Kirkwood v Gadd

[1910] A.C. 422

---

(Judgment by: Lord James of Hereford)

Between: Kirkwood - Appellant
And: Gadd - Respondent

Court:

Judges: Lord Loreburn LC

Lord James of HerefordLord 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

---

Judgment by:
Lord James of Hereford

My Lords, it is necessary in order to determine the question raised by this appeal that the facts controlling the case should be ascertained and stated.

In February, 1908, the appellant John Kirkwood was carrying on the business of a money-lender at Ipswich, and for the purpose of so doing had registered an address, "30, Upper Brook Street, Ipswich." On February 2, 1908, one Dobson, a commission agent, wrote to the appellant stating that the respondent required a loan of 100l., giving a bill of sale on his furniture as security. In this letter, which was sent to the above address, Dobson assumed that the appellant would send an agent to Ilford, where the respondent resided.

After some delay the transaction was carried out. The statement of what occurred is apparently correctly stated in the appellant's case as follows: "In due course the said Herbert Sandoe (appellant's agent) called upon the respondent at the residence of the respondent, No. 59, Mayfair Avenue, Ilford, in the county of Essex, and the terms of the proposed loan were then arranged between the said Sandoe and the respondent, and the said Sandoe, the appellant's agent, drew up the said bill of sale, which was executed by the respondent, and the said Sandoe advanced and paid to the respondent the sum of 100l., being the consideration for the said bill of sale."

The circumstances thus narrated occurred at Ilford, and the respondent's wife also there signed a declaration that she had no interest in the furniture assigned by the bill of sale.

In relation to payments under the bill of sale and other matters a very voluminous correspondence (set out in the appendix) took place. Throughout it the only address affecting the appellant was the registered Ipswich address.

Default was made in fulfilling the terms of the bill of sale whereupon the appellant took possession of the goods assigned by it.

Application was then made by the respondent to a learned judge (Hamilton J.) to restrain the appellant's proceedings on the ground that he had carried on business at an address other than the registered address, and that therefore the bill of sale was void. The learned judge refused the application, but on appeal Fletcher Moulton and Farwell L.JJ. held that the respondent's contention was correct and granted the application.

The basis of the judgment so arrived at seems to be that the proceedings at Ilford in February, 1908, amounted to a carrying on of business by the appellant at an address other than 30, Upper Brook Street, Ipswich, and also that "such carrying on of business" constituted a penal offence within the provisions of s. 2 of the Money-lenders Act, 1900, which enacts that

"A money-lender as defined by this Act shall register himself as a money-lender .... under his own or usual trade name, and in no other name, and with the address, or all the addresses if more than one, at which he carries on his business of money-lender, and shall carry on the money-lending business in his registered name and in no other name, and under no other description, and at his registered address or addresses, and at no other address, and shall not enter into any agreement in the course of his business as a money-lender with respect to the advance or 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."

Now in order to apply the above provisions it is advisable to consider what was the object of them.

Guided by the words of the Act, I would surmise that the object of the Legislature was to preserve the identity of the money-lender so that borrowers might always know with whom they were dealing. To secure that the money-lender should trade in only one name, and carry on business at only one address, would do much, and has done much, to establish the desired personal identity of the persons with whom borrowers were dealing.

It must, however, be noted that by the concluding words of the section certain transactions necessary to the carrying out of a loan are dealt with, and they are specifically required to be effected in the registered name, but not at the registered address, of the money-lender. If these transactions are included in the words "carrying on of business," these last provisions would be unnecessary.

But in whatever spirit the words of the statute are to be read, a construction must be put upon them, and they must be applied to the facts established in this case. What, then, is the meaning that should be attached to the words "carrying on business"?

I decline to formulate any definition of those words. Dangerous consequences might result from doing so, but I accept the responsibility of saying whether it has been shewn that the appellant has carried on business at an address other than his registered address.

In my opinion such proof has not been given. The visits to the respondent's house in February, 1908, and the acts that took place there, were for the purpose of carrying out a particular transaction, and some of the acts were necessarily or more conveniently transacted there. In relation to a money-lender's business, I presume that some portions of it cannot, or would not, be transacted at the lender's registered place of business.

For instance, when a bill of sale is given as security for a loan, the goods assigned must be inspected, and a value estimated and an inventory made. For carrying out such objects the lender or his agents must visit the tenement where the goods are. Can it be said that such a visit constitutes a carrying on of business (within the meaning of the statute) at any tenement to which such visits are so made?

If such were the case a money-lender would be prohibited from calling upon a proposed borrower, from testing his position in his home, or from taking the steps mentioned above.

Then again it may be very advisable that the borrower should be identified and the money lent should be paid over to him personally. Can the Legislature have intended to say that every act connected with the carrying out of a money-lending transaction, as distinguished from the general carrying on of business, must compulsorily take place within the four walls of the registered address? If such had been said, in many instances business could not be carried on. Any person unable to travel from sickness, or age, or any other incapacity, would be prevented from borrowing from a money-lender.

It is true that in this case the bill of sale was executed, and the money lent advanced, at Ilford. But surely when the lender's agent and the borrower met at Ilford it would have been somewhat absurd if they were prevented from completing the transaction, and a forced journey to Ipswich undertaken by the borrower.

As I have said, I decline to give a definition of the meaning of the words "carrying on business" used in the statute. I repeat that it would be dangerous to do so. Evasion might follow. I can understand an ingenious method of evading or breaking the statute being resorted to, as by a system of canvassing for business from house to house, and a definition may tend to protect such proceedings.

But instead of giving a definition, I suggest that each case should be determined as it arises, and thus I decide this case upon the facts presented to your Lordships.

In my opinion, as I have said, there is no proof that the appellant has carried on business at any address other than the Ipswich registered address. Certain portions of one transaction were carried out at Ilford, but these could not possibly result in giving to the appellant any right to use the respondent's house as his address.

The strict words of the statute, common sense, and the necessities of commercial transactions combine to cause me to come to the conclusion that the Legislature could not have intended to impose upon money-lenders who have acted under the conditions of this case the liability to be subjected to the results contended for by the respondent.

I therefore am of opinion that this appeal must prevail.