Town Investments Ltd v Department of the Environment [1977] UKHL 2

House of Lords

Between

Town Investments LtdAppellant

Department of the EnvironmentRespondent

Before

Lord Diplock

Lord Morris of Borthy-Gest

Lord Simon of Glaisdale

Lord Kilbrandon

Lord Edmund-Davies

LORD DIPLOCK

My Lords,

On 6th November, 1972, and at all material times thereafter, two buildings known as Keysign House, Oxford Street, and No. 17 North Audley Street, in London, were occupied as Government offices. 6th November 1972 was the starting date of the rent freeze imposed by the Counter-Inflation (Business Rents) Order 1972, made under Section 2(4) of the Counter- Inflation (Temporary Provisions) Act 1972, and continued by the Counter-Inflation (Business Rents) Order 1973, made under Part II of the Counter-Inflation Act 1973, which replaced the earlier statute.

These orders, as their names indicate, dealt with rents payable under " business tenancies " and their effect was to prohibit a landlord during a standstill period which ultimately expired in March 1975 from recovering rent at a rate in excess of the rent payable on 6th November 1972.

Each of the orders contained a definition of " business tenancy " and a statement of what was included in the expression " business" in terms that are identical so far as they are relevant to the facts of these appeals: —

" ' Business tenancy' means any tenancy where the property " comprised in the tenancy is or includes premises which are occupied " by the tenant and are so occupied for the purposes of a business " carried on by him or for those and other purposes . . ."

" ' Business ' includes a trade, profession or employment and includes " any activity carried on by a body of persons, whether corporate or " unincorporate."

The only issue before this House has been whether during the standstill period the premises to which these appeals relate were the subject of " business tenancies " within the meaning of the order. This in turn depends upon the answer to three questions:—(1) Who was the tenant of the premises?

(2) Were the premises or any part of them occupied by the tenant? And, if so,

(3) was the tenant's occupation for the purposes of a business carried on by him or for those and other purposes?

The leasehold title under which Keysign House was held on 6th November 1972 was an underlease entered into in 1952. The landlord was the predecessor in title of the respondents, the London County Freehold and Leasehold Properties Limited; the tenant was described as follows: —

" The Minister of Works (hereinafter called ' the Lessee' which " expression where the context so admits includes his successors and " assigns) for and on behalf of Her Majesty."

In the case of No. 17 North Audley Street, the landlord was the predecessor in title of the respondent, MEPC (Mayfair Properties) Limited. The tenant was described as follows: —

" The Minister of Works (hereinafter called 'the Tenant' which " expression shall where the context so admits include his assigns) for " and on behalf of Her Majesty ".

Both of these leases expired upon 25th December 1972. Fresh leases for a term of 5 years from 25th December 1972 were entered into in substantially the same terms as those which they replaced. The description of the lessee/tenant in the new leases was the same as in the former leases of 1952 except that the description " Secretary of State for the Environment" was substituted for that of " Minister of Works ".

This change in title was a consequence of the Secretary of State for the Environment Order 1970, made under the Ministers of the Crown (Transfer of Functions) Act 1946. By this order the former Ministry of Works, whose title had in 1962 been changed to that of Ministry of Public Buildings and Works, was dissolved and all the functions of the Minister of Public Build- ings and Works were transferred to the Secretary of State for the Environ- ment, to whom were also transferred all property, rights and liabilities to which that Minister was entitled or subject to before the coming into opera- tion of the order.

Included in the functions of the Minister of Public Buildings and Works transferred to the Secretary of State for the Environment, was the provision of accommodation for civil servants employed in departments of government other than the Ministry of which that Minister was head. At all material times the buildings that are the subject of these appeals were used to accommodate civil servants who were not engaged in the work of the Ministry of Public Buildings and Works or the Department of the Environment, but were engaged in the work of other government departments.

