confidence reposed in them, took advantage of the law which made these societies illegal, by appropriating their funds and property to their own use. That, no doubt, was one of the principal objects, and therefore the Act was passed to get at these men. Another object was this: there was a great difficulty in suing and getting their property from third persons, and one object of the Act was to enable these societies to sue in respect of their property, and also to enable them to hold property, such as a house or office, but it was not intended that the contracts entered into by the members of the society should be made legal contracts inter se, so that Courts of justice should interfere to enforce them. If that had been intended, the result would
have been this, that an agreement between a number of workmen once entered into, compelling them to work in a particular manner, or to abstain from working in a particular manner, would have been enforceable according to law, and to a certain extent would have reduced some portion of the workmen to a condition of something like serfdom and slavery. Of course the Legislature, by interfering, had no idea of doing anything of that sort." But these limitations merely restrict the actual enforcement of trade union contracts by action or suit, and do not affect the question of the status of the association to which such members belong. Now, although a corporation and an individual or individuals may be the only entity known to the common law who can sue or be sued, it is competent to the Legislature to give to an association of individuals which is neither a corporation nor a partnership nor an individual a capacity for owning property and acting by agents, and such capacity in the absence of express enactment to the contrary involves the necessary correlative of liability to the extent of such property for the acts and defaults of such agents. It is beside the mark to say of such an association that it is unknown to the common law. The Legislature has legalised it, and it must be dealt with by the Courts according to the intention of the Legislature. For instance, a lease in perpetuity is unknown at common law, but such a lease granted by one railway company to another when confirmed by the Legislature becomes valid and binding (see Sir George Jessel's judgment in Sevenoaks, & c., Ry. Co. v. London, Chatham and Dover Ry. Co.(1)); nor can it be said for this purpose that the association is illegal, for the Legislature by ss. 2 and 3 of the Act of 1871 has rendered legal the usual purposes of a trade union, and has further enabled the trade union to carry into effect those purposes by the provisions to which I have already referred. This is not a case of suing in contract to which the provisions of s. 4 of the Act would apply; it is an action in tort, and the real question is whether on the true construction of the Trade Union Acts the Legislature has legalised an association which can own property and
can act by agents by intervening in labour disputes between employers and employed, but which cannot be sued in tort in respect of such acts.
Now, the Legislature in giving a trade union the capacity to own property and the capacity to act by agents has, without incorporating it, given it two of the essential qualities of a corporation - essential, I mean, in respect of liability for tort, for a corporation can only act by its agents, and can only be made to pay by means of its property. The principle on which corporations have been held liable in respect of wrongs committed by its servants or agents in the course of their service and for the benefit of the employer - qui sentit commodum sentire debet et onus - (see Mersey Docks Trustees v. Gibbs(1)) is as applicable to the case of a trade union as to that of a corporation. If the contention of the defendant society were well founded, the Legislature has authorized 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 may do to other persons by the use of that wealth and the employment of those agents. They would be at liberty (I do not at all suggest that the defendant society would so act) to disseminate libels broadcast, or to hire men to reproduce the rattening methods that disgraced Sheffield thirty or forty years ago, and their victims would have nothing to look to for damages but the pockets of the individuals, usually men of small means, who acted as their agents. That this is a consideration that may fairly be taken into account appears from the opinion of the judges given to the House of Lords in the Mersey Docks Case(2): "We cannot think that it was the intention of the Legislature to deprive a shipowner who pays dues to a wealthy trading company, such as the St. Catherine's Dock Company for instance, of all recourse against it, and to substitute the personal liability of a harbour-master, no doubt a respectable person in his way, but whose whole means, generally speaking, would not be equal to more than a very small percentage of the damages, when there are any." The proper rule of construction of statutes such as these is that in
the absence of express contrary intention the Legislature intends that the creature of the statute shall have the same duties, and that its funds shall be subject to the same liabilities as the general law would impose on a private individual doing the same thing. It would require very clear and express words of enactment to induce me to hold that the Legislature had in fact legalised the existence of such irresponsible bodies with such wide capacity for evil. Not only is there nothing in the Acts to lead me to such a conclusion, but ss. 15 and 16 of the Act of 1871 imposing penalties on the trade union, and ss. 8 and 15 of the Act of 1876 point to a contrary intention; nor do I see any reason for saying that the society cannot be sued in tort in their registered name. Sects. 8 and 9 of the Act of 1871 expressly provide for actions in respect of property being brought by and against the trustees, and this express intention impliedly excludes such trustees from being sued in tort. If therefore, I am right in concluding that the society are liable in tort, the action must be against them in their registered name. The acts complained of are the acts of the association. They are acts done by their agents in the course of the management and direction of a strike; the undertaking such management and direction is one of the main objects of the defendant society, and is perfectly lawful; but the society, in undertaking such management and direction, undertook also the responsibility for the manner in which the strike is carried out. The fact that no action could be brought at law or in equity to compel the society to interfere or refrain from interfering in the strike is immaterial; it is not a question of the rights of members of the society, but of the wrong done to persons outside the society. For such wrongs, arising as they do from the wrongful conduct of the agents of the society in the course of managing a strike which is a lawful object of the society, the defendant society is, in my opinion, liable.
