HC Deb 23 July 1915 vol 73 cc1872-82

(1) Coal at the pit's mouth shall not be sold or offered for sale by the owner of the coal or on his behalf at a price exceeding by more than the standard amount per ton the price of coal of the same description, sold in similar quantities (and under similar conditions) at the pit's mouth at the same coal mine on the corresponding date (or as near thereto as, having regard to the course of business, may be practicable) in the twelve months ended the thirtieth day of June, nineteen hundred and fourteen (in this Act referred to as the corresponding price).

(2) The standard amount shall be four shillings: provided that the Board of Trade may, by order, if they are satisfied, as respects any class of coal mines specified in the order or the coal mines in any district so specified, that owing to special circumstances affecting those mines the standard amount of four shillings should be increased, substitute for that amount such higher sum as they may think just in the circumstances; and as respects those mines this Act shall have effect as if the higher sum so substituted were the standard amount.

(3) If any person sells or offers for sale any coal in contravention of this Section he shall be liable on summary conviction to a fine not exceeding one hundred pounds or, at the discretion of the Court, to a fine not exceeding treble the amount by which the sum paid or payable for any coal sold by him in contravention of this Section exceeds the maximum sum which would have been paid or payable for the coal if there had been no contravention of this Section.

(4) This Section shall apply to a case where the owner of coal at the pit's mouth has sold or offered to sell that coal at a price which includes the cost of railway or other incidental services besides the actual value of the coal at the pit's mouth, as if he had sold or offered to sell it at the pit's mouth at a price reduced by an amount representing the cost of those services.

Amendment proposed [22nd July], at the end of Sub-section (3), to insert the words, Provided that a person shall not be liable to a fine under this provision if he shows that he had reasonable grounds to believe that he was not committing an offence."—[Mr. Samuel Roberts.]

Question again proposed, "That those words be there inserted."


This Amendment was accepted immediately by the President of the Board of Trade last night, but I had no opportunity of saying a word about it, because some Members on the other side of the House raised objections. Those of us on this side have no intention of delaying this Bill; on the contrary, we would like to see it get through this afternoon if possible, and we shall do our best to assist the Government to get it through. It is a very simple Amendment. This Statute is a penal one, and the coal owner who infringes the Bill is liable, on conviction, to be heavily fined. A penal Statute like this presumes a guilty' mind, and the object of this Amendment is to protect the owner who is innocent, where error has been made on his part, or on the part of his agent or sub-agent, or in any other way which has not come to his own knowledge. I think it is a perfectly fair Amendment, and I cannot see why there should be the slightest objection to it. Surely nobody wishes that a man should be convicted if he is really innocent and has not a guilty mind.


I was very sorry when the Government last night decided to accept this Amendment. It seems to me that it is a very extraordinary addition to make to a Bill of this sort. The penalties are going to be subject to this proviso, that the owner can show that he had reasonable ground to believe that he was not committing an offence. That seems to me in itself to give any amount of room for evasion and legal argument. Who is going to prove whether a coal owner had "reasonable grounds" for imagining that he was not committing an offence? I think this Amendment will add enormously to the difficulties of administering the Act. It will give room to any amount of legal argument and possibly legal expense, because there is nothing more vague than a term like "reasonable grounds." The thing is bad in itself, and it will weaken the Bill. I am very much surprised that the Front Bench should have refused most reasonable Amendments and that they should accept an Amendment of this kind, which will add enormously to the difficulties of the Act. If the Bill were one dealing with workmen, such as the Munitions Bill, there would be no question of allowing the workman to make up his mind whether he had "reasonable grounds" or not in not abiding by the Statute. Either you mean to enforce this measure or you do not. If you mean to enforce it, presumably the coal owners know what the provisions of the law are, and if they break the law they ought to be punished the same as they would be in any other direction. Unless you do that you weaken the Bill, and make it even worse than it now is, and that is saying a good deal.