The rents reserved under the 1952 leases and current on 6th November 1972 had been in the case of Keysign House £39,690, and in the case of No. 17 North Audley Street £17,500. Under the new leases the rents reserved from 25th December 1972 were in the case of Keysign House £369,500, and in the case of No. 17 North Audley Street £19,000, viz. more than ten times as much as previously. If the Counter-Inflation Orders of 1972 and 1973 applied to the premises, only the former rents were payable in respect of the standstill period.

The landlord's claim that these orders did not apply to either of the premises. They took out an originating summons for a declaration to this effect and for a declaration that the rents payable after 25th December 1972 were the rents payable under the new leases and not the lower rents payable under the 1952 leases.

The summonses were heard together before Foster J. The main ground on which he found in favour of the landlords was that the Crown was not entitled to avail itself of the provisions of either of the Acts or Orders in Coun- cil made thereunder, because it is expressly stated in each of the Acts that it does not bind the Crown. This ground of decision was not accepted by the Court of Appeal as correct in law, and has not been relied upon in your Lordships' House. In view of the provisions of section 31(1) of the Crown Proceedings Act 1947, I need say no more about it.

The appeal by the Department of the Environment from the judgment of Foster J. was dismissed by the Court of Appeal upon another ground. They held that neither of the premises was the subject of a " business tenancy " within the meaning of the Counter-Inflation Orders. Their answers to the three questions that are posed by this appeal were(1) The tenant is the Secretary of State for the Environment and not the Crown ;

(2) No part of the premises were occupied by the tenant, and

(3) No part of the premises were occupied for the purposes of a " business ".

Accordingly, I turn to these three questions: —

1. Who was the tenant of the premises?

In the Court of Appeal this was treated as a pure question of construction of the leases themselves, as if Her Majesty, the Minister of Works, and the Secretary of State for the Environment were all persons to whose relationships to one another and to third parties the ordinary principles and concepts of private law applied. If this were right, it would involve a conflict between, on the one hand, the statement in the lease that the Minister or the Secre- tary of State is party thereto " for and on behalf of Her Majesty " and, on the other hand, the inclusion in the definition of " the lessee " in the case of Keysign House, of " his successors and assigns " and, in the definition of " the tenant" in the case of No. 17 North Audley Street, of " his assigns ". This conflict was pointed out by Buckley L.J. and Sir John Pennycuick and resolved by them by holding that the tenant was the Minister or Secretary of State and not the Crown, and that the words " for and on behalf of Her

Town Investments Limited

" Majesty " were either a mere indication that he was acting in his corporate capacity as Minister or Secretary of State (Buckley LJ, and Sir John Pennycuick) or that he took the leasehold interest as trustee for the Crown (Buckley LJ. and Lawton L.J.).

My Lords,

the fallacy in this argument is that it is not private law but public law that governs the relationships between Her Majesty acting in her political capacity, the government departments among which the work of Her Majesty's Government is distributed, the Ministers of the Crown in charge of the various departments and civil servants of all grades who are employed in those departments. These relationships have in the course of centuries been transformed with the continuous evolution of the constitution of this country from that of personal rule by a feudal land-owning monarch to the constitutional monarchy of to-day ; but the vocabulary used by lawyers in the field of public law has not kept pace with this evolution and remains more apt to the constitutional realities of the Tudor or even the Norman monarchy than to the constitutional realities of the twentieth century. To use as a meta- phor the symbol of royalty, " the Crown ", was no doubt a convenient way of denoting and distinguishing the monarch when doing acts of government in his political capacity from the monarch when doing private acts in his personal capacity, at a period when legislative and executive powers were exercised by him in accordance with his own will. But to continue nowadays to speak of " the Crown " as doing legislative or executive acts of govern- ment, which, in reality as distinct from legal fiction, are decided on and done by human beings other than the Queen herself involves risk of confusion. We very sensibly speak to-day of legislation being made by act of parliament— though the preamble to every statute still maintains the fiction that the maker was Her Majesty and that the participation of the members of the two Houses of Parliament had been restricted to advice and acquiescence. Where, as in the instant case, we are concerned with the legal nature of the exercise of executive powers of government, I believe that some of the more Athanasian-like features of the debate in your Lordships House could have been eliminated if instead of speaking of " the Crown " we were to speak of " the Government " —a term appropriate to embrace both collectively and individually all of the Ministers of the Crown and Parliamentary Secretaries under whose direction the administrative work of government is carried on by the civil servants employed in the various government departments. It is through them that the executive powers of Her Majesty's Government in the United Kingdom are exercised, sometimes in the more important administra- tive matters in Her Majesty's name, but most often under their own official designation. Executive acts of government that are done by any of them are acts done by " the Crown " in the fictional sense in which that expression is now used in English public law.

