[COURT OF APPEAL]

TAMLIN v. HANNAFORD.

Landlord and tenant - Rent restriction - Dwelling-house - Lease - Property of Great Western Ry. Co. - Nationalization of the railways - British Transport Commission - Not a servant or agent of the Crown - House subject to the Rent Restriction Acts.

The British Transport Commission is not a servant or agent of the Crown, and it has none of the immunities and privileges of the Crown; its servants are not civil servants and its property is not Crown property; and it is as much bound by Acts of Parliament as any other subject of the King. It is a public authority and its purposes are public purposes, but it is not a government department, nor do its powers fall within the province of government.

The only fact which, it could be suggested, made the commission a servant or agent of the Crown was the control over it exercised by the Minister of Transport (see s. 4 of the Transport Act, 1947);

but there was ample authority for saying that such control was insufficient for the purpose. See Cannon Brewery Co. Ld. v. Central Control Board (Liquor Traffic) [1918] 2 Ch. 101, 113; [1919] A. C. 744, 757.

Accordingly, dwelling-house, formerly the property of a railway company, which had vested in the commission, by virtue of the Transport Act, 1947, is subject to the Rent Restriction Acts.

Per Curiam: In considering whether any subordinate body is entitled to Crown privilege the question is not so much whether it is an "emanation of the Crown," a phrase first used in Gilbert v. The Corporation of Trinity House (1886) 17 Q. B. D. at p. 801, but whether it is properly to be regarded as the servant or agent of the Crown. See International Ry. Co. v. Niagara Parks Commission [1941] A. C. 342-3.

When Parliament intends that a new corporation should act on behalf of the Crown, it, as a rule, so states in the statute constituting the corporation. In the absence of any such provision, the proper inference in the case, at any rate, of a commercial corporation, is that it acts on its own behalf, even though it controlled by a government department.

APPEAL from Plymouth county court.

The plaintiff was the tenant of a dwelling-house, No. 2, Buckland Street, Plymouth, as from March 25, 1946, his landlords having been the Great Western Ry. Co. He sub-let rooms therein to the defendant on a weekly tenancy. Having served notice to quit the rooms on May 11, 1948, on the defendant, who continued to occupy the rooms after that date, the plaintiff brought an action in the Plymouth county court claiming their possession. The defendant relied on the Rent Restriction Acts. His Honour, Judge Scobell Armstrong, held that by virtue of the Transport Act, 1947, the house had vested in the British Transport Commission and that the house must be regarded as "owned by the Crown and administered by the British Transport Commission as Crown agents." The Rent Restriction Acts, therefore, did not apply to the house and he made an order for possession of the rooms.

The sub-tenant appealed.

Sir Valentine Holmes K.C. and J. P. Ashworth for the sub-tenant. The British Transport Commission is not a servant or agent of the Crown. Their functions are of a commercial character: they are a commercial body. See the Transport Act, 1947, ss. 1 to 6, 9, 11, 14, sub-s. 3, 29, 30, 37. Section 90 of the Railway Clauses Consolidation

Act, 1945, does not, it is plain, bind the Crown: yet by s. 74, sub-s. 1, of the Transport Act, 1947, that section is treated as binding the Commission. Part VI of the Act, dealing with finance, is inconsistent with the Commission being cither a government department or an "emanation from the Crown." See ss. 88, 91, 92, 93, 94 sub-s. 6. See also ss. 100 and 123. The Crown Proceedings Act, 1947, was placed upon the statute book six days before the Transport Act, 1947. By s. 30, sub-s. 2, of the earlier Act: "Subject to the provisions of the preceding sub-section, nothing in this Act shall prejudice the right of the Crown to rely upon the law relating to the limitation of time for bringing proceedings against public authorities." But by s. 11 of the later Act: "The Public Authorities Protection Act, 1893, and s. 21 of the Limitation Act, 1839, shall not apply to any action, prosecution or proceeding against the Commission ...." See In re Wood's Estate (1) as to the position of the Commissioners of Public Works and Buildings: they do not represent the Crown. The Town and Country Planning Act, 1947, was passed on the same day as the Transport Act, 1947, and in the former Act there is an express provision that the functions under the Act of the Central Land Board and of their officers and servants shall be exercised on behalf of the Crown: see s. 3, sub-s. 3. There is no such provision in the Transport Act, 1947. The British Transport Commission, not being a servant or agent of the Crown, this dwelling-house, vested in them, was not Crown property and the Rent Restriction Acts apply to it.

The plaintiff was the tenant of this dwelling-house. He was, in any case, not a civil servant and the further point arises whether he is at liberty to avail himself of this rule relating to the Crown.

Redmond Barry K.C. and Frank Cridlan for the tenant. The British Transport Commission is an agent of the Government and of the Crown, control being exercised over it by the Minister of Transport. See s. 4 of the Act. This dwelling-house was Crown property. As Denning J. said in Territorial Forces Association v. Philpot (2): "It is plain that if premises are occupied for public purposes and are, therefore, deemed part of the use and service of the Crown, they are exempted from rating." Public purposes fall within the sphere of government since the sphere of government

(1) (1886) 31 Ch. D. 607.