I have come to this conclusion on principle, and on the construction of the Acts, and there is nothing to the contrary in any of the cases cited by the defendants' counsel. They were all cases relating to the limitation of the right of enforcing contracts to which I have already referred. It is true that in Lyons v. Wilkins(1) the name of the trade union was struck out as a defendant by Byrne J.; but I have been supplied with a copy of the shorthand notes of this case, and I find that the point was not argued, the plaintiffs' counsel not thinking it worth while to contest it; and, on the other hand, although the Court of Appeal in Trollope v. London Building Trades Federation(2) affirmed an injunction restraining libel by a trade union, I find that the trade union entered no appearance, and that the injunction went against them before Kekewich J. in default of appearance, and his order was affirmed, nothing being said about the society. The cases having the nearest analogy to the present are those like Ruck v. Williams(3) and Whitehouse v. Fellowes(4), where unincorporated improvement commissioners and the trustees of a turnpike-road respectively, sued under their respective Acts in the name of their clerk, were held liable in tort. I accordingly dismiss the society's summons with costs.
I have now to consider the question whether an injunction should be granted against the society in addition to that granted last week against Messrs. Bell and Holmes, and I am of opinion that it should. The objects of the society comprise promoting the settlement of disputes between masters and men by arbitration, or, failing that, by other lawful means, and of course a strike is perfectly lawful: the general management of the society is vested in an executive committee, with power to represent the members in disputes about hours and wages; a protection fund is set apart out of the funds of the society for the more effectual protection of the labour and rights of members and for the better carrying on of any movement having that end in view, and in pursuance of its objects and powers. The society by their letter of August 20, signed by the defendant Bell, informed the plaintiffs that they had decided to support the men in their action, and had instructed Bell to take charge of the movement with a view of bringing it to a conclusion, and that all further negotiations were to be
dealt with through him. The defendant Bell was the general secretary and the defendant Holmes was the local organising secretary of the society; they, as agents for the society, and on their instructions and for their benefit, put themselves in charge of the strike, and on the evidence that was read last week illegally watched and beset men to prevent them from working for the company, and illegally ordered men to break their contracts. I have already held that the society are liable for the acts of their agents to the same extent that they would be if they were a corporation, and it is abundantly clear that a corporation under the circumstances of this case would be liable. See, for example, Ranger v. Great Western Ry. Co.(1),where Lord Cranworth points out that, although a corporation cannot in strictness be guilty of fraud, there can be no doubt that if its agents act fraudulently, so that if they had been acting for private employers the persons for whom they were acting would have been affected by their fraud, the same principles must prevail where the principal under whom the agent acts is a corporation. It is not a question of acting ultra vires, as in Chapleo v. Brunswick Permanent Building Society(2), but of improper acts in the carrying out of the lawful purposes of the society. In such cases the principal, whether an individual or a corporation, or a body like turnpike trustees, is answerable for every such wrong of the servant or agent as is committed in the course of the service and for the master's benefit, though no express command or privity of the master be proved. Granted that the principal has not authorized the particular act, but he has put the agent in his place to do that class of acts, and he is answerable for the manner in which the agent has conducted himself in doing the business with which the principal has entrusted him: see Barwick v. English Joint Stock Bank in the Exchequer Chamber.(3)Therefore, if it is any longer necessary to grant an injunction, I grant an injunction against the defendant society in the same form as that granted last week against the other defendants.
The House took time for consideration.
My Lords, in this case
I am content to adopt the judgment of Farwell J., with which
I entirely concur; and I cannot find any satisfactory answer to
that judgment in the judgment of the Court of Appeal which
overruled it. If the Legislature has created a thing which can
own property, which can employ servants, and which can
inflict injury, it must be taken, I think, to have impliedly given
the power to make it suable in a Court of Law for injuries
purposely done by its authority and procurement.