The executive acts of government with which the instant case is con- cerned are the acceptance of grants from lessors who are private subjects of the Queen of leasehold interests in premises for use as government offices and the occupation of the premises by civil servants employed in the work of various government departments. The leases were executed under his official designation by the Minister of the Crown in charge of the government department to which, for administrative and accounting purposes, there is entrusted the responsibility for acquiring and managing accommodation for civil servants employed in other government departments as well as that of which the Minister himself is the official head. In my opinion, the tenant was the government acting through its appropriate member or, expressed in the term of art in public law, the tenant was the Crown.

I do not find it necessary for disposing of the instant appeals to trace the history of the practice of taking grants of freehold or leasehold interests of land required for government purposes in the names of commissioners or heads of government departments whether corporate or unincorporated. With the increase of government business in the early part of the nineteenth century the technicalities of conveyancing made it inconvenient for the King himself to be an executing party to conveyances and his direct

acceptance of a leasehold tenure with its implication of service due to a feudal superior was regarded as incompatible with his supremacy. Accordingly, one finds from the beginning of the nineteenth century onwards a whole variety of statutes providing for the acquisition of land required for the purposes of a particular government department or of the government generally, in the name and under the seal of designated Commissioners or Ministerial heads of departments. In these nineteenth century statutes there is no consistency in the description of the capacity in which the persons so designated are to be executing parties to conveyances of the freehold and leasehold interests which they are authorised to acquire. Sometimes the interest is referred to as being held " on behalf "of His/Her Majesty", occasionally as being held "in trust for His/Her " Majesty ". The use of the expression " in trust" though it does not appear in any of the statutes under which the Secretary of State for the Environment, the Minister of Works, or any of their predecessors obtained the power to acquire land for government purposes, has nevertheless been relied upon by the respondents as showing that whenever an interest in land to be used for government purposes is conveyed to an officer of state in his official capacity, the interest so conveyed becomes subject to all the incidents of a trust in private law ; the legal estate is vested in the officer of state who executes the conveyance, only an equitable interest is vested in the Crown and the relationship between him and the Crown is subject to the equitable jurisdiction of the courts.

My Lords,

I would not exclude the possibility that an officer of state, even though acting in his official capacity, may in some circumstances hold property subject to a trust in private law for the benefit of a subject; but clear words would be required to do this and, even where the person to be benefited is a subject, the use of the expression " in trust" to describe the capacity in which the property is granted to an officer of state is not conclusive that a trust in private law was intended ; for " trust" is not a term of art in public law and when used in relation to matters which lie within the field of public law the words " in trust" may do no more than indicate the existence of a duty owed to the Crown by the officer of state, as servant of the Crown, to deal with the property for the benefit of the subject for whom it is expressed to be held in trust, such duty being enforceable administratively by disciplinary sanctions and not otherwise. (Kinloch v. Secretary of State for India (1882) 7 App. Cas. 619 per Lord Selborne L.C. at pp.625/6.) But even if the legal relationship of trustee and cestui qui trust under a trust in private law is capable of existing between an officer of state in his official capacity and a subject, the concept of such relationship being capable of existing between him as trustee and the Crown as cestui qui trust is in my view wholly irreconcilable with the legal nature in public law of the relationship between the Crown and its servants or, in more modern parlance, the government and the Ministers who form part of it.

