Yorkshire Miners' Association And Others v. Howden and Others [1905] UKHL 868
(Before the Lord Chancellor (Halsbury) , Lords Macnaghten , Davey , James of Hereford , Robertson , and Lindley .)42 SLR 868Yorkshire Miners' Association And Others v. Howden and Others.( On Appeal From The Court Of Appeal In England .)
Subject_ Trade Union — Misapplication of Funds — Action for Injunction by Individual Member of Union — Trade Union Act 1871 (34 and 35 Vict. c. 31), sec. 4, sub-sec. 3. Facts:A miners' association, registered under the Trade Union Act 1871, made certain payments from its funds to its members, who were out of employment, in circumstances which involved a direct contravention of the rules of the association. Held (Lords Davey and James of Hereford diss. ) that an action was maintainable by an individual member of the association against the association and its officers for an injunction to restrain such a misapplication of the funds, inasmuch as the action was not a legal proceeding instituted with the object of directly enforcing an agreement for the application of the funds of a trade union to provide benefits to members, within the meaning of the Trade Union Act 1871, section 4, sub-section 3.The Trade Union Act 1871 provides as follows:—Section 4—“Nothing in this Act shall enable any Court to entertain any legal proceeding instituted with the object of directly enforcing or recovering damages for the breach of any of the following agreements, namely—… (sub-section 3) any agreement for the application of the funds of a trade union (a) to provide benefits to members.”Disputes having arisen between the miners employed in the Denaby and Cadeby Collieries Company's pits and their employers, which resulted in a strike or lock out, the Yorkshire Miners' Association, registered under the Trade Union Act of 1871, made certain payments of “strike pay” to those of its members who had been thrown out of employment. How-den, a member of the Yorkshire Miners' Association, brought an action against the association and their general treasurer and branch treasurers for an injunction to restrain the defendants from misapplying the funds of the association or dealing with them in a manner contrary to the rules of the association and the provisions contained therein. While the case was before the Court of Appeal, the trustees of the association were added as defendants. It was clear from a consideration of the rules of the association and the special facts and circumstances in which the strike had occurred that the payment of strike pay was a direct violation of the rules of the association, and the real point at issue in the case was whether the action was excluded by section 4, sub-section 3, of the Trade Union Act of 1871.The Court of Appeal ( Williams , Stirling , and Mathew, L.JJ. ), upon an application by the Yorkshire Miners' Association for a judgment or for a new trial in an action tried by Grantham, J. , with a jury, held that the action was not excluded and granted an injunction, and the Yorkshire Miners' Association appealed to the House of Lords.At delivering judgment—
Lord Chancellor (Halsbury) —In this case the plaintiff, a member of the Yorkshire Miners' Association, a trade union registered under the Act of 1871, complains that the funds of that society are being diverted from their proper object, and seeks by injunction to prevent that misapplication. It appears to me that the sole question in this case is whether the plaintiff is at liberty to bring the action, or whether the action is one which is prohibited by the provision in the Act of 1871, which provides that nothing in the Act shall enable any court to entertain any legal proceedings with the object of directly enforcing or recovering damages for the breach of any of the following agreements,Page: 869 ↓
Lord Macnaghten —I cannot help thinking that if the plaintiff had only taken the trouble to indicate in his writ or in a statement of claim the ground of his complaint, and if, instead of laying his case before a jury, he had resorted to a tribunal more familiar with the subject, and perhaps better fitted to deal with it, some confusion and a good deal of delay and expense would have been avoided. The case in itself when understood is, I think, simple enough. Was the matter of which the plaintiff, as a member of the Yorkshire Miners' Association, complains, beyond the powers of the association? Was the plaintiff in his isolated position—one member of the association standing alone—entitled to sue? Is the fact that the association is a registered trade union a bar to relief in such an action? These, I think, are the only questions to be considered, and there is only one of them, as it seems to me, that gives rise to any difficulty. The Trade Union Act 1871 requires that the rules of every registered trade union shall contain provisions in respect of the several matters mentioned in the 1st schedule to the Act. Among those matters are included “the whole of the objects for which the trade union is established,” and “the purposes for which the funds thereof shall be applicable.” Now, the rules of the Yorkshire Miners Association as registered set forth in plain and distinct language the objects of the association and the