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GAZETTE
APRIL 1992
An argument can be made that the
proviso "cash paid to the company"
should be narrowed as far as
possible. Unfortunately Barron J's
reading would not so much narrow
the proviso as change its meaning
and also change the law. As
suggested above "cash p a i d" implies
the normal rules of loan and
repayment; to alter that meaning
goes far beyond any restrictions
previously imposed on the meaning
of a proviso. If as Barron J suggests
the proviso in its ordinary meaning
undermines the overall effect of
Section 288, it must be taken that
the legislature intended this. It is a
very old rule of construction that if
the general words and the proviso
conflict, the proviso must prevail,
as it, so to speak, has the last
word.
40
Rule against futility
Finally, Barron J might have invoked
what may be called the rule against
futility. His view that the proviso
read in its natural meaning would
thwart the intention of the legislature
was shared by Harman LJ in
Yeovil
Glove Company.
Was he then
entitled to find that the proviso must
be given a meaning other than the
usual, to make Section 288
workable? The limits of the "Rule
against Futility" were set out by
Lord Shaw in
Shannon Realities Ltd.
-v-
Ville de St. Michel":
"Where the words of a statute are
clear they must of course be followed;
but in their Lordships opinion where
alternative constructions are equally open
that alternative is to be chosen which
will be consistent with the smooth
working of the system which the statute
purports to be regulating; and that
alternative is to be rejected which will
introduce uncertainty friction or
confusion into the working of the
system".
42
TVvo difficulties arise in applying this
rule to Section 288. In the first
place, in the writer's view, the words
of the proviso are clear, which as the
passage above shows, excludes any
rule except that of literal
intrepretation. Secondly, even if the
proviso is ambiguous, so that a rule
of " smoo th working" would
normally be allowable, there is no
precedent for applying such a rule in
a manner which would change the
Common Law. Although it has been
suggested
43
that a court chosing
between alternatives may choose a
meaning which alters the law, it is
suggested that it should be very slow
to do so.
Conclusion
One must conclude, however
reluctantly, that the earlier decisions
were right and that there is no
ground for reading the Section 288
proviso in a way which excludes the
rule in
Clayton's case.
It is
understood that Barron J's
judgement is under appeal. Should
the Supreme Court reverse him
on the plaintiff's entitlement to
the benefit of the proviso, it will
be forced to construe it. One
would suggest that however
undesirable the literal reading of the
proviso may be, there are insufficient
grounds for applying any other
rule of intrepretation and any reform
must be left to legislation.
"One must conclude, however
reluctantly, that the earlier
decisions were right and that
there is no ground for reading
the Section 288 proviso in a way
which excludes the rule in
Clayton's case."
NOTES
1. Barron J. 1 February, 1991,
Unreported.
2.
Devaynes
-v-
Noble, Clayton's case
(1816) 1 Mer 572.
3.
Re Thomas Mortimer
(1925) 4 Legal
Decisions Affecting Bankers p.3,
[1965] 1 Ch.186 (Note).
4.
Re Yeovil Glove Company
(1965) 1
Ch. 148.
5.
Re Daniel Murphy
[1965] I.R. 1.
6. It is unlikely that the altered wording
affects the point at issue here
however.
7.
In Re Daniel Murphy
the difference
was about £4,700; in Re
Thomas
Mortimer
it appears that about
£51,000 was at stake.
8. At page 12 of his unreported
judgment.
9. See
Station Motors Ltd.
-v-
A.LB.
[1985] I.R. 756;
Re Primrose Builders
Ltd.
[1950] Ch. 561.
10.
Leach
-v-
R
[1912] A.C. 305;
11. Including Rules of Procedure - see
In Re
East London Railway Company
(1890) 24 Q.B.D. 507.
12.
Re Fitzgerald
supra.
13. [1964] I.R. 1.
14. (1925) 4 Legal Decisions Affecting
Bankers p.3, [1965] 1 Ch 186 (Note).
15. [1965] 1 Ch. 148.
16. See the remarks of McCarthy J in
" Irish Shell
-v-
Elm Motors
[1984] I.R.
200 at 225 to 227 on the view of
Costello J. in the Court below (page
212).
17. [1964] I.R. 1 at 13 to 14.
18. His grasp of the relevant law seems
to have been rather shaky but this
may be explained by the judgment
apparently being ex tempore.
19. Reported at [1963] Ch 528.
20.
In Re Sherry
(1884) 25 Ch. D 692;
Deeley
-v-
Lloyds Bank Ltd.
[1912]
A.C. 756.
21. [1965] 1 Ch. 148 at 172 to 173.
22. [1985] I.R. 756.
23. [1950] Ch. 561.
24. [1985] I.R. 756 at 765.
25. See Paget on Banking (10th Edition)
at pages 242 to 243.
26. See
In Re Fitzgerald
[1925] 1 I.R. 39,
42.
27. See in particular
Leach
-v-
R.
[1912]
A.C. 305.
28. See
Burge
-v-
Ashley and Smith Ltd.
[1900] 1 Q.B. 744.
29. As to necessary implications, see
In
Re East London Railway Company
(1890) 24 Q.B.D. 507.
30. The amended wording inserted by
Section 136 of the 1990 Act reads
"Money actually advanced or paid or
the actual price or value of goods or
services sold or supplied".
31. (1867) L.R. 1 C.C.R. 90.
32. (1867) L.R. 1 C.C.R. 90 at 95.
33. (1584) 3 Co. Rep. 7A.
34. Ibid.
35. Notably
Re Columbian Fire Proofing
Company
[1910] 2 Ch. 120.
36. See page 15 of his Judgement.
37.
Re Tabrisky, ex parte the Board of
TYade
[1947] Ch.565.
38. [1910] P. 57.
39. [1910] P. 57 at 125.
40. See
Attorney General
-v-
Chelsea
Water Works Co. (1731)
1 Fitzg 195.
41. [1924] A.C. 185.
42.[1924] A.C. 185 at 192/193.
43. See
Nokes
-v-
Doncaster
Amalgamated Collieries Ltd.
[1940]
A.C. 1014 at 1022 per Viscount
Simon L.C.
Christopher Doyle, BL.
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