In leases such as those that are the subject of the instant appeal where the person designated as grantee is a Minister of the Crown in charge of a government department, the references to " successors and assigns" or " assigns" simpliciter as being included in the definition of " lessee " or " tenant" are explicable as referring to any other Minister to whom the functions of the designated Minister may be transferred under the Ministers of the Crown (Transfer of Functions) Act 1946, or otherwise, and, in the case of " assigns," also to subjects to whom the leasehold interest may be assigned. Even if they were not, I would not treat their presence in the parentheses as sufficient to displace the ordinary concepts of public law as to the relationship between the government and the Ministers who form part of it.

2. Were the premises or any part of them occupied by the tenant?

At all relevant times the persons physically present on the premises were government servants. Expressed in the terms of art used in public law their

status was that of " servants of the Crown " and of no one else. The rela- tionship of master and servant does not exist between a Minister in charge of a government department, and any other government servant employed in that department in whatever grade of the civil service he may be. They are both fellow servants of the Crown. The use of the premises by government servants for government purposes thus constituted occupation of the premises by the Crown. Holding as I do that the Crown was the tenant of the pre- mises, I would accordingly answer this question " Yes ".

3. Was the tenant's occupation for the purposes of a business carried on by

him o r for those and other purposes?

The answer to this question depends upon how broad a meaning is to be ascribed to the word " business " in the definition of " business tenancy " in the two Counter-Inflation Orders. The word " business " is an etymological chameleon; its suits its meaning to the context in which it is found. It is not a term of legal art and its dictionary meanings as Lindley L.J. pointed out in Rolls v. Miller

(1884) 27 Ch D 71

at p. 88 embrace

" almost anything which is an occupation as distinguished from a plea- " sure—anything which is an occupation or a duty which requires " attention is a business ".

That was said by the Lord Justice in connection with the construction of a covenant in a lease against the carrying on of any trade or business on the demised premises; and ever since there has been a consistent line of cases in which this broad meaning has been ascribed to the word " business " in the context of covenants in leases restricting the permitted user of the demised premises. It appears to me to be clear beyond argument that the use made of the premises that are the subject of the instant appeals to accomodate civil servants engaged in what consistently with common usage could be quite properly descirbed as " Government business ", would constitute a breach of a covenant in a lease against permitting any business to be carried on upon the premises. The Crown or government through its servants is carrying out there a duty which requires attention.

The wide interpretation to be put upon the word " business " in restrictive covenants of this kind is dictated by the evident object of the covenants. The evident object for which powers were conferred by the Counter-Inflation Acts 1972 and 1973 to make orders restricting increases of prices, dividends and rents, was to curb inflation by preventing more money coming into circula- tion without any corresponding increase in production of goods or services. Separate Counter-Inflation Orders were made under the Acts, dealing respec- tively with business rents, agricultural rents and the rents of dwelling houses. The mischief against which these orders were directed did not depend upon who the tenant was or the use made of the premises by him but upon the receipt by his landlord of a greater sum of money in return for what produced no greater contribution to the national wealth that it had produced before. This would suggest that the evident object of the two Counter-Inflation (Busi- ness Rents) orders called for a broad construction of the word " business " in the definition of the tenancies to which they applied, so as to embrace all tenancies save those which fell within the scope of one of the two other orders dealing respectively with the rents of agricultural and residential tenan- cies or were excluded from the definition of " business tenancies " by express words—as were " building leases " under the 1973 order. I would therefore hold it to be legitimate to give to the word " business " in the definition of " business tenancy " in the two orders a meaning no less wide than that which it has been interpreted as hearing in covenants in leases restricting the user of demised premises. This meaning is, in my view, wide enough to include the purposes for which Keysign House and 17, North Audley Street were occupied by the Crown.