(2) [1947] 2 All E. R. 376, 377.

is not static, but is continually growing. The real question is: What at this date is the true province and sphere of central government? In Mersey Docks and Harbour Board v. William Cameron and Others (1) it was held that trustees to maintain docks at one port only, that of Liverpool, were liable to be rated as occupiers. It would require a bold man to suggest that the control of docks at one particular port was a matter of central government. But today, transport is a vital requirement for the welfare of the country - being a nation-wide service - and it has been taken over by the State. The function of the British Transport Commission and of the Railway Executive is as wide in its ramifications as that of the Post Office. See also International Ry. Co. v. Niagara Parks Commission (2) where the Commissioners acted on behalf of and with the approval of the province of Ontario. Turning to s. 2 of the Transport Act, 1947, the powers of the British Transport Commission are no doubt of a commercial character; but that does not take them out of the sphere of the functions of central government. The Post Office is a commercial concern, but it is a government department and its officers are civil servants. The word "commission" connotes centralization more than the word "corporation." Compare the use of the word in the cases of the Forestry Commission and the War Damage Commission acting under the auspices of the Treasury. In Graham v. Public Works Commissioners (3), Phillimore J., speaking of the Commissioners of Public Works and Buildings, said(4): "The Crown has with the consent of Parliament, in certain cases established certain officials who are to be treated as agents of the Crown but with a power of contracting as principals. The Secretary of State for War and the Postmaster-General are known instances of this." See also Sanitary Commissioners of Gibraltar v. Orfila and Others (5). Turning again to the Transport Act, 1947, reliance is placed on the terms of s. 4 which set out the powers of the Minister in relation to the Commission. The Minister's control is complete.

The decision of the county court judge was correct. The dwelling-house was the property of agents of the Crown, and

(1) (1864) 11 H. L. C. 443.

(2) [1941] A. C. 328.

(3) [1901] 2 K. B. 781.

(4) Ibid. 790.

(5) (1890) 15 App. Cas. 400.

so Crown property. The Rent Restriction Acts, therefore, were not applicable to it.

J. P. Ashworth replied.

July 8. DENNING L.J., read the judgment of the court: The plaintiff was the lessee of a house, No. 2, Buckland Street, Plymouth, which used to belong to the Great Western Railway Co. The defendant was the sub-tenant of some rooms in the house and was protected in those days by the Rent Restriction Acts. On the nationalization of the railways, however, the house became vested in the British Transport Commission, by virtue of the Transport Act, 1947, and the county court judge has held that, on that account, the defendant has lost the protection of the Rent Restriction Acts. The judge said that the house "must be regarded as owned by the Crown and administered by the British Transport Commission as Crown agents," and that the house "being now Crown property, is no longer within the scope of the Rent Restriction Acts." He accordingly made an order for possession.

It is, of course, a settled rule that the Crown is not bound by a statute unless there can be gathered from it an intention that the Crown should be bound; and it has been held that, under this rule, the Crown and its servants and agents are not bound by the Rent Restriction Acts. (See, for instance, Territorial and Auxiliary Forces Association of the County of London v. Nichols (1). In considering whether any subordinate body is entitled to this Crown privilege, the question is not so much whether it is an "emanation of the Crown," a phrase which was first used in Gilbert v. Corporation of Trinity House (2), but whether it is properly to be regarded as the servant or agent of the Crown. (See International Railway Co. v. Niagara Parks Commission (3). In the case of the British Transport Commission, this depends on the true construction of the Transport Act, 1947. We have considered the provisions of that statute and, for the sake of clarity, we propose to state their effect without referring to the various sections in detail.

The Transport Act, 1947, brings into being the British Transport Commission, which is a statutory corporation of a kind comparatively new to English law. It has many of

(1) [1949] 1 K. B. 35.

(2) (1886) 17 Q. B. D. 795, 801.

(3) [1941] A. C. 328, 342-3.

the qualities which belong to corporations of other kinds to which we have been accustomed. It has, for instance, defined powers which it cannot exceed; and it is directed by a group of men whose duty it is to see that those powers are properly used. It may own property, carry on business, borrow and lend money, just as any other corporation may do, so long as it keeps within the bounds which Parliament has set. But the significant difference in this corporation is that there are no shareholders to subscribe the capital or to have any voice in its affairs. The money which the corporation needs is not raised by the issue of shares but by borrowing; and its borrowing is not secured by debentures, but is guaranteed by the Treasury. If it cannot repay, the loss falls on the Consolidated Fund of the United Kingdom; that is to say, on the taxpayer. There are no shareholders to elect the directors or to fix their remuneration. There are no profits to be made or distributed. The duty of the corporation is to make revenue and expenditure balance one another, taking, of course, one year with another, but not to make profits. If it should make losses and be unable to pay its debts, its property is liable to execution, but it is not liable to be wound up at the suit of any creditor. The taxpayer would, no doubt, be expected to come to its rescue before the creditors stepped in. Indeed, the taxpayer is the universal guarantor of the corporation. But for him it could not have acquired its business at all, nor could it now continue it for a single day. It is his guarantee that has rendered shares, debentures and such like all unnecessary. He is clearly entitled to have his interest protected against extravagance or mismanagement.