3.0 P.M.


This is the ordinary form, which was unwittingly omitted. The word "knowingly" is commonly inserted, but it is quite obvious that where a man unwittingly commits an offence he certainly ought not to be severely punished. I think there will be general agreement on that point. The difficulty about the word "knowingly" is that by putting in that word it places the onus upon the prosecution to prove that the man knew that he was doing wrong. That is a very difficult thing to prove. The word "knowingly," therefore, goes too far. It has been the custom in Bills of this sort, instead of using the word "knowingly," which is difficult to enforce, to substitute two or three other terms which have practically the same meaning. I have several Acts here from which I might quote examples. In effect you substitute for the word "knowingly" a provision that if a man can show "reasonable grounds" for believing that he was not committing an offence, and that he could not be expected to know, he shall not be liable. That really is comparatively simple, and it is the nearest we can get in these Bills to a fair compromise between punishing a man for an offence which he has quite unwittingly committed, and which he could show was unwittingly committed, but which the Act does not allow to be any defence at all, or that a man who is really guilty should be able to get off simply because you cannot prove that he "knew" he was doing wrong. This Amendment is really a compromise between the two, and I hope the Committee will accept it.


With great respect I do not think the Government have realised the scope and importance of this Amendment. It raises the whole question of whether what lawyers call mens rea has to be established in every case. It seems to me that Parliament has in a number of Statutes deliberately omitted the word "knowingly," because in cases of this kind it is impossible to establish proof of knowledge. It is so in the case of the Food and Drugs Act. It is possible for a man to act perfectly innocently, and without being in the least guilty of any fraud, and the Legislature most wisely said, "We will not insert any such word as 'knowingly.'" The matter is especially important, because most coal owners will be companies to whom you cannot attribute any guilty knowledge. Nine-tenths of the collieries now are the properties of corporations. If a corporation is to be prosecuted, how are you to establish that the corporation, acted with this knowledge? You cannot do it. Or how are you to find out that the corporation had reasonable grounds for knowing that it was doing wrong? This Amendment adds greatly to the extraordinary complexity of this Clause. A man comes forward and says, "I did not know what I was doing. I thought that the coal was not of the same description or was not sold in similar quantities or under similar conditions." If persons are to be allowed to escape responsibility by saying that this Act is very difficult to understand, that they did not know what similar conditions were, that they thought bonâ fide that the conditions were perfectly similar, that there was room for doubt, honest doubt, though it was true that they made a mistake, if that is to be a defence to a charge under this Act in the case of an individual, and above all in the case of a company, I do say that no criminal prosecution instituted under this Act will ever succeed.


I think that the reasons given by the hon. Member for the city of Cork are conclusive in favour of this Amendment. I am no friend of the colliers and I have no interest in coal, but I should like the Bill to be a success. But consider the position of a coal owner who has got to determine the price for a particular quality of coal on a corresponding date in the year 1913–14, of similar coal sold in similar circumstances and in similar quantities. If he makes a blunder, an excusable blunder, a miscalculation, even a misconception as to the particular kind of coal, then under this Section he has to be prosecuted and must be convicted whether he knew he was doing wrong or not, and he must be fixed for the rest of his life as a man convicted in a Court of Summary Jurisdiction. It is a principle of legislation that you must be very careful how you create a new crime. This Section creates a new crime. Never before in the history of the coal trade or any other trade was it made a crime to sell a thing for what price you could get for it. That is what this Section does. Take the case of a respectable person, say the hon. Member for Mansfield (Sir A. Markham), who could not commit a crime in any circumstances. He may be hauled up in the Police Court, and I think that it is probable that he will be if this Bill passes without this Amendment. He goes through all the indignity of being charged with crime. He proves his innocence perfectly to the magistrate. The magistrate says, "I am extremely sorry to have to convict. The only discretion which I have with regard to you is as to the amount of the fine. The fine is either £100 or three times the amount of the profit which you have made out of this. The Government mean the penalty to be a substantial one or they would not have said £100. Therefore I must fine you a substantial sum." I submit to the Committee that this is an Amendment which is not only reasonable, but that it is one which is following precedent, and to do otherwise than carry it would be to create a very dangerous state of things which might be followed with regard to other trades—persons selling bread, wheat, or flour. It may come to that later on when we have legislation restricting those prices. So we have a crime for all kinds of tradesmen created by Act of Parliament—for selling things at the price which they could obtain for them—for which they would be liable to be convicted, though they may be trading perfectly honestly and perfectly innocently.

Question, "That those words be there inserted," put, and agreed to.