purposes for which its funds may be applied. Clause 3, sub-section ( j ), declares that the whole of the moneys received by the association shall be applied in carrying out the objects specified in the preceding sub-sections in accordance with the rules. In an earlier clause (clause 1) there is an express direction that the funds of the association shall not be appropriated to any other use. It is therefore beyond the powers of the association to apply its funds or any part of them to any purpose not authorised by its rules. Was, then, the payment of strike money in the present case authorised by the rules of the association? On this point your Lordships did not think it necessary to call upon the respondent. The question is fully discussed and completely disposed of by the opinions of the learned Lords Justices in the Court of Appeal, and I have nothing to add to what they said. Then if the action of the association, which was challenged by the plaintiff, was beyond the powers of the association, it seems clear, apart, of course, from any objection arising under the Act of 1871, that in an unincorporated societyPage: 870 ↓
goes much further. The words are—“3 Any agreement for the application of the funds of a trade union—( a ) to provide benefits to members.” At first sight it is not very easy to see why the clause took this shape. I cannot help thinking that it comes from the apprehension which the leaders then felt of the extreme danger to their combinations which might result from any attempt to separate the funds of the union, distinguishing between those collected or intended for benevolent purposes and those collected or intended for ordinary trade purposes. Then I come to the question, What was the “object” of the present litigation? Was it to enforce an agreement for the application of the funds of the union to provide benefits to members? I should say certainly not. The object of the litigation was to obtain an authoritative decision that the action of the union which was challenged by the plaintiff was not authorised by the rules of the union. The decision might take the form of a declaration or the form of an injunction, or both combined. But the decision, whatever form it might take, would be the end of the litigation. No administration or application of the funds of the union was sought or desired. The object of the litigation was simply to prevent misapplication of the funds of the union, not to administer those funds, or to apply them for the purpose of providing benefits to members. I am aware that in expressing this view I am dissenting from the opinion of Jessel, M.R., in the case of Rigby v. Connol ( Ubi Sup. ) In that case, after referring to sec. 4, sub-sec. 3 ( a ), of the Act of 1871, which is quoted inaccurately by the learned judge, or it may be by the reporter, his Lordship makes the following observation:—“I am satisfied that the agreement contained in the rules is an agreement to provide benefits for members, and that if I decide in favour of the plaintiff I directly enforce that agreement, because I declare him entitled to particpate in the property of the union, and the only property they have is their subscriptions and fines, and I restrain the society from preventing that participation. It seems to me that is directly enforcing that agreement; in fact, it is in substance directing and enforcing the specific performance of it, nothing more or less.” There, I think, the learned judge departs rather widely from the language of the enactment. If the Act had said that no court should enforce an agreement to provide benefits for members, there would have been an end of the matter. But the Act does not say that, nor, I think, anything like it. It is not every trade union agreement that the Court is forbidden to enforce. The effect of Jessel, M.R.'s observations in conjunction with the cases of unenforceable contracts specified in the Act make trade union agreements one and all alike unenforceable. There is really nothing left. The Act, however, proposes only to strike at certain agreements, leaving, at least apparently, the jurisdiction of the Court untouched as to everything else. In making these remarks I do not wish to be understood asPage: 871 ↓
Lord Davey —The plaintiff in this action is an individual member of a trade union registered under the provisions of the Trade Union Act 1871, and he sued the association, the general treasurer, and the two treasurers of the branches concerned, for an injunction to restrain them from misapplying the funds of the union and dealing with the same contrary to the rules of the said association and the provisions contained therein. The misapplication complained of is the payment of strike pay to certain members of the union who were on strike under circumstances which did not entitle them, according to the rules of the union, to the receipt of that benefit. I have come to the opinion that this action cannot be maintained by the plaintiff. The question turns on the proper construction to be put on the language of section 4 of the Act of 1871. By section 3 of that Act it is enacted that the purposes of any trade union shall not by reason merely that they are in restraint of trade be unlawful so as to render void or voidable any