I do not therefore find it necessary to rely upon any extension of the or- dinary meaning of the word that may be the result of the express inclusion of " a trade, profession or employment" or of " any activity carried on by a " body of persons, whether corporate or unincorporate ". Nevertheless these express inclusions serve not only to underline the breadth of meaning to be

given to the word " business " in the orders but also to involve anomalies which cannot have been intended, if that word is not wide enough with or without the words of inclusion to embrace the exercise of functions of govern- ment by servants of the Crown. Functions of government in the United Kingdom are distributed, on no very consistent pattern, between the central government and local governmental and other statutory authorities comprised of bodies of persons, either corporate or unincorporate. The second part of the words of inclusion clearly embrace the activities of these authorities but not those of the Crown which is in law a corporation sole. It would be remarkable were it intended in the order to exclude from the expression " business " an activity which would fall within it when carried on by servants of a corporation aggregate but not if carried on by servants of the Crown simply because it is a corporation sole. It may be that the reconciliation of the different phraseology used in the two parts of the inclusion clause to describe things done by or on behalf of bodies of persons and things done by or on behalf of one, is to be found in the presence in the first part of the clause of the expression " employment "—a word hardly slightly less protean than " business " itself. When used in relation to a natural person " employ- " ment" seems to me to be broad enough to include anything which, in Lord Justice Lindley's phrase, is an occupation as distinguished from a pleasure, and to be understood in the same meaning as the word " activities " used in relation to bodies of persons in the second part of the inclusion clause.

It remains to mention two further arguments which have been advanced for excluding the business of government from the meaning of the word " business " as it is used in the Counter-Inflation Order. The first can be disposed of shortly for only minor importance was atteached to it by the Court of Appeal. It is that the definition of " business tenancy " and the in- clusion clause referring to " business " were lifted by the draftsmen of the orders from section 23(1) and (2) of the Landlord and Tenant Act 1954 ; and that section 56(3) of the same Act contains specific provisions applying it to tenancies " held by or on behalf of a Government department" and " occupied for any purposes of a Government department". In an Act which contained provisions for dealing with security of tenure of tenants of business premises by the grant of new leases and rights to compensation when a new lease could not be granted, the fact that the draftsman of the Act has thought it prudent to make specific provision as to its application to premises occupied for government purposes is a frail support for the conten- tion that but for those specific provisions the Act would not have applied to such premises at all and therefore tenancies of them cannot have fallen within the definition of " business tenancy " in the Act, even though in the ordinary meaning of the words of the definition, they would have been apt to include such tenancies. But any force that there might be in this contention is wholly lost when it is sought to use it to cut down the ordinary meaning of those words when used in other legislation passed with an entirely different object.

However, a matter to which all three members of the Court of Appeal appear to have attached importance was the presence of the indefinite article " a " in the reference in the definition of business tenancy to " a " business carried on by him " [sc. the tenant]. Both Buckley and Lawton L.JJ. were I think influenced by the conclusion they had already reached that the relevant tenant was the Secretary of State and not the Crown. They appear to have accepted that the activities of government through the various government departments might properly be described as " business ", but they considered that neither that part of those activities that was carried on through a particular government department nor, it would seem, those activities as a whole, could properly be described as " a business ".

My Lords,

it has been said that Roger Casement was hanged by a comma and (as Mr. Browne-Wilkinson has reminded us) that John Keat's mind was " snuffed out by an article ". I think that in exercising the functions of government the civil servants of the Crown are all engaged in carrying on a single business on behalf of the Crown, i.e. Her Majesty's Government in the United Kingdom. I do not see why the presence of an indefinite article affects the matter. I do not see why this is not a business carried on by

the Crown on whatever premises may be used by it to accommodate civil servants employed in the various government departments, or why it is not a business for the purposes of which each of these premises is occupied by the Crown.