Further Amendment made: After the word "apply," insert the words "(both as respects the price at which coal is sold or offered for sale and as respects the correponding price)".—[Mr. Runciman.]


I beg to move, after the word "railway," to insert the words "canal, inland waterway."

I do not know whether the phrase "other incidental services" includes carriage by canal. I have a colliery in Warwickshire from which I sell considerable quantities of coal which are delivered in London by canal, and I would like to know whether coal delivered by canal at practically the same rates as coal delivered by railway—I think that it is about sixpence cheaper—is covered by the Bill as it now stands?

The PRESIDENT of the BOARD Of TRADE (Mr. Runciman)

I am advised that if these words were inserted they would have a limiting effect. The words in the Bill, "incidental services," are of very wide application, and would cover the object to which my hon. Friend refers.


I should say that coal can be carried only by land, water, or railway. You have got the three services. Why put in railway at all and not put in the other?


The railways are much more used for the purpose of carrying coal, especially to our great populous centres. I do not think that the hon. Baronet need press the matter, as it is covered by the words of the Clause.

Amendment, by leave, withdrawn.

Further Amendment made: Leave out the word "a" ["a price reduced"], and insert instead thereof the word "that."—[Mr. Runciman.]


I beg to move, at the end of Sub-section (4), to add, (5) It is hereby declared that nothing in this Section shall affect the rights or obligations of any person under any contract or agreement for the sale of coal except, in cases where the sale is in contravention of this Section, as respects so much of the price as exceeds the maximum price which could have been charged for the coal if there had been no contravention of this Section. The words of Clause 1 are that a contract which goes beyond the price proposed in this Bill will void the contract. My Amendment would make it only void as to the excess price of the coal over the standard price. Unless some provision of this kind is put in, very great inconvenience might arise, because the coal might possibly have been passed on to-somebody else. This proposal would make the contract valid so far as the legal price goes, and only invalid for the excess-over that price. I hope the right hon. Gentleman will see his way to accept my Amendment.


The object, I take it, of this Amendment is to make it clear that where any contract price has been charged above the price provided for in this Bill, the whole contract shall not be invalidated; but, so far as the contract is concerned, the only change that could be made would be in the matter of price: otherwise the contract is to continue. That is not altogether an unreasonable request, I agree; but I think if the price is above that provided for in the Act of Parliament, the customer ought to have the right to say whether he will or will not go on with his contract. It is quite? clear that the buyer ought to have the chance of declaring his contract void. Indeed, if he had not the right of declaring his contract void, it would diminish to some extent the liability which applies to the coal owner for putting a higher price in the contract. I hope the hon. Gentleman will not press his Amendment for that reason, and I could not accept it unless some other reason can be given.


The question arises, where the contract is declared void, whether the owner who supplied the coal would be able to collect payment for it, and whether the contract, being void, the man who received the coal would be able to stick to it without paying anything for it. I want to know where we are in that respect.


This Amendment meets a point which I endeavoured to raise last night. It does appear to me that the? Government ought to consider whether or not they will put something in the Clause which will settle once for all whether a contract in breach of the charge provided in the Bill is a void contract or not. Undoubtedly to the extent of the excess price it is void. Does the right hon. Gentleman mean that the person who has sold coal under contract in breach of this provision is to have no remedy as to any portion of the price? That would be undoubtedly the effect. It would not trouble me if that was the effect, except for the incidental consequence that contracts made void by reason of the breach of this provision might be constantly used by dishonest or insolvent persons as a means of avoiding payment under the contract. Any insolvent or dishonest person would undoubtedly be tempted to set up under this Act that the contract was void because it made a charge which was illegal by reason of its being in excess of the charge provided by the Act. I do not think that any lawyer would deny that. There are hundreds of decided cases in all branches of the law where Parliament by Statute provides that the doing of a thing under the contract is to void that contract.

