Kirkwood v. Gadd [1910] UKHL 689
(Before the Lord Chancellor (Loreburn) , Lords James of Hereford , Atkinson , Shaw , and Mersey .)48 SLR 689Kirkwood v. Gadd.Subject_ Loan — Moneylender — Registered Address — Carrying on Business — Moneylenders Act 1900 (63 and 64 Vict, c. 51), sec. 2 (1) ( b ). Facts:In a moneylending contract a bill of sale was executed at the borrower's house over his furniture, and the loan itself was advanced and a receipt granted there. The preliminary arrangements had been made by correspondence to and from the moneylender at his registered address — no other address was employed. The Moneylenders Act 1900, sec. 2 (1) ( b ), enacts — “a moneylender … shall carry on the moneylending business … at his registered address or addresses, and at no other address.” The borrower raised legal proceedings in which he maintained that the moneylending contract was void as in breach of this prohibition.Held that the prohibition against carrying on business at an address other than the registered address raised a question of fact to be determined by the whole circumstances of each case, and that the carrying out of incidents of the transaction away from the registered address did not in itself constitute a breach of the Act.in the circumstances stated fully in rubric supra , and in their Lordships' opinions. The Court of Appeal ( Moulton and Farwell , L.JJ.) granted against the appellant an interim injunction from putting the bill of sale into force.The appellant, who was a registered moneylender, was the holder of a bill of sale over certain furniture, executed by the respondentPage: 690 ↓
The appellant appealed.Their Lordships gave considered judgment as follows:—
Lord Chancellor (Loreburn) —In this case an interim injunction has been granted by the Court of Appeal to prevent a moneylender from taking possession under a bill of sale, upon the ground that the agreement for the loan, the advance of the money, and the taking of the security, were all transacted, not at the moneylender's registered address, but at the borrower's private residence. It was so in fact upon the materials before us, but some letters making the appointment at the borrower's residence with a view to arranging the loan were written to and received from the registered address. Your Lordships are asked to say whether or not the arrangement of the loan in this way was contrary to the Moneylenders Act 1900. I expressly limit my opinion to that point, which alone has been argued before us. The 2nd section of the Act, sec. 2(1) ( b ), requires that a moneylender “shall carry on the moneylending business in his registered name, and in no other name and under no other description, and at his registered address or addresses, and at no other address.” Section 2(2) also provides that “If a moneylender … carries on business … elsewhere than at his registered address, or fails to comply with any other requirement of this section,” he shall be liable to fine, or imprisonment for a second offence, as prescribed. This enactment contains a positive, that the man shall carry on the business at the registered address. It also contains a negative, that he shall not carry on business elsewhere. What is carrying on business? It imports a series or repetition of acts. Each separate piece of business may consist of many stages and incidents, and the business as a whole comprises many separate pieces. This Act of Parliament cannot mean that every stage and every incident of every piece of the moneylending business is to be transacted at the registered office. That would be impossible, for such things as making inventories or taking possession of furniture under a bill of sale are part of the business, and must be done where the goods are situated. Nor can it be intended to prohibit the employment of clerks and agents, or the transaction outside the registered address of every single thing that could by possibility be transacted within it. That would be needlessly oppressive, and would strain the words. We must look at the nature of the mischief disclosed according to the approved canons of statutory construction. The mischief is that this dangerous business may be conducted by persons under false names or a variety of names without the security of an ascertained address, or at places where men may be taken unawares or off their guard. The words, which are in terms general, must be applied accordingly. I do not propose to define what is meant by carrying on business lest I may facilitate evasion. But I do think that if a moneylender really deals with a borrower at his registered address, whether by interview or correspondence, he may, without infringing the Act, transact negotiations or conclude the actual contract elsewhere. If, however, the moneylender employs an agent to frequent markets, or to call upon individuals in order to procure borrowers, and thereupon a moneylending transaction, even a single transaction, goes through without the borrower being brought into communication with the registered address till after the transaction is completed, it might amount to carrying on business elsewhere than at his registered address. There may be many cases betwixt and between. It is always a question of fact, the answer to which depends on the circumstances of the case. I can see that nice points may arise in applying this section of the Act. It must be so inevitably when general language of this kind is used in the Act. But such points are not matter of law if there is evidence to support the conclusion. They are points of fact and should be so regarded. I do not think that this is a case in which an interim injunction should be granted. So far as I can