For these reasons I would allow these appeals.

Lord Morris of Borth-y-Gest my lords,

Two questions are involved in this appeal. The first concerns the identity of the tenant of certain properties which were the subjects of underleases. The second raises an enquiry whether certain Statutory Instruments applied to the underleases. In particular a question arises whether the properties or whether premises included in the properties were occupied by the tenant for the purposes of a business carried on by him. The facts concerning the actual occupancy of the premises are not in dispute.

The appeal relates to two properties: there were separate underleases in reference to each: one property is known as " Keysign House ": the other as "17 North Audley Street". Substantially the same questions arise in regard to each. I will first consider " Keysign House ".

It was the subject of an underlease under seal made on the 24th November 1952. It was made between The London County Freehold & Leasehold Properties Limited (" the lessors ") of the one part and " The Minister of " Works (hereinafter called ' the Lessee ' which expression where the context " so admits includes his successors and assigns for and on behalf of Her " Majesty) of the other part". The term was one of 21 years from the 25th December 1951. The annual rent in all the later period of the term was £39,690. There were various elaborate covenants. The lessee undertook many obligations—one of which was to supply heat to some parts of the lessors' premises. Certain provisions clearly recognised that the lessee could provide accommodation for a government department.

Keysign House is the name given to a building at Nos. 421, 423, 425, 427 and 429 Oxford Street. Certain parts of the building however were not demised. The demise included one shop and there were certain special provisions in the underlease in regard to it. There was a covenant against assigning, subletting or parting with possession (unless with consent). There was however an important proviso. It was as follows: —

" Provided that the occupation of the demised premises or of some " part or parts thereof by the Lessees or any Department body or " person for whom the Lessee accepts responsibility for providing " accommodation or by Departments of Governments friendly to Great " Britain shall not be deemed to be a breach of this covenant".

There was a further rather significant addition to the proviso in the terms:

" In this proviso ' the Lessee' shall mean only the Minister of "

Works and not his successors or assigns ".

On the 12th November 1970 the property of the Minister of Works became vested in the Secretary of State for the Environment. That was as a result of the Secretary of State for the Environment Order 1970 (S.I. 1970—No. 1681) made pursuant to statutory powers. There was a transfer to the Secretary of State of all property, rights and liabilities to which the Minister of Public Building and Works was entitled or subject. The Secretary of State for the Environment was to be and his successors were by that name to be a corporation sole (with a corporate seal). So the Secretary of State for the Environment became by operation of law " the Lessee " under the underlease of the 24th November 1952.

One of the functions of the Secretary of State for the Environment is to provide accommodation and other services ancillary thereto for government departments and other organisations and persons in the public service. That

function of the Secretary of State is carried out by an agency within the Department of the Environment: it is called the Property Services Agency.

The premises known as Keysign House were not occupied by the Minister of Works nor, after the 12th November 1970, were they occupied by the Secretary of State for the Environment. The provision in the underlease already noted made it possible that the right to occupy which the Secretary of State had by contract acquired could in fact be enjoyed by government departments or bodies or persons for whom the Secretary of State accepted responsibility for providing accommodation or furthermore for departments of friendly governments.

For the period of the underlease nearly all parts of the premises (all save the one shop above referred to) were in fact occupied by agencies of the Government of the United States of America. They paid to the Department of the Environment a proportion of the rent payable pursuant to the underlease. The occupation was occupation by the United States Navy. The shop above referred to which was known as 423 Oxford Street (which had a superficial area that was very small in proportion to that of the demised premises) had until 1968 been occupied by the Stationery Office for the sale of its publications but after 1969 had been occupied as a " Job Centre " by the Ministry of Labour and its successor the Department of Employment. The Department of the Environment provided the furniture and furnishings for the shop and looked after its decoration and repair and maintenance. As to the United States Navy they remained in occupation after the 1952 underlease expired in December 1972. They were in occupation for a period of more than a year of the term granted by a later underlease to which I will refer. They remained in fact until the beginning of 1974 . The premises were then prepared as accommodation for the Department of Health and Social Security.

