House of Lords (1964)

APPEALS from the First Division of the Court of Session.

    These were four actions which had been brought against the Lord Advocate under the Crown Suits Act, 1857, by four associated oil companies, Burmah Oil Co. (Burma Trading) Ltd., Burmah Oil Co. (Burma Concessions) Ltd., Burmah Oil Co. (Overseas) Ltd. and Burmah Oil Co. (Pipe Lines) Ltd., all having their registered offices in Glasgow. Each case arose out of the total or partial destruction of certain property and assets of each company in Burma, which wascarried out in 1942 under the directions from H.M. Government in the United Kingdom. In each case the company concerned sought (1) a declarator that it was entitled to payment out of the revenues of the Crown in the United Kingdom of such sum as would make good to them the damage sustained by each of them as a result of that total or partial destruction, and (2) a declarator relating to the amount of money which in each case would make good the respective damage suffered by each of them.

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    The facts stated by Lord Reid were as follows. The pursuers averred that, in accordance with directives from His Majesty's Government in the United Kingdom, the G.O.C., Burma on February 3, 1942, issued instructions that in order to prevent these and other installations and stocks from falling into the hands of the enemy they should, when necessary, be destroyed and put out of action, because this would deny to the enemy industrial resources and facilities likely to be of use to him. It was said that the view of H.M. Government was that such demolition would be of the greatest service to the general prosecution of the war by Britain and her allies. Preparations for this destruction were supervised by a Mr. W. L. Forster, an expert sent from Britain by the Government for that purpose. The battle of the Sittang river on February 22 settled the fate of Rangoon, and orders for evacuation and destruction of installations and property in that neighbourhood were issued on March 6. These orders were carried out on March 7 and Rangoon was occupied by the enemy on March 8. Other installations farther north were destroyed between that date and April 19. The last British forces left Burma on May 20. It was averred that the principal object of the British forces during this period was to gain time to enable the defences of India to be built up; the demolitions were not intended to secure the defence of Burma. It was admitted that the military situation rendered this destruction expedient for the defence of His Majesty's other territories.

    It was admitted that these demolitions were carried out lawfully. The respondent averred in his Answer 8 that, by virtue of the Defence of Burma Act, 1940, and rules made under it, no action lay against the Crown in respect of them. But that was denied by the appellants on various grounds, and that matter had not yet been considered or investigated.

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Their Lordships took time for consideration.

April 21. LORD REID.

    My Lords, there are before your Lordships four appeals by associated companies in actions brought by them against the Lord Advocate under the Crown Suits Act, 1857. When war broke out with Japan these companies owned extensive properties in Burma, including oil wells, pipe lines, refineries and other buildings and stocks of petroleum and other goods. When the Japanese invaded Burma these were destroyed by order of the British Government. The appellants claim that they are entitled to payment of such sum as will make good to the pursuers the damage sustained by them as a result of that destruction. The Lord Ordinary, Lord Kilbrandon, repelled pleas that the pursuers' averments are irrelevant and allowed proof before answer. The First Division by interlocutors of March 14, 1963, sustained the pleas to relevancy and dismissed the actions. The appellants now seek to have the interlocutors of the Lord Ordinary restored.

    The pursuers aver that, in accordance with directives from His Majesty's Government in the United Kingdom, the G.O.C., Burma on February 3, 1942, issued instructions that in order to prevent these and other installations and stocks from falling into the hands of the enemy they should, when necessary, be destroyed and put out of action, because this would deny to the enemy industrial resources and facilities likely to be of use to him. It is said that the view of H.M. Government was that such demolition would be of the greatest service to the general prosecution of the war by Britain and her allies. Preparations for this destruction were supervised by an expert sent from this country. The battle of the Sittang river on February 22 settled the fate of Rangoon, and orders for evacuation and destruction of installations and property in that neighbourhood was issued on March 6. These orders were carried out on March 7 and Rangoon was occupied by the enemy on March 8. Other installations further north were destroyed between that date and April 19. The last British forces left Burma on May 20. It is averred that the principal object of the British forces during this period was to gain time to enable the defences of India to be built up; the demolitions were not intended to secure the defence of Burma. It is admitted that the military situation rendered this destruction expedient for the defence of His Majesty's other territories.

    It is admitted that these demolitions were carried out lawfully. The respondent avers in his Answer 8 that by virtue of the Defence of Burma Act, 1940, and rules made under it no action lies against the Crown in respect of them. But that is denied by the appellants on various grounds, and that matter has not yet been considered or investigated. The respondent has chosen to challenge the relevancy of the appellants' averments, as he was quite entitled to do. So the only question now before your Lordships is whether the First Division were correct in holding that these averments are irrelevant. This appeal must therefore be decided on the basis that the appellants can prove their averments, and we cannot look beyond those averments and such admissions as the appellants have made. On that basis we must assume that there was no statutory authority for the demolitions and that there is no statute dealing with or regulating any right to compensation.

