CLAUSE 35.—(Application to Crown.) (Hansard, 9 December 1946)

§ Colonel Crosthwaite-Eyre
I beg to move, in page 24, line 28, to leave out Subsection (2)
I move this Amendment for the purpose of trying to discover the exact purpose of this Subsection. It seems that it is the intention to make all provisions in this Bill binding upon the Dominions, and all regulations or orders that are made under the Bill can be applied to the Dominions without reference to the Dominion Governments concerned. Only a short time ago we heard the Chancellor announce the most sweeping relaxations, on Clause 31, as far as the Dominions are concerned. That increases my hesitation 826 in moving this Amendment, because I feel that the interpretation I have placed on it cannot be the correct one. However, on the face of this provision, it appears that the Government intend to go completely against the provisions of the Statute of Westminster, and to make obligatory on the Dominions something passed by the House. Therefore I should be very grateful if the Solicitor-General would tell us what is intended by Subsection (2).

The Solicitor-General
This provision does not infringe the provisions of the Statute of Westminster. The relevant Section of the Statute would be Section 4, which prevents the Imperial Parliament from enacting legislation which affects the Dominions in the Dominions. The object of this Clause, in so far as concerns the reference to the Dominions and Government departments, is that those representatives of the Dominions who are physically in the United Kingdom should, while they are in the United Kingdom, comply with the obligations imposed by this Bill when it becomes an Act. In so doing, there is nothing that would in any way infringe the Statute of Westminster or offend against the sovereignty of the Dominions. For example, if the Crown Agent of a Colony here wanted to buy American goods and to acquire American currency for that purpose, he would have to obrain the currency in this country from an authorised dealer.

§ Mr. Stanley
Such a person would not be a person acting on behalf of any of His Majesty's Governments outside the United Kingdom.

The Solicitor-General
I mentioned the Crown Agent of a Colony as an example.

§ Mr. Stanley
He would not come under Subsection (2).

The Solicitor-General
I was saying that the Clause in this respect has no application except in relation to a person who is physically here.

§ Mr. Stanley
What, then, is the meaning of the word "Department" in Subsection (2)?

The Solicitor-General
If the right hon. Gentleman will look at other Clauses, he will find that this provision imposes obligations only upon persons resident in, or physically in, the United Kingdom. It will apply to representatives of the 827 Dominions, as to representatives of the Colonies, who are physically in the United Kingdom, and it will not in any way bind the Dominions in Dominion territory itself.

§ Colonel Crosthwaite-Eyre
I do not pretend to be a lawyer, but can the Solicitor-General tell me how he construes Subsection (2) as having that meaning, because, as I read it, it applies to any person or department acting on behalf of any of His Majesty's Governments outside the United Kingdom? From where does the Solicitor-General get the statement that it applies only to people who are resident in the United Kingdom?

The Solicitor-General
There is no Clause in the Bill which imposes obligations except upon persons either resident in, or physically in, the United Kingdom at the time. If the hon. and gallant Gentleman will look at various Clauses, he will see that they impose various obligations, but the obligations they impose are either upon persons resident in the United Kingdom; or, if they are not resident in the United Kingdom, on people who are, in fact, physically here at the moment. The result of this, read together with Clause 35, is simply that representatives of Dominions Governments who are physically here at the time when the obligation comes into question, are bound by the Bill, and nobody else is bound, because the Dominions Governments themselves are in the Dominions. That is why the Clause operates only to bind representatives of the Dominions in this country.

§ Mr. Birch
If the hon. and learned Gentleman will look at Clause 42 (5), he will see the following provision: The obligations and prohibitions imposed by this Act shall, subject to the express limitations contained therein, apply to all persons, notwithstanding that they are not in the United Kingdom and are not British subjects. That appears to apply to the whole Bill, and slightly goes against the Solicitor-General's contention that this Bill applies only to British subjects or persons in the United Kingdom.

The Solicitor-General
Clause 42 (5) uses the words: subject to the express limitations contained therein. 828 The express limitations throughout the Bill, in various Clauses, have reference to those persons who are in the United Kingdom physically, whether they are British subjects, or whether they belong to any other nationality, or, in the alternative, if they are not in the United Kingdom physically at the time, they must be resident in the United Kingdom. Therefore, if the hon. Gentleman will take Clause 5, for instance, the provisions of the Bill are imposed only upon such persons, and inasmuch as representatives of the Dominions Governments can only be either resident here or physically here, and therefore, can be bound only in that way, it is only they who are affected, and no Dominion Government can be affected.