agreement or trust. The language is not quite accurate, but I think that the meaning and effect is to enable such actions to be brought on any agreement or trust affecting the union, or the rights of the members inter se , as might have been brought if the purposes of the union were free from the objection that they are in restraint of trade. By section 4, however, it is enacted that nothing in this Act shall enable any court to entertain any legal proceeding instituted with the object of directly enforcing or recovering damages for the breach of any of the following agreements, namely ( inter alia ), (3) any agreement for the application of the funds of a trade union ( a ) to provide benefits to members, subject to a proviso that nothing in the section is to be deemed to constitute any of the before-mentioned agreements unlawful. By section 8 all the real and personal property of the trade union is vested in trustees, and (9) the trustees or any other officer of the trade union who may be authorised to do so by the rules thereof are empowered to bring or defend any action, suit, prosecution, or complaint in any court of law or equity touching or concerning the property, right, or claim to property of the trade union. It is not denied that this action could not be maintained under the common law. The question therefore comes to be, whether it is “authorised by the provisions of section 3 of the Act,” as qualified by the provisions of section 4. I assent to the very just observation made by Mr Lush in the course of his able argument, that one should endeavour to give a meaning to every word in a statutory enactment. And I will endeavour to do so in construing the words of the section in question. I am of opinion that “an agreement for the application of the funds of a trade union to provide benefits to members” means an agreement to the benefit of which the members as such are entitled, and not merely a particular agreement with the individual who sues. Such an agreement is to be found in the rules by which the association is governed. These rules, in fact, form the social contract between the members, and every person on becoming a member accedes to them and is bound by them, and, on the other hand, is entitled to whatever benefits are thereby secured for members. The particular rules in this case are those numbered 64 and 65, which prescribe the conditions under which a member may become entitled to what I have called “strike pay.” Rule 3 ( j ) prescribes that “the whole of the moneys received by this association shall be applied to carrying out the foregoing objects according to rules.” But, even if there were not this rule, I should be of opinion that rules 64 and 65 are exclusive, or (in other words) that according to their true construction they mean that strike pay shall not be given except under the prescribed conditions, as well as that it may be given under those conditions. And I think that the negative stipulation is just as truly and as much part of the agreement for application of the funds to provide benefit to members as the affirmative stipulation. The next question is, What is “the object” of thisPage: 872 ↓
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Lord James of Hereford —I have entertained considerable doubt as to the decision that should be arrived at in this case, but in the result I have come to the conclusion that the appellants are entitled to succeed in their appeal. The circumstances under which this action has been instituted have already been fully stated to your Lordships, and I shall only briefly refer to them. The first question to be determined is whether the 4th section of the Trade Union Act 1871 prevented the action under discussion from being brought. That Act amounted to a very charter of legal existence. Before the passing of it trade unions had no legal recognition. The Act effected it, but at the same time did not afford access to the public legal tribunals for all purposes. For some purposes the trade unions were left to determine their own differences, and so section 4 provided “that nothing in this Act shall enable any Court to entertain any legal proceeding instituted with the object of directly enforcing or recovering damages for the breach of any of the following agreements:—… (3) An agreement for the application of the funds of a trade union ( a ) to provide benefits to members, or ( b ) to furnish contributions.” Mathew, L.J., in his judgment, terms this section “a remarkable relic of prejudice.” It was rather the result of great legislative timidity. If the legalisation of trade unions could no longer be resisted, a modified legalisation only, the Legislature said, should be conferred upon them. The courts of law should not be called upon to enforce certain rights of members amongst each other. Trade unionists must manage their own internal affairs as best they could amongst themselves. Now, your Lordships have to determine whether the plaintiff's action was duly brought before the Court, or whether it comes within the prohibition contained in section 4 of the Act of 1871. We must first ascertain the purposes for which the action was instituted. The record affords us but little assistance. Save the writ there are no pleadings. But