I move your Lordships that the judgment of the Court of Appeal be reversed and that of Farwell J. restored.
Although I should be well content to adopt the judgment of Farwell J. and the reasons he has given, I will venture to add a few words of my own, partly out of respect for the Master of the Rolls, from whose opinion I never dissent without the
greatest hesitation, and partly in deference to the argument of counsel, which, before your Lordships, has ranged over a wider field, and on the part of the respondents has, I think, assumed a somewhat bolder tone than in the Court below.
The case divides itself into two questions. One may be described as a question of substance; the other is rather a question of form.
Parliament has legalised trade unions, whether registered or not; if registered, they enjoy certain advantages. The respondent society is a registered trade union. Subject to such control as an annual general meeting can exercise, the government of the society is in the hands of its executive committee, a small body with vast powers, including an unlimited power of disposition over the funds of the union, except so far as it may be interfered with by the annual general meeting, or restricted by the operation of the society's rules, of which, in case of doubt, the executive committee is the sole authorized interpreter. Mr. Haldane pointed out, what is true enough, that the funds of the society were contributed for benefit purposes as well as for trade purposes, and warned your Lordships that, if those funds were made answerable for the consequences of such acts as are complained of in the present case, the widow and the orphan might suffer. At first sight that seems a strong point, but the truth is that all the moneys of the society, for whatever purpose they may be collected, form a common fund. That, I believe, is the case with most, if not all, trade unions. If you take up the Report of the Royal Commission on Trade Unions, and turn to the statement accompanying the Minority Report to which Mr. Haldane referred, you will see that there was nothing on which the advocates of trade unions insisted more strongly than on the right of unions to employ the whole of their funds if they chose for the purposes of strikes and in connection therewith. "At present," say the authors of that statement, "the strength of the union, and the confidence of its members, simply consists in this, that it can, if so disposed, employ the whole of its funds in the support of the trade ends."(1) An enforced separation of the funds of the
union would be, they say, "arbitrary interference with the liberty of association" - it would "paralyze the efficiency of the institution." The suggestion of such a proposal was "tantamount to a proposal to suppress unionism by statute."
The substantial question, therefore, as Farwell J. put it, is this: Has the Legislature authorized the creation of numerous bodies of men capable of owning great wealth and of acting by agents with absolutely no responsibility for the wrongs they may do to other persons by the use of that wealth and the employment of those agents? In my opinion, Parliament has done nothing of the kind. I cannot find anything in the Acts of 1871 and 1876, or either of them, from beginning to end, to warrant or suggest such a notion. It is perhaps satisfactory to find that nothing of the sort was contemplated by the minority of the members of the Royal Commission on Trade Unions, whose views found acceptance with the Legislature. In paragraph 4 of their report they say: "It should be specially provided that except so far as combinations are thereby exempted from criminal prosecution nothing should affect .... the liability of every person to be sued at law or in equity in respect of any damage which may have been occasioned to any other person through the act or default of the person so sued."(1) Now, if the liability of every person in this respect was to be preserved, it would seem to follow that it was intended by the strongest advocates of trade unionism that persons should be liable for concerted as well as for individual action; and for this purpose it seems to me that it cannot matter in the least whether the persons acting in concert be combined together in a trade union, or collected and united under any other form of association.
Then, if trade unions are not above the law, the only remaining question, as it seems to me, is one of form. How are these bodies to be sued? I have no doubt whatever that a trade union, whether registered or unregistered, may be sued in a representative action if the persons selected as defendants be persons who, from their position, may be taken fairly to represent the body. As regards this point, Mr. Haldane relied on
the case of Temperton v. Russell(1); but Temperton v. Russell(1), as I said in Duke of Bedford v. Ellis(2), was an absurd case. The persons there selected as representatives of the various unions intended to be sued were selected in defiance of all rule and principle. They were not the managers of the union - they had no control over it or over its funds. They represented nobody but themselves. Their names seem to have been taken at random for the purpose, I suppose, of spreading a general sense of insecurity among the unions who ought to have been sued, if sued at all, either in their registered name, if that be permissible, or by their proper officers - the members of their executive committees and their trustees.