By reason of the above facts it is common ground that the premises were not occupied by the Secretary of State or by the Department of the Environ- ment.

The underlease was due to expire on the 25th December 1972. Before that date arrived the Secretary of State took steps to obtain a new tenancy. The Landlord and Tenant Act 1954 was in operation and Part II of that Act con- tained provisions which gave security of tenure for business, professional and other tenants. The provisions in Part II applied to any tenancy where the property comprised in the tenancy included premises occupied by the tenant for the purposes of a business carried on by him. Subject to the various provisions of the Act a tenant under such a tenancy could apply to the court for a new tenancy (see section 24). There was however in the Act a section (section 56) which made Part II of the Act applicable (inter alia) where there was an interest belonging to a government department or held on behalf of Her Majesty for the purposes of a government department. If a tenancy was held by or on behalf of a government department and the pro- perty comprised in it included premises occupied for any purposes of a government department the tenancy was (see section 56(3)) to be one to which Part II of the Act applied: for the purposes of any provision of Part II which was applicable only if certain conditions were satisfied (including the condi- tion that premises had been occupied for the purposes of the tenants' busi- ness) such conditions were to be " deemed to be satisfied " if the premises were occupied for the purposes of a government department.

Taking advantage of that section (section 56) the Secretary of State made in 1972 an application to the court for the grant of a new tenancy pursuant to the Act. The Secretary of State did not assert that the provisions of sec- tion 23 applied to the situation or that on behalf of the Crown he could avail himself of that section. He proceeded under section 56 which contained the deeming provisions. Negotiations between the parties then ensued.

At that time the problems of inflation were becoming acute and on the 30th November 1972 Parliament passed an Act to authorise measures to

counter inflation. It was the Counter-Inflation (Temporary Provisions) Act 1972. That its provisions (as the title suggests) were to be temporary was doubtless for the reason that a later measure was soon to be introduced.

The Act being one to " authorise " measures the plan of the Act was that power was given to " the appropriate Minister " to make orders under the Act or to apply provisions of the Act. The Act had reference to prices, pay. dividends and rents. So far as rents were concerned the power given to make orders was about as wide as it could be.

" The appropriate Minister may by order provide for preventing in- " creases of rent over rent payable before 6th November 1972 ". (See section 2, sub-section (4)).

An order could be framed " in any way whatsoever " and could prescribe any method of comparing rents (see the Schedule). The Act did not bind the Crown.

It is to be observed that the Schedule to the Act further provided that an order might define any expression used in section 2 other than an expression defined by section 8. In section 8 it was provided that " ' business ' " (which was an expression used in section 2) " includes any trade, profession or " vocation, and the expression ' in the course of business' shall be construed " accordingly."

Armed with these extensive powers the appropriate Minister made certain orders. Each order was a limited one. The only one having suggested rele- vance in this case was The Counter-Inflation (Business Rents) Order 1972 (S.I. 1972—No. 1850). It came into operation on the 1st December 1972. If there was a tenancy which was a " business tenancy " within a definition laid down, and if it was subsisting on the 5th November 1972, then during the period while section 2 of the Counter-Inflation (Temporary Provisions) Act 1972 remained in force (the standstill period) rent under a " business tenancy " was not to be payable at any rate exceeding the rate payable on the 5th November. Furthermore if a " business tenancy " came to an end after the 5th November and if the premises were then re-let, no higher rent (during the above-mentioned period) was payable than that which was payable on the 5th November 1972.

As applied to the dates which are relevant in this appeal the result was that if the order was binding and if there was a " business tenancy " which came to an end on the 25th December 1972 no higher rent could be payable there- after (during the standstill period above mentioned) than the rent payable on the 5th November 1972.