Unless some Amendment of the kind proposed is inserted in the Bill, I think the coal owners who have insolvent customers will have a very unhappy time of it within the next six months. Everybody knows that it is a very common thing for a customer, where he seeks to avoid payment, to take objection to the quality of the coal, or that the coal was delivered short, or that he had got one kind of coal and not another kind of coal; all which allegations find their origin in his real reason that he will not pay for it. Consequently, if the temptation to which the insolvent purchaser is subjected at present is augmented by the effect of this Bill, he will be enabled in every case of excess over the charge provided for to set up that defence. The right hon. Gentleman has not made any provision in this Bill as to how the facts are to be ascertained. I do not know whether he intends to amend the Bill, but as it stands I apprehend that there will be no reason in the world why the person purchasing the coal should not set up the defence that it had been sold in breach of the Statute, and so endeavour to escape payment. In addition to providing a penalty, I think the right hon. Gentleman ought to go a little further by consenting to this Amendment that the contract shall not be considered in breach of the Statute save to the extent of the excess price over the charge provided for in the Bill.


It would, I submit, be a great hardship if the seller was not permitted to recover the legal value of the coal supplied and that he should have that penalty imposed on him in addition to that in the Bill. I therefore think it would only be fair to accept the Amendment.


I think the Amendment ought to be accepted for this reason. If the system of average prices had been adopted as I proposed the coal owner would have no difficulty in knowing the price, but under the system of the Bill, it is extremely difficult to know. The price might possibly be varied by the Board of Trade by twopence or threepence, and I should like to know whether that would invalidate the whole contract and affect the coal that had not been paid for.


In response to the request of the right hon. Gentleman for reasons why this Amendment should be accepted, may I point out one which is really paramount. In passing legislation of this kind it cannot be desirable to upset the course of trade more than is necessary. The penalties under the Bill would not be affected if this Amendment were accepted, and it would make an enormous difference to the interference in the carrying out of contracts and with the course of trade generally. I think the Amendment will undoubtedly make the Bill far less of an interference with the ordinary course of trade and with the delivery of goods, often of an enormous quantity and over a long period. Without this Amendment the buyer would be able to refuse to accept delivery, which would really create hardship, which I do not think it ought to be in his power to create.


There does not appear to be anything in the Clause which declares the contract void, but if the effect is to make the contract invalid, then I think there is something to be said for some such provision as the Amendment. It might well be to the interest of the consumer that he should be able to call upon the coal proprietor to fulfil his contract at the legal price. In the interests of the buyer, I think something of this sort is necessary.


The Bill imposes a penalty, and there is high authority for stating that where a Statute imposes a penalty there is no other remedy. All the Bill says is that the coal shall not be sold beyond a certain price. You cannot take action against the coal, it must be against a man. The Bill does not say that the contract is void, but I do not doubt if this came before a Court the Court would somehow or other try to find some way of saying that the contract was void. These words will inferentially make the point quite clear. If the Government can accept an Amendment substantially to this effect, I think it will make the position a great deal clearer in law and more equitable.


After what has been said on the point raised by the hon. and learned Gentleman (Mr. S. Roberts), and after what has been said by my hon. Friend who has just sat down, I think there is something to be said for inserting an Amendment similar to this. I do not think it would be advisable for us to take it exactly in this form, and I propose as the most convenient course to accept this Amendment now and I shall put down Amendments to it on the Report stage.

Amendment agreed to.


I beg to move, at the end of the Clause, to insert the words, Provided that nothing in this Section shall prejudice any owner of coat at the pit's mouth in the sale of coal by him elsewhere than at the pit's mouth as a merchant in competition with other coal merchants. Unless an Amendment of this kind is passed, the owner at the pit's mouth who also acts as a coal merchant would be in a very unfair position as compared with the coal merchant. He would have his office in London or elsewhere, with an agent or salaried man or perhaps paid on commission, and while the merchant might get 5s., the man to whom I refer could only ask for 4s. It seems to me that in that case he would try and sell at a higher price or export his coal, or do something else with it. I think from every point of view we ought to put the coal owner on the same basis as the competing coal merchant. It seems to me that there is no reason why a man who happens to be a coal owner should not, when he acts as a coal merchant as well, have a sufficient price to cover the extra expenses which he incurs as a coal merchant.


The object which the hon. Baronet has in view is quite obvious, and I think it is covered by the phrase "under similar conditions," which has now been given a further value by the insertion of words making the Sub-section read, "this Section shall apply (both as regards the price at which coal is sold or offered for sale and as respects the corresponding price), etc." These phrases-taken in conjunction provide for the point raised by the hon. Baronet and will make the comparison a fair one.

Amendment, by leave, withdrawn.

Clause, as amended, ordered to stand part of the Bill.