Mr. Haldane, indeed, was bold enough to say that if a wrong was committed by a body of persons, acting in concert, who were too numerous to be made defendants in an action, the person injured would be without remedy, unless he could fasten upon the individuals who with their own hands were actually doing the wrong. Then he was asked, what would he say to such a case as this: Suppose there were a manufactory belonging to a co-operative society, unregistered, and composed of a great number of persons (as there well might be, but for the provision in the Companies Act making illegal an unregistered trading society consisting of more than twenty members), and suppose such a manufactory were poisoning a stream or fouling the atmosphere to the injury of its neighbours, might it do so with impunity? Mr. Haldane said Yes, you must pounce upon the individual offenders. It seems to me that this is a reduction to absurdity. I should be sorry to think that the law was so powerless; and therefore it seems to me that there would be no difficulty in suing a trade union in a proper case if it be sued in a representative action by persons who fairly and properly represent it.
The further question remains: May a registered trade union be sued in and by its registered name? For my part, I cannot see any difficulty in the way of such a suit. It is quite true that a registered trade union is not a corporation, but it has a registered name and a registered office. The registered name is
nothing more than a collective name for all the members. The registered office is the place where it carries on business. A partnership firm which is not a corporation, nor, I suppose, a legal entity, may now be sued in the firm's name. And when, I find that the Act of Parliament actually provides for a registered trade union being sued in certain cases for penalties by its registered name, as a trade union, and does not say that the cases specified are the only cases in which it may be so sued, I can see nothing contrary to principle, or contrary to the provisions of the Trade Union Acts, in holding that a trade union may be sued by its registered name.
I am, therefore, of opinion that the appeal should be allowed and the judgment of Farwell J. restored with costs, here and below.
My noble and learned friend Lord Shand, who is unable to be present this morning, has asked me to read the following judgment.
The admirable judgment of Farwell J., in whose reasoning I entirely agree, makes it unnecessary again to go over the provisions of the statutes of 1871 and 1876, particularly after what has been said by your Lordships. I shall only add a few words in regard to the judgment of the Court of Appeal. It is true, as repeatedly stated both by Farwell J. and by the Master of the Rolls, that by neither of the statutes are trade unions, although registered, declared to be incorporations, which would as a consequence give them a right to sue and render them liable to be sued in the society's name. It is equally true, as the Master of the Rolls observes, that the right to sue and liability to be sued may be conferred by statute either expressly or by implication. In the words of the learned Master of the Rolls, enactments "must be found either express or implied enabling this to be done." I agree in thinking there is no express enactment to that effect; but, with great deference, in my opinion, the power of suing and liability to be sued in the society's name is clearly and necessarily implied by the provisions of the statutes. If Farwell J. had not carefully gone over and pointed out these provisions in his judgment, I should have thought it right now to do so, but I content myself by referring to what he has so well said. A registered trade union has an exclusive right to the name in which it is registered, a right to hold a limited amount of real estate and unlimited personal estate for its own use and benefit and the benefit of its members, the power of acting by its agents and trustees, and is liable to be sued for penalties, as it appears to me, in the society's name. I am clearly of opinion that these and the provisions generally of the statutes imply a liability on the society to be sued in its trade union name, and a privilege of thus suing.
I am further of opinion that, as the society by its agents is alleged to have been violating the law as stated by the appellants and sworn in their affidavits, the appellants are entitled to an injunction not only against the agents, but against the society itself, for whom their servants and agents were acting.
The lawless acts alleged to have been committed, and the continuance of which was more than probable, were clearly wrongful acts which justified the Taff Vale Railway Company in seeking to have them restrained by those who caused them to be committed, and inasmuch as they were done by men acting as agents of the society in furtherance of a strike sanctioned and directed by its authorized officers, the society is responsible for them. Whether it is so responsible in and by its registered name is the only remaining question.
I see no reason why this question should not also be answered in the affirmative. I think that a legal entity was created under the Trade Union Act, 1871, by the registration of the society in its present name in the manner prescribed, and that the legal entity so created, though not perhaps in the strict sense a corporation, is nevertheless a newly created corporate body created by statute, distinct from the unincorporated trade union, consisting of many thousands of separate individuals, which no longer exists under any other name. The very omission from the statute of any provision authorizing and directing that it shall sue and be sued in any other name than that given to it by its registration appears to me to lead to no other reasonable conclusion than that in so creating it, it was intended by the Legislature that by that name and by no other it should be known, and that for all purposes that name should be used and applied to it in all legal proceedings unless there was any other provision which militated against such a construction, as, for instance, in the case of trustees, by s. 9 of the same Act, who hold real and personal property of the society. I may refer also to the effect of the rules with regard to the present registration. I find on page 91 of the Appendix that rule 7(3) provides that the funds of every branch shall be the common property of the society. That being so, I do not see how it would be possible for these funds to be made applicable for remuneration or recompense or redress for any wrongful act done by a body of men like the society unless the society can be sued in the way in which it is proposed to sue them, and as I think it may be.