Though possessing such wide and ample powers to make orders as to rents the Secretary of State decided to use his powers in a limited way. It is not suggested that consideration has to be given in this appeal to any other order than that made by S.I. 1972 No. 1850. The fact that wider powers could have been exercised clearly cannot endow the powers actually exercised with an amplitude going beyond that which is yielded on a fair and reasonable reading of the words of the

Whatever were the reasons for making only a limited use of the wide powers which were given it is manifest that in their exercise it was decided to follow the pattern and much of the language of section 23 of the Landlord and Tenant Act 1954, which section applies to a tenancy where the property comprised in it is occupied by the tenant and furthermore is occupied for the purposes of a business carried on by him: and business for that purpose includes a trade, profession or employment and includes any activity carried on by a body of persons.

As already noted there were provisions in the 1954 Act which made Part II applicable in cases where a tenancy was held by or on behalf of a government department and where the property comprised therein included premises occupied for any purposes of a government department: occupancy for the purposes of a government department could be " deemed " to be

occupancy for the purposes of the tenants' business. In the order now being considered there were no such provisions in reference to a government tenancy or to government occupancy. There was no provision for any such extended application.

The result is that the question which now arises is whether it can be said that the tenancy entered into in 1952 came within the operation of the Counter-Inflation Order of 1972. If so the rate of rent payable on the 5th November 1972 became the standard rate.

What then is a " business tenancy " for the purposes of the order? There is a definition in paragraph 2, the interpretation paragraph of the order. It is as follows:

"' business tenancy' means any tenancy where the property comprised " in the tenancy is or includes premises which are occupied by the " tenant and are so occupied for the purposes of a business carried on " by him or for those and other purposes but does not include a tenancy " of or a right to occupy land used for agriculture."

There is no definition of the word " business " save that it " includes a trade, " profession or employment and includes any activity carried on by a body " of persons, whether corporate or unincorporate". The variation as compared with what was contained in section 8 of the Act may be noted, but for present purposes the validity of the order may be accepted. It was not suggested on behalf of the appellants that the last words could be of any avail to them in their contentions. Nor was it suggested that either the Minister or the Crown occupied for the purpose of carrying on a trade. Nor was it suggested that either of them occupied for the purpose of carrying on a profession. Nor in my view is there any reality or rational meaning in any attempt to say that either the Minister or the Crown occupied for the purpose of carrying on an employment. The issue remains—was there occupation for the purposes of carrying on " a business "?

Under the definition two questions arise. As applied to the present case the first question (leaving aside any question as to whether the order was applicable) is whether the Secretary of State was the tenant of the premises in question. If he was—then it is common ground that he did not occupy the premises. The order would not apply. The second question only arises if there was some other tenant who was actually in occupation: the question which in that event arises is whether any such tenant occupied for the purposes of a business carried on by him.

It is suggested by the appellant that " the Crown " was the tenant. Even if that were accepted (and I will revert to this matter) and even if " the Crown " could be said to have occupied any part of the premises I find it quite impossible for reasons which I will set out to accept that there was occupation " for the purposes of a business carried on " by the Crown.

When the above quoted definition of " business tenancy " is studied it will be seen that there is such a tenancy if(a) the property comprised in the tenancy is occupied by the tenant, or

(b) if the property comprised in the tenancy " includes premises" which are occupied by the tenant and, furthermore, in reference either to (a) or to (b), if either is applicable, if

As to the greater part of Keysign House it could not on the facts be asserted that there was occupation either by the Secretary of State or by the Crown. The occupation was by agencies of the United States of America who made payment to the British Government. The premises were used for the purposes of the American Navy. Nor could it possibly be asserted that the administration of the American Navy was " a business " carried on either by the Secretary of State for the Environment or by the British Crown. The shop at 423 Oxford Street must however be regarded as " premises " which are " included " within the properly