from the writ we gather that the action was brought by the plaintiff as a member of a registered trade union against that union and its officers for the purpose of restraining them by injunction from misapplying the funds of the association contrary to its rules and the provisions contained therein. But the plaintiff, on his evidence given at the trial before Grantham, J., stated that he had brought the action because, being entitled to the benefit of the funds of the trade union, he desired to protect them and have them used in a right way and according to the rules of the association. The plaintiff also based his claim for an injunction on the ground that the defendants wrongly applied the funds of the association and intended to apply them in making payments to members of the union who had struck work, and that such strike was contrary to the rules of the association. In order to sustain the case the plaintiff had to rely upon the rules of the union. These rules form the constitution of the association, and by these terms all the members of it are bound. Both the member's contributions and the benefits which he is to receive are contributed by and dealt with under these rules—of which Nos. 2, 3, 62 and 64 are the principal in relation to this case. Rule 2 states—“These rules shall be for the government of the association and the protection of the members.” Rule 3 sets out the objects for which the union was established—( a ) To raise funds for mutual help; ( c ) to secure the fines and wages bargained for by the members, and to protect members when unjustly dealt with by the masters or managers; ( g ) to provide a weekly allowance for the support of members and their families who may be locked out or on strike; ( h ) an allowance to all full members, half members, and members' wives at death who are financially on the books; ( j ) the whole of the moneys received by the association shall be applied to carrying out the foregoing objects, subject to the rules. Then rules 64 and 65 provide for the conditions under which a strike may be constituted and carried on. Now these rules appear to me to constitute an agreement between the members of the union to the effect that it shall be carried on in accordance with the terms and conditions set out in such rules. It now remains to be determined whether the suit is a legal proceeding instituted with the object of directly enforcing an agreement for the application of the funds of a trade union to provide benefits to members. In substance the plaintiff is seeking to prevent the defendants from breaking the rules of the union—that is, from breaking the agreement created by those rules. He bases hisPage: 875 ↓
Lord Robertson —I am of opinion that the judgment appealed against is right. My construction of the statute is that adopted by the Court of Appeal, and I cannot usefully add to what has been said by the learned Judges there and in this House in support of that view.Lord Lindley —Before the Trade Union Act 1871 was passed trade unions were unincorporated societies, not recognised as legal, and in that sense at least they were held to be illegal, on the ground that their objects were to restrain freedom of trade, and were against public policy. Neither courts of law nor courts of equity would recognise or enforce the rules of such societies, or the trusts on which their funds were held. By the Act in question trade unions were freed from the illegality which was the consequence of being regarded as against public policy (section 2). Their rules and trusts can no longer be treated as invalid by reason of their being in restraint of trade (section 3). They may be illegal, or unenforceable on some other ground, and if they are, the Act of 1871 does not in any way legalise them or affect them. But the Act of 1871 does more for trade unions than remove the consequences of being regarded as illegal societies; it allows them to a great extent to manage their own affairs free from the control of the ordinary courts of the country (section 4), and enables them to register themselves under a name (sections 13 and 14, and schedule 1), and to obtain summary redress against their officials in case of misconduct (section 12). Further, it enables them to hold property by trustees (section 8), and enables the trustees to sue and be sued in respect of such property (section 9). One thing, however, the Act of 1871 did not do. It did not incorporate trade unions even when registered under the Act with a name. A trade union holds property by trustees but, as it is not incorporated, there is no one legal person or entity in whom the beneficial interest in the property of a trade union is vested. The beneficiaries are its members collectively and severally. This is plain from section 8, which vestsPage: 876 ↓
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Appeal dismissed.Counsel for the Appellants— Rufus Isaacs, K.C.— Danckwerts, K.C.— Compston. Agents— Corbin, Greener, & Cook, Solicitors.Counsel for the Trustees— Atherley Jones, K.C.— R. E. L. Vaughan Williams. Agents— Marsh, Sherwood, & Hart, Solicitors.Counsel for the Respondents— Montague Lush, K.C.— Waddy— H. W. Wilberforce. Agents— Steadman, Van Praagh, & Gaylor, Solicitors.
Cited in 1 later judgment