For the reasons I have very shortly given, I am of opinion that the judgment of the Court of Appeal should be reversed, and the judgment of Farwell J. restored.
The principle on which the rule is based forbids its restriction to cases for which an exact precedent can be found in the reports. The principle is as applicable to new cases as to old, and ought to be applied to the exigencies of modern life as occasion requires. The rule itself has been embodied and made applicable to the various Divisions of the High Court by the Judicature Act, 1873, ss. 16 and 23-25, and Order XVI., r. 9; and the unfortunate observations made on that rule in Temperton v. Russell(3) have been happily corrected in this House in the Duke of Bedford v. Ellis(4) and in the course of the argument in the present case.
I have myself no doubt whatever that if the trade union could not be sued in this case in its registered name, some of its members (namely, its executive committee) could be sued on behalf of themselves and the other members of the society, and an injunction and judgment for damages could be obtained in a proper case in an action so framed. Further, it is in my opinion equally plain that if the trustees in whom the property of the society is legally vested were added as parties, an order could be made in the same action for the payment by them out of the funds of the society of all damages and costs for which the plaintiff might obtain judgment against the trade union.
I entirely repudiate the notion that the effect of the Trade Union Act, 1871, is to legalise trade unions and confer on them the right to acquire and hold property, and at the same time to protect the union from legal proceedings if their managers or agents acting for the whole body violate the rights of other
people. For such violation the property of trade unions can unquestionably in my opinion be reached by legal proceedings properly framed. The Court of Appeal has not denied this; but the Court has held that the trade union cannot be sued in its registered name, and in strictness the only question for determination by your Lordships now is whether the Court of Appeal was right in holding that the name of the trade union ought to be struck out of the writ, and that the injunction granted against the trade union in that name ought to be discharged.
If I am right in what I have already said, this question is of comparatively small importance: it is not a question of substance but of mere form, and turns on the Trade Union Act, 1871 (34 & 35 Vict. c. 31), and the Act of 1876 (39 & 40 Vict. c. 22) amending it. The Act does not in express terms say what use is to be made of the name under which the trade union is registered and by which it is known. But a trade union which is registered under the Act must have a name: see ss. 14, 16, and Sched. I.; it may acquire property, but, not being incorporated, recourse is had to the old well-known machinery of trustees for acquiring and holding such property, and for suing and being sued in respect of it (ss. 7, 8, 9). The property so held is, however, the property of the union: the union is the beneficial owner. Sect. 12 provides summary remedies for misapplications of the trade union's property, but there is nothing here to oust the jurisdiction of the superior Courts, and, there being nothing in the Act to prevent it, I cannot conceive why an action in the name of the trade union, against its trustees to restrain a breach of trust or to make them account for a breach of trust already committed should be held unmaintainable or wrong in point of form. Further, ss. 15 and 16 of the Act of 1871, and s. 15 of the Act of 1876, impose duties on registered trade unions and penalties on them (and not only on their officials) for breach of those duties. The mode of enforcing these penalties is pointed out in s. 19 of the Act of 1871, but there is nothing there to shew that the trade union on which the duty is cast and which has to pay the penalty could not be proceeded against in its registered name. Again, I apprehend that a mandamus could go against a trade union to compel it to perform the duties cast upon it by statute; and here again the obvious course would be to proceed against the union by its registered name unless there is something in the statute to prevent it. My Lords, a careful study of the Act leads me to the conclusion that the Court of Appeal held, and rightly held, that trade unions are not corporations; but the Court held further that, not being corporations, power to sue and be sued in their registered name must be conferred upon them; and further that the language of the statutes was not sufficient for the purpose. Upon this last point I differ from them. The Act appears to me to indicate with sufficient clearness that the registered name is one which may be used to denote the union as an unincorporated society in legal proceedings as well as for business and other purposes. The use of the name in legal proceedings imposes no duties and alters no rights: it is only a more convenient mode of proceeding than that which would have to be adopted if the name could not be used. I do not say that the use of the name is compulsory, but it is at least permissive.
Your Lordships have not now to consider how a judgment or order against a trade union in its registered name can be enforced. I see no difficulty about this; but, to avoid misconception, I will add that if a judgment or order in that form is for the payment of money it can, in my opinion, only be enforced against the property of the trade union, and that to reach such property it may be found necessary to sue the trustees.
I am of opinion that the orders of Farwell J. were right and should be restored.
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