    The case has been conducted on the footing that the law of Scotland is applicable - perhaps because the law of any other country would have been a question of fact requiring proof. This would seem strange because the only connection which the case has with Scotland is the fact that the persons who have suffered loss are Scottish companies. They were quite entitled to sue the Crown in Scotland but it does not follow that Scots law is relevant. I think, however, that we can properly deal with the matters involved in this appeal because it does not appear that as regards them there is any material difference between the law of Scotland, the law of England and the law applicable in Burma in 1942.

    The appellants' case is that the demolitions were carried out by an exercise of the royal prerogative. At one time this was denied. It was said that this was an operation which any subject was entitled to carry out in the defence of the country and that neither the Crown nor a subject can have any obligation to pay compensation for such an operation. No doubt there are occasions when a subject is entitled to act on his own initiative in the defence of the realm, particularly if there is no one in authority there to direct him. But I find it impossible to suppose that any subject could have been entitled to carry out these demolitions on his own initiative. As this point was not argued before your Lordships it is unnecessary to deal with it further. So we must now take it that these demolitions were carried out by an exercise of the royal prerogative, and the question for decision is whether such an exercise of the royal prerogative gives any legal right to compensation to the persons who have suffered loss thereby.

    It is not easy to discover and decide the law regarding the royal prerogative and the consequences of its exercise. Apart from In re a Petition of Right and Attorney-General v. De Keyser's Royal Hotel Ltd., there have been no cases directly raising the matter for some centuries, and obiter dicta and the views of institutional writers and text writers are not always very helpful. The definition of Dicey (Law of the Constitution, 10th ed., p. 424), always quoted with approval: "The residue of discretionary or arbitrary authority, which at any given time is legally left in the hands of the Crown, " does not take us very far. It is extremely difficult to be precise because in former times there was seldom a clear-cut view of the constitutional position. I think we should beware of looking at older authorities through modern spectacles. We ought not to ignore the many changes in constitutional law and theory which culminated in the Revolution Settlement of 1688-89, and there is practically no authority between that date and 1915. I am no historian but I would suppose that Maitland is as good a guide as any. In his Constitutional History he says: "I do not wish you to think that a definite theory to the effect that while legislative power resides in king and parliament, the so-called executive power is in the king alone, was a guiding theory of mediaeval politics. On the contrary, the line between what the king could do without a parliament, and what he could only do with the aid of parliament, was only drawn very gradually, and it fluctuated from time to time." (p. 196.) and again: "Where is sovereignty? I have before now given my reasons why we should not ask this question when studying the Middle Ages - why we should understand that no answer can be given." (p. 297.) So it appears to me that we must try to see what the position was after it had become clear that sovereignty resided in the King in Parliament. Any rights thereafter exercised by the King (or the executive) alone must be regarded as a part of sovereignty which Parliament chose to leave in his hands. There is no doubt that control of the armed forces has been left to the prerogative (see Chandler v. Director of Public Prosecutions subject to the power of Parliament to withhold supply and to refuse to continue legislation essential for the maintenance of a standing army: and so also has the waging of war. But it may be interesting to note in passing the Scottish Act, 1703, c. 5, which provided that "no person being King or Queen of Scotland and England shall have the sole power of making war with any prince, potentate or state whatsomever without consent of Parliament: and that no declaration of war without consent foresaid shall be binding on the subjects of this Kingdom, declaring always that this shall no wise be understood to impede the Sovereign of this Kingdom to call forth, command and employ the subjects thereof to suppress any insurrection within the Kingdom, or repell any invasion from abroad, according to former laws."

    The reason for leaving the waging of war to the King (or now the executive) is obvious. A schoolboy's knowledge of history is ample to disclose some of the disasters which have been due to parliamentary or other outside attempts at control. So the prerogative certainly covers doing all those things in an emergency which are necessary for the conduct of war. It has been suggested that some greater right arises in an extreme emergency, but it would be very strange if the law prevented or discouraged necessary preparations until a time when it would probably be too late for them to be effective. But, as I shall try to show later, there are some kinds of action for which the need only arises in an extreme emergency in face of the enemy, and there the position is different.

    There is difficulty in relating the prerogative to modern conditions. In fact no war which has put this country in real peril has been waged in modern times without statutory powers of an emergency character. The taking of property for defence purposes was authorised by statute, not only in the last war and in the 1914 war, but also in the Napoleonic wars, and it could only be taken subject to payment of compensation.

    What we have to determine in this case is whether or when, in a case not covered by any statute, property can be taken by virtue of the prerogative without compensation. That could only be an exceptional case, because it would be impracticable to conduct a modern war by use of the prerogative alone, whether or not compensation was paid. The mobilisation of the industrial and financial resources of the country could not be done without statutory emergency powers. The prerogative is really a relic of a past age, not lost by disuse, but only available for a case not covered by statute. So I would think the proper approach is a historical one: how was it used in former times and how has it been used in modern times?