§ Mr. Stanley
If, as the Solicitor-General says, it is true that nowhere in the Bill is there any obligation or prohibition imposed except upon somebody who is resident in this country, what is the purpose of Clause 42 (5), to which my hon. Friend has just referred? What is the good of saying: The obligations and prohibitions imposed by this Act shall, subject to the express limitations contained therein, apply to all persons when, in fact, we are now told the limitations are such that they cannot in any circumstances apply to anybody who is not resident in the United Kingdom? Either the Solicitor-General is mistaken, which I should hesitate to suggest, or Clause 42 (5) is sheer nonsense.

§ Mr. H. Strauss
There is one additional point apart from that raised by my right hon. Friend the Member for West Bristol (Mr. Stanley), and it concerns Clause 41 (2). There the Solicitor-General will see that, in addition to the very important question put by my right hon. Friend, there is power to declare that anybody, although outside the United Kingdom, can be treated as resident within the United Kingdom, or, if within the United Kingdom, can be treated as resident without. I thought that possibly, in dealing with my right hon. Friend's question, the Solicitor-General might say how his argument is affected by that subsection.

The Solicitor-General
With regard to Clause 42 (5), all that that provision says is that, once you have got persons who are within the ambit of the Measure, it is 829 subject to the express limitations contained therein. It applies only to such persons who, by other Clauses, are brought within the ambit of the Bill, and it says, with regard to them, that notwithstanding the mere fact that they are not British subjects, or that they are not physically within the United Kingdom by reference to the time by which the question arises, the obligation rests on them. It says no more than that. Therefore, one has to look elsewhere for the obligations themselves, and those obligations are imposed upon the two classes of persons, those who are in the United Kingdom, or resident in the United Kingdom. Nobody else is effected.

§ Mr. Stanley
Then the meaning which the Solicitor-General has attributed to Clause 42 (5) is the exact contrary to the words which he used. The words which he used were "Everybody should be subject to it under the express limitations in the Bill," but they shall not be subject to it.

The Solicitor-General
No. I have already put the point but I had better do it again. When we are construing Subsection (5) as to what are the limitations it contains we find that two are indicated. The Bill imposes obligations upon persons who are in or are resident in the United Kingdom. Once an individual concerned falls within one of these two classes, the mere fact that he is not a British subject or the mere fact that he is not resident in the United Kingdom, or that he is not physically in the United Kingdom at the time when the question arises shall not prevent the obligation resting upon him. That is all Subsection (5) says. We have first to get a person who is either in or resident in the United Kingdom. When we get a person who is resident in the United Kingdom the mere fact that he is not physically in the United Kingdom does not relieve him of complying with the obligation which the Bill imposes upon him. I hope that is clear.

§ Mr. Stanley
I do not think it is.

The Solicitor-General
I am sure it is my fault. I will start again and endeavour to make out what Subsection (5) does. If we look at the Clause we find what are the limitations contained therein. We find, to put it broadly, that there are two limitations and the Clause applies to 830 either. They are persons who are in or persons who are resident in the United Kingdom. It is no excuse on the part of a person who is in the United Kingdom but is not a British subject, for him to try to get out of the obligation by saying he is a foreigner. Equally so, a person resident in the United Kingdom cannot say, "Admittedly I am resident in the United Kingdom, but at the moment when you sought to impose the obligation on me, I was outside the United Kingdom." The Bill applies to that person. I hope I have explained the position to the satisfaction of the right hon. Gentleman.

§ Mr. Stanley
I entirely understand now what the hon. and learned Gentleman desires the Subsection to mean, but I do not see how the words used in the Clause can possibly mean that.

The Solicitor-General
It is my submission that the meaning I have attributed to it is the correct meaning. Once a person is subject to the express limitations contained therein—and I hope the Committee will accept that that is right—we go back to the submission of the hon. and gallant Member for the New Forest and Christchurch (Colonel Crosthwaite-Eyre). I think then that the conclusion emerges perfectly clearly that it does not apply to Dominion Governments as Dominion Governments in the territories of the Dominions, It simply applies to representatives of those Dominions who fulfil the qualification of residence in or who are physically in the United Kingdom at the time by reference to which the obligation arises. Therefore, the Bill does not in any way infringe the provision of Section 4 of the Statute of Westminster.

§ Mr. H. Strauss
What about Clause 41 (2)?

