Kirkwood v Gadd

[1910] A.C. 422

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(Judgment by: Lord Mersey)

Between: Kirkwood - Appellant
And: Gadd - Respondent

Court:

Judges: Lord Loreburn LC
Lord James of Hereford
Lord Atkinson
Lord Shaw of Dunfermline

Lord Mersey

Subject References:
MONEY-LENDER
Business carried on at other than Registered Address
Loan effected at Borrower's Residence
Illegality
Bill of Sale

Legislative References:
Money-lenders Act, 1900 (63 & 64 Vict. c. 51) - s. 2, sub-s. 1 (b)

Judgment date: 10 June 1910

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Judgment by:
Lord Mersey

My Lords, the facts of this case are as follows, The appellant, Kirkwood, is a money-lender. His place of business is at 30, Upper Brook Street, Ipswich, and his trade name or description is "The Provincial Union Bank." Both the name and the address are duly registered in accordance with the provisions of the Money-lenders Act, 1900. On February 11, 1908, a man named Dobson wrote a letter to Kirkwood, and sent it to his place of business at 30, Upper Brook Street, Ipswich. The letter enclosed an inventory of some furniture upon which the owner desired to raise a loan. The name of the proposed borrower was not given in this letter, but it was furnished by Dobson a few days later in a telegram, which was also sent to Kirkwood's place of business.

The telegram reads as follows: "Alfred Ernest Gadd, 59, Mayfair Avenue, Ilford, Insurance and Mortgage Broker." Having thus received the name and address of the proposed borrower, Kirkwood, by his manager, Herbert Sandoe, wrote to Gadd to say that one of the officials of the so-called bank would call on Gadd with reference to the application for a loan. On this some further correspondence took place between Sandoe and Gadd, the outcome of which was that Sandoe met Gadd at Gadd's house on February 20, and there and then arranged the terms on which Kirkwood should make the loan. Having arranged the terms of the loan, he proceeded to check the inventory of the furniture, and drew up a bill of sale which Gadd executed. It is sufficient to say of it that it describes the grantee as "the Provincial Union Bank, of 30, Upper Brook Street, Ipswich (of which said bank John Kirkwood, of the same place, is sole proprietor)," and that the attestation clause describes the document as having been executed by Gadd

"in the presence of me Herbert Sandoe, of 30, Upper Brook Street, Ipswich, manager of the Ipswich branch of the Provincial Union Bank, 30, Upper Brook Street, Ipswich."

Sandoe then paid the amount of the loan to Gadd and took a receipt. The correspondence so far as it consisted of letters written for or by Kirkwood was sent from and bore the address of the Provincial Union Bank, Ipswich, and it was to that place that Gadd sent the letters which he wrote. Dobson was paid a commission by Kirkwood in respect of the introduction of Gadd. This was the only transaction with Gadd, but it appeared that, although it was not usual to do so, the appellant had carried out transactions at the houses of borrowers on several other occasions. The instalments by which the debt was to be paid off fell into arrear, and on May 19, 1909, Kirkwood threatened to seize the furniture under the power contained in the bill of sale. Thereupon Gadd issued a writ claiming an injunction to restrain Kirkwood from seizing, and also claiming a declaration that the bill of sale was invalid. On the same day Gadd applied ex parte to the judge at chambers (Hamilton J.) for an interim injunction and used an affidavit in support. This affidavit contains the following statement:-

"The whole of the transaction was carried out and completed at my private address, 59, Mayfair Avenue, Ilford, the alleged bill of sale being executed there and the money paid over."

The learned judge refused to make any order.

Next day, May 20, 1909, the Court of Appeal granted leave to appeal, and on May 21 the appeal was heard. The facts as I have stated them were either admitted or proved to the satisfaction of the Court, and the Court thereupon found that the transaction was bad on the ground that it amounted to a carrying on of business by the money-lender elsewhere than at his registered address in contravention of s. 2 of the Money-lenders Act, 1900. The appeal was accordingly allowed, and the Court granted an interim injunction until the trial of the action upon the usual undertaking as to damages. It is from this decision that the present appeal is brought to your Lordships' House.

It is an appeal which raises a question of very serious importance to the appellant, for if the injunction be made perpetual on the grounds mentioned he will not only lose his remedy for the recovery of the money he has lent, but he will also be liable to conviction and fine for the offence that he has committed, and in the event of conviction will run the risk of imprisonment if he should be again convicted in respect of another similar offence.