    As regards modern times, extensive investigation in connection with the De Keyser case failed to disclose a single instance of taking or interfering with land without payment. and if movables had been taken without compensation at any time after 1660 I feel sure that historians would have found evidence of that. People in influential positions may have been very willing to give their services but they were very sensitive about property. It would certainly have been a grievance if property had been taken without payment, yet there is no mention of such a grievance either in 1688-9, or at any other time. Negative evidence may not amount to proof, but it is so strong that I would hold it established that prerogative was never used or attempted to be used in that way in modern times before 1914.

As regards earlier times I think that the Ship Money case (Rex v. Hampden) deserves rather more consideration than it received in the De Keyser case or than it has received in this case. In the course of very long and elaborate arguments and opinions, extending to 425 columns in the report, every aspect of the royal prerogative connected with defence was examined and every known precedent was set out and discussed. I have not attempted to study the whole report but I find many instances given where the King paid for goods taken to supply and equip his troops on active service. Some are given by Mr. St. John immediately before the passage in his argument on which the Crown rely. and I have not noticed any reference to any instance in which the King took the property of a subject without payment, except in conditions where both parties were agreed that it was the right and duty of every man to take and use anything he could lay hands on in order to fight the approaching enemy. Looking to some similar passages scattered among the arguments and judgments, I think that Mr. St. John must have had that sort of thing in mind in the passage quoted from his argument. and I feel sure that if there were any passage in the report showing any wider use of the prerogative or any argument supporting any wider right we would have been referred to it. What the King was contending for was a right to require his subjects to contribute to defence expenditure. The argument seems to have been that it was the duty of the King to defend his subjects, and that if imminent danger required extraordinary expenditure his subjects must be bound to contribute, because all ought to pay their share of expenditure made for the benefit of all. There is no suggestion that I can find that the King could have avoided at least part of this expenditure even in time of war by taking for nothing supplies or other property required for the conduct of the war. Without further investigation I would not rely too much on this case, but it does seem to indicate that, even at the zenith of the royal prerogative, no one thought that there was any general rule that the prerogative could be exercised, even in times of war or imminent danger, by taking property required for defence without making any payment for it.

    Before turning to the cases which arose out of the 1914 war, I would make these observations. First, there is nothing novel in the idea that a prerogative right to take property carries with it an obligation to pay compensation: that has apparently always been recognised with regard to the prerogative rights of purveyance and angary. And, secondly, it was well established that taking or destroying property in the course of fighting the enemy did not give rise to any claim for compensation, whether that was done by the armed forces of the Crown or by individuals taking arms to defend their country or by the enemy. What had never been clarified was the question whether compensation was payable when property was taken deliberately for defence purposes, and in modern times such purposes would at least include training of troops, manufacture of munitions, obtaining the wide variety of supplies necessary to maintain the forces on active service, and economic warfare and various purposes essential to the conduct of the war but not immediately concerned with the maintenance of the fighting services. I may say at this point that it was rightly not argued that the fact that property is taken for destruction and not for use can make any difference.

I must now turn to examine the authorities which arose out of the 1914 war. In In re a Petition of Right  the military authorities took possession of land for Shoreham Aerodrome. The owners were dissatisfied with the compensation offered and sought a declaration that they were entitled to proper compensation. The Crown pleaded that the land had been taken by the royal prerogative or, alternatively, under the Defence of the Realm Act 1914. It was held that no compensation was legally due under either. The question whether the royal prerogative gave rise to compensation received little attention. The report of the arguments shows that counsel for the subject only cited some authorities which seem to have little to do with the matter, and there was only cited for the Crown an obiter dictum of Buller J. in British Cast Plate Manufacturers Co. v. Meredith. Warrington L.J. said  that it was admitted that no compensation was due under the prerogative. Pickford L.J. did not deal with the matter, and Lord Cozens-Hardy M.R. appears to have assumed that no compensation was legally due. So I cannot regard this as a case of great weight on this matter.

In De Keyser's case the Crown took possession of a London hotel for use as headquarters of the Royal Flying Corps. The owners sought a declaration that they were entitled to rent, and they succeeded on the ground that the Crown had acted under the Defence of the Realm Acts and that compensation was due in respect of the use of statutory powers. By no means all the authorities cited in this case were cited, but a large volume of records of instances of dealing with land was produced. That volume has been re-examined in this case and little help has been found in it on the question whether or when compensation is due for damage caused by an exercise of the royal prerogative. Lord Dunedin said: "... the texts give no certain sound as to whether this right to take is accompanied by an obligation to make compensation to him whose property is taken." He pointed out that all the older statutes had made provision for compensation and said: "It is also significant that in the whole statutory series there is no trace of any claim to take under the prerogative and not to pay."