§ Mr. I. J. Pitman (Bath)
The main issue raised by the Solicitor-General is the question of the physical presence of the agent of the Dominion Government here in England. If he will turn to Clause 5, I think he will see that the words used are "No person shall." It does not say resident in the United Kingdom, and the point made by the hon. and gallant Member for the New Forest and Christ-church (Colonel Crosthwaite-Eyre) is more or less this. Let us suppose that the Australian Federal Government have 831 an account in the Bank of England, and under Clause 5 (a) they instruct the Governor of the Bank of England to pay a certain sum to the account of the United States in Washington. It seems to me perfectly clear that that is invalidated by this provision, and I should like to ask whether that is not a case in which the physical presence has nothing to do with it, and in which in point of fact, this violates the rights of the Dominion Governments under the Statute of Westminster in the Section which has been mentioned.

The Solicitor-General
In Clause 5 we see what the limitation is. It is that no person shall do any of the following things in the United Kingdom. That is to say that payment made in the United Kingdom would require permission. An agent of the Australian Government in the United Kingdom who has to make a payment in the United Kingdom would be restrained from doing it unless he had the requisite permission, and there is nothing in the Statute of Westminster which prevents that obligation being placed upon him. The broad effect of Section 4 of the Statute of Westminster is that the Parliament of Great Britain cannot legislate for the territories of the Dominions, and that is not in conflict with what I have just said.

§ Mr. J. Foster
I am not quite sure of this. Assuming the Australian Government arranged the transaction in Australia by which a payment was to be made in the United Kingdom, would it not be contrary to Clause 5? Let us assume they decided in Australia to make a payment to America. They would ask us through their agents in London to transfer block sterling to America. They cannot do that because of Clause 5. The transaction is in Australia and they are persons under Clause 5 combined with Clause 35 who are persons outside the scheduled territories and are not resident in the United Kingdom, who are asking for this request to be made. Clause 35 says that the Bill shall apply "to transactions by a Government Department." The transaction I have mentioned is by a Government, Department. It is a transaction by a Government Department of one of His Majesty's Governments outside the United 832 Kingdom. It is made in Australia, but under Clause 5, which says: No person shall do any of the following things. It is invalid, yet here is a person in Australia doing one of them. Therefore, it seems to me that the effect of these two Clauses together makes a transaction in Australia invalid. I see what the Solicitor-General aims at, and I sympathise with his object, but I am not sure, if we take these two Clauses together and take the transaction actually made outside the United Kingdom, whether it is not a fact that it offends against Clause 5. I understood it had an extra-territorial effect, but it does not say in this Bill if there is to be any extra-territorial effect at all.

The Solicitor-General
It depends on what is meant by extra-territorial effect. A person who is resident here but is outside the United Kingdom is under an obligation under this Bill. In that instance it has an extra-territorial effect. Nothing in this Bill prevents the Australian Government giving any instruction to their agent, but it does prevent him complying with it in certain circumstances unless he has got the requisite permission. It is a question then of whether what is imposed on the agent has the same effect in invalidating transactions under Australian law. That is a question of Australian law, and this Bill does not in any way affect the provisions of Australian law. It is exactly the same case as if instructions were given from this country to an agent of the British Government in a foreign country who could not carry out those instructions. The question as to whether those instructions were valid would have to be determined by reference to the law of this country. The same would apply to instructions given in Australia. With great respect I maintain that the position is that this does not affect Australian law in the least. It cannot alter Australian law and, although it can produce certain results in England which may have an effect on contracts negotiated in Australia, the effects have to be decided by Australian law and are not in any way affected by the law of this country.

§ Mr. J. Foster
Of course, that is the law, but Clause 35 (1) says: This Act shall bind the Crown and shall apply to transactions by a Government Department. … 833 It is quite true that under Australian law and the Statute of Westminster the Australian Government would reject the application of this Measure to their transactions, but we are looking at the matter not from the point of view of Australian law but from the point of view of what this Clause purports to do. It purports to make a transaction by a Government Department invalid under certain conditions We then have to see whether every Clause in the Bill is watertight so that in no case does it make such a transaction valid. My hon. Friend the Member for Bath (Mr. Pitman) has, I think, put his finger on a transaction which is made invalid when effected outside this country. The moment we have that, the Clause purports to make a transaction valid if effected outside this country, and if it is done by a Government Department of a Dominion. I quite agree with the Solicitor-General's general proposition, but I think the Clause runs counter to it.