The real question in the case is this: Do the facts afford any reasonable evidence that the appellant carried on business elsewhere than at his registered address? Not that he did business elsewhere, but that he carried on business elsewhere.

The words of s. 2 of the Act are as follows:

"A money-lender ....

(a)

shall register himself as a money-lender .... under his own or usual trade name, and in no other name, and with the address .... at which he carries on his business of moneylender, and

(b)

shall carry on the money-lending business in his registered name, and in no other name ....and at his registered address or addresses, and at no other address, and

(c)

shall not enter into any agreement in the course of his business as a money-lender, with respect to the advance and repayment of money, or take any security for money in the course of his business as a money-lender, otherwise than in his registered name."

The section further enacts that

"if a money-lender fails to register himself .... or carries on business otherwise than in his registered name .... or elsewhere than at his registered address, or fails to comply with any other requirement of this section, he shall be liable on conviction .... to a fine not exceeding one hundred pounds, and, in the case of a second or subsequent conviction, to imprisonment with or without hard labour for a term not exceeding three months."

Examining this section of the Act, it will be noted that while it prohibits the money-lender from carrying on the money-lending business otherwise than in his registered name, or elsewhere than at his registered address, it contemplates the possibility of the money-lender having to enter into transactions "in the course of his business as a money-lender"; and singling out two, namely, entering into an agreement with respect to the advance and repayment of money, and taking a security for money, it enacts that they shall not be entered into otherwise than in the money-lender's registered name. Not a word is said in this part of the section as to the registered address. It is apparently enough to satisfy the requirements of the Act that the transactions mentioned should be in the registered name. This, in my opinion, indicates that the carrying on of the business spoken of in the Act of Parliament is something quite different from the carrying out of the transactions which make up the business.

The carrying on must be at the registered address. The carrying out may be wherever convenient. What the moneylender did in the present case was to enter into an agreement "in the course of his business as a money-lender," with respect to the advance and repayment of money, and also to take a security for money "in the course of his business as a money-lender," and he did both in his registered name. He adhered to the spirit and to the very letter of the Act. It is true that he did more. He checked an inventory at the only place he could check it, namely, on the borrower's premises; and he handed over the amount of the loan there. And why should he not? The only words in the Act which can be invoked to shew that he might not are the words which forbid him to carry on his business elsewhere than at his registered address, or otherwise than in his registered name; but if these words are intended to have such an effect as that contended for, it is impossible to understand the necessity of the express provision as to agreements and securities. I think, too, that the interpretation which I give to the statute is the only one which is consistent with business. If "carrying on the business" is to be read as meaning the carrying out of the transactions which go to make up the business, then, unless the borrower can come to the money-lender's registered address, no business can be done. A bedridden man could not have recourse to a money-lender, for he would be physically incapable of going to the money-lender, and the money-lender could not lawfully come to him. This would be a result which the Legislature never intended.

But I prefer to put the matter on a broader ground. A man's business is carried on at the shop or office where he keeps his books, his stock, and his cash, and to which he, his servants or clerks resort, either to work or to receive directions as to their work. Some of the work may of necessity or for convenience be done away from the shop or office, but the business is none the less carried on at the office or shop. Take, for instance, the case of a butcher. He has his shop where he keeps the meat he sells. He sends his servant round in the morning to the houses of his customers to collect orders, and in the afternoon he delivers the meat in fulfilment of the orders. Could it be said that such a man carries on business elsewhere than at his shop? I think not.

Then I think the object with which this statute was passed is to be remembered. It was not passed either to hinder or to prevent money-lending as a business. It was passed merely to defeat the frauds and to correct the abuses which sometimes attend the business, and with that object in view it requires that the money-lender shall not trade under a changing name or at a shifting address. Gadd knew from the first with whom he was doing business and where the money-lender was to be found, and it was for his convenience that the transaction was carried out at his own address. It is also to be remembered that the statute is penal, and that if the injunction stands the money-lender becomes liable to a conviction and a fine. Nothing but plain and unambiguous language in the statute ought to be allowed to lead to such a result. I can find no such language. In my opinion the acts done by the money-lender in this case neither violated the spirit of the Act nor contravened its terms.

Order of the Court of Appeal reversed and order of Hamilton J. restored; the costs here and below to be costs in the cause.

Lords' Journals, June 10, 1910.

Solicitors: Windybank, Samuel & Lawrence; John K. Torkington.