But there are other persons who have also a vital interest in its affairs. All those who use the services which it provides - and who does not? - and all whose supplies depend on it, in short everyone in the land, is concerned in seeing that it is properly run. The protection of the interests of all these - taxpayer, user and beneficiary - is entrusted by Parliament to the Minister of Transport. He is given powers over this corporation which are as great as those possessed by a man who holds all the shares in a private company, subject, however, as such a man is not, to a duty to account to Parliament for his stewardship. It is the Minister who appoints the directors - the members of the Commission - and fixes their remuneration. They must give him any information he wants; and, lest they should not prove amenable to his suggestions as to

the policy they should adopt, he is given power to give them directions of a general nature, in matters which appear to him to affect the national interest, as to which he is the sole judge, and they are then bound to obey. These are great powers but still we cannot regard the corporation as being his agent, any more than a company is the agent of the shareholders, or even of a sole shareholder. In the eye of the law, the corporation is its own master and is answerable as fully as any other person or corporation. It is not the Crown and has none of the immunities or privileges of the Crown. Its servants are not civil servants, and its property is not Crown property. It is as much bound by Acts of Parliament as any other subject of the King. It is, of course, a public authority and its purposes, no doubt, are public purposes, but it is not a government department nor do its powers fall within the province of government.

The correctness of these views is shown by the way in which the railways have been dealt with. Apart from the special provisions as to the constitution of the Commission, all that has happened is that there has been an amalgamation of the previous railway companies into one concern which is expressly made subject to the same rights and liabilities as were the railway companies, including statutory duties, contractual obligations, and even some customary obligations. This one amalgamated concern is run by a statutory corporation called the Railway Executive, but this corporation is nothing more nor less than the agent of the Commission. So far as third persons are concerned, the Railway Executive is treated as running the railways on its own account. For instance, the officers and servants of the former companies are treated as officers and servants of the Railway Executive and not of the Commission. But in the last resort, it is the Commission which is responsible. If a judgment against the Railway Executive is not satisfied, execution can be levied against the property of the Commission. All this seems to be quite inconsistent with the notion that the Commission is itself a government department or an agent of the Crown. Execution is not leviable against a government department, even under the Crown Proceedings Act, 1947.

We do not find it very useful to draw analogies from other bodies which are differently constituted and differently controlled and exist for different purposes. The Territorial Forces Associations, for instance, are not concerned with

commercial matters, but with the defence of the realm, which is essentially the province of government and are therefore to be considered agents of the Crown: Territorial Forces Association v. Philpot (1); Territorial and Auxiliary Forces Association of the County of London v. Nichols (2). The Post Office is the nearest analogy. It is, of course, concerned with commercial matters, but is nevertheless a government department and its servants are civil servants. That is, however, an anomaly due to its history. The carriage of mail was a Crown monopoly long before the Postmaster-General was incorporated. But the carriage of passengers and goods is a commercial concern which has never been the monopoly of anyone and we do not think that its unification under state control is any ground for conferring Crown privileges upon it.

The only fact in this case which can be said to make the British Transport Commission a servant or agent of the Crown is the control over it which is exercised by the Minister of Transport; but there is ample authority both in this Court and in the House of Lords for saying that such control as he exercises is insufficient for the purpose. (See Cannon Brewery Co. Ld. v. Central Control Board (Liquor Traffic) (3).) When Parliament intends that a new corporation should act on behalf of the Crown, it as a rule says so expressly, as it did in the case of the Central Land Board by the Town and Country Planning Act, 1947, which was passed on the very same day as the Transport Act, 1947. In the absence of any such express provision, the proper inference, in the case, at any rate, of a commercial corporation, is that it acts on its own behalf, even though it is controlled by a government department.

In our opinion, therefore, the British Transport Commission is not a servant or agent of the Crown and its property is as much subject to the Rent Restriction Acts as the property of any other person. The defendant is therefore entitled to raise the Rent Restriction Acts. Sir Valentine Holmes mentioned a further point, namely, whether in any case the plaintiff, who was clearly not the servant or agent of the Crown, could avail himself of the rule relating to the Crown; but it was not argued and we express no opinion on it. The

(1) [1947] 2 All E. R. 376.

(2) [1949] 1 K. B. 35.

(3) [1918] 2 Ch. 101, 113; [1919] A. C. 744, 757.

appeal is allowed and the case remitted to the county court for the decision of that court in the light of this judgment.

Solicitors for the tenant: Kenneth Brown, Baker, Baker, for W. H. Sloman, Plymouth.

Solicitors for the tenant: Kinch and Richardson, for Broadbent and Huddart, Plymouth.

C. G. M.