see on the materials before us this piece of business was directed and controlled at the registered address, and the borrower dealt with the lender at the registered address. I do not prejudge it, however, and it must be decided on actual evidence at the trial. As there are other matters to be disposed of at the hearing which were not argued here, the parties have agreed to an undertaking, and I move your Lordships to dissolve the injunction, all costs here and below to be costs in the cause.Lord James of Hereford —It is necessary in order to determine the question raised by this appeal that the facts controlling the case should be ascertained and stated. In February 1908 the appellant John Kirkwood was carrying on the business of a moneylender at Ipswich, and for the purpose of doing so had registered an address, “No. 30 Upper Brook Street, Ipswich.’ On the 2nd February 1908 one Dobson, a commission agent, wrote to the appellant stating that the respondent required a loan of £100, giving a bill of sale on his furniture as security. In this letter, which was sent to the above address, Dobson assumed that the appellant would send an agent to Ilford, where the respondent resided. After some delay the transaction was carried out. What occurred is apparently correctly stated in the appellant's case as follows—“In due course the said Herbert Sandoe” (the appellant's agent) “called upon the respondent at the residence of the respondent, No. 59 Mayfair Avenue, Ilford, in the county of Essex, and the terms of the proposed loan were then arranged between the said SandoePage: 691 ↓
Page: 692 ↓
Lord Atkinson —The appellant in this case is a moneylender. He is duly registered under the Moneylenders Act. His registered address at Ipswich at the date of the loan hereinafter referred to made by him to the respondent was No. 30 Upper Brook Street. It is now No. 64 St. Matthew's Street. His registered name is “The Provincial Union Bank.” The appellant has other registered addresses, but this is the only one of which it is material to take note for the purposes of this appeal. The respondent, who is a retired bank manager, residing at No. 59 Mayfair Avenue, Ilford, carrying on the business of an insurance broker in the city of London, in the month of February 1908 put himself into communication with one Dobson, who is described as a “commission agent” by the appellant's counsel, and as a “moneylenders' tout” by the respondents, to obtain for him a loan of £100, secured by a bill of sale of his furniture. It does not appear whether the respondent directed Dobson to deal with the appellant in particular, or whether he was Dobson's selection. The respondent must, however, have furnished Dobson with an inventory of the furniture which was to be included in the bill of sale and disclosed to him some particulars of his financial position. The negotiation which culminated in the loan and the bill of sale which has been impeached as illegal and void was initiated by the receipt by the appellant at his registered office at Ipswich of a letter from Dobson inclosing the inventory, setting forth the particulars above mentioned, and applying on the respondent's behalf for the desired loan. On the 15th February 1908 one Herbert Sandoe, the appellant's manager, wrote to the respondent the following letter — “Provincial Union Bank, 30 Upper Brook Street, Ipswich.—Feb. 15, 1908.—Mr A. E. Gadd.—Dear Sir,—With reference to your application for an advance per Mr Dobson, we have instructed one of our officials to call upon you on Monday morning about 11·30, when kindly arrange to be at home, and if you have not already ascertained the exact amount which the Metropolitan Company will accept in settlement of your bill of sale, please get this information before our official arrives. — Yours truly, Herbert Sandoe, Manager.” A reply to this letter in the terms following was received by the appellant at his registered address, No. 30 Upper Brook Street, Ipswich—“59 Mayfair Avenue, Ilford, Essex.—Feb. 15, 1908.—The Manager, Provincial Union Bank, Ipswich.—Dear Sir, — I beg leave to acknowledge the receipt of your favour of yesterday's date, and to say that I will be at home to-morrow (Monday) at 11·30 a.m. to meet your representative as desired.—I am, yours faithfully, A. E. Gadd.” It appears that Sandoe was not able to keep this appointment. He accordingly sent to the respondent a letter dated the 17th February 1908, and addressed as the previous letter had been from the appellant's registered address, to which the respondent replied by telegraph—“Will be at home.—Gadd, Ilford.” This telegram was addressed “Advance, Ipswich,” the telegraphic address of the appellant, and was received at No. 30 Upper Brook Street. Sandoe accordingly attended at the respondent's residence on the 20th February, and brought with him the bill of sale and the money to be lent. He got the former executed and handed over the latter, obtaining therefor a receipt, and presumably checked the inventory. In the bill of sale the grantee is described as “The Provincial Union Bank, 30 Upper Brook Street, Ipswich, of which bank John Kirkwood, of the same place, is sole proprietor.” In view of these facts there is not and there cannot be a pretence for suggesting that the identity of the appellant was in any way concealed. The respondent knew his registered name, his registered address, and the nature of the business which he purported to carry on there. These are the very things which it was in my view the design and purpose of the Moneylenders Act to have brought home to the knowledge of those who borrow from moneylenders. The special mischief against which that statute was directed does not exist in this case. The borrower, therefore, had all the information which was necessary to enable him to ascertain with certainty who the person was with whom he dealt, and the place where that person purported to exercise his calling. It is quite true that the final stage of the transaction, the handing over of the money, and the perfecting of the security, was completed at the borrower's address, and not at the moneylender's registered address; but all the earlier stages of the transaction were carried out by a correspondence addressed to and written from the borrower's address and the lender's registered address respectively; the whole dealing was brought into touch with the registered address at every stage, and indeed it was, as I understood, admitted by the respondent's counsel in argument that had the money been paid to his client by the appellant's cheque sent by post, and had the draft bill of sale also been sent by post to his client, executed byPage: 693 ↓
Page: 694 ↓
Lord Shaw —I have had considerable doubts in this case. In the judgments to which I have had the pleasure of listening, and have also had the pleasure of reading, I observe that a definition of what is “carrying on business” under this statute is avoided. I observe, further, that certain proceedings will have to be taken in this cause in order that the facts may be more fully investigated. Under those circumstances I most entirely agree with the judgment delivered by Lord James of Hereford. It does appear to me that each case must depend upon its own facts, the elementary principle being kept in mind that the Act is to be enforced in all respects and in no respect evaded.Lord Mersey —The facts of this case are as follows:—The appellant Kirkwood is a moneylender. His place of business is at No. 30 Upper Brook Street, Ipswich, and his trade name or description is “The Provincial Union Bank.” Both the name and the address are duly registered in accordance with the provisions of the Moneylenders Act 1900. On the 11th February 1908 a man named Dobson wrote a letter to Kirkwood and sent it to his place of business at No. 30 Upper Brook Street, Ipswich. The letter enclosed an inventory of some furniture upon which the owner desired to raise a loan. The name of the proposed borrower was not given in this letter, but it was furnished by Dobson a few days later in a telegram, which was also sent to Kirkwood's place of business. The telegram reads as follows:—“Alfred Ernest Gadd, 59 Mayfair Avenue, Ilford, Insurance and Mortgage Broker.” Having thus received the name and address of the proposed borrower, Kirkwood, by his manager, HerbertSandoe, wrote to Gadd to say that one of the officials of the so-called bank would call on Gadd with reference to the application for a loan. On this some further correspondence took place between Sandoe and Gadd, of which the outcome was that Sandoe met Gadd at Gadd's house on the 20th February, and there and then arranged the terms on which Kirkwood should make the loan. Having arranged the terms of the loan he proceeded to check the inventory of the furniture, and drew up a bill of sale which Gadd executed. It is sufficient to say of it that it describes the grantee as “The Provincial Union Bank, of 30 Upper Brook Street, Ipswich (of which said bank John Kirkwood, of the same place, is the sole proprietor),” and that the attestation clause describes the document as having been executed by Gadd “in the presence of Mr Herbert Sandoe, of 30 Upper Brook Street, Ipswich, manager of the Ipswich branch of the Provincial Union Bank, 30 Upper Brook Street, Ipswich.” Sandoe then paid the amount of the loan to Gadd and took a receipt. The correspondence so far as it consisted of letters written for or by Kirkwood was sent from or bore the address of the Provincial Union Bank, Ipswich, and it was to that place that Gadd sent the letters which he wrote. Dobson was paid a commission by Kirkwood in respect of the introduction of Gadd. This was the only transaction with Gadd, but it appeared that, although it was not usual to do so, the appellant had carried out transactions at the houses of borrowers on several other occasions. The instalments by which the debt was to be paid off fell into arrear, and on the 19th May 1909 Kirkwood threatened to seize the furniture under the power contained in the bill of sale. Thereupon Gadd issued a writ claiming an injunction to restrain Kirkwood from seizing, and also claiming a declaration that the bill of sale was invalid. On the same day Gadd applied ex parte to the Judge at Chambers (Hamilton, J.) for an interim injunction, and used an affidavit in support. This affidavit contains the following statement—“The whole of the transaction was carried out and completed at my private address, 59 Mayfair Avenue, Ilford; the alleged bill of sale being executed there and the money paid over.” The learned Judge refused to make any order. Next day, the 20th May 1909, the Court of Appeal granted leave to appeal, and on the 21st May the appeal was heard. The facts as I have stated them were either admitted or proved to the satisfaction of the Court, and the Court thereupon found that the transaction was bad on the ground that it amounted to a carrying on of business by the moneylender elsewhere than at his registered address, in contravention of sec. 2 of the MoneylendersPage: 695 ↓
Page: 696 ↓
Judgment appealed from reversed.Counsel for Appellant— Sir R. B. Finlay, K.C.— M. Lush, K.C.— M. Shearman, K.C.— W. de B. Herbert— J. B. Matthews. Agents — Windybank, Samuel, & Lawrence, Solicitors.Counsel for Respondent— F. Ritter— G. W. H. Jones — Allan Ramsay. Agent — John K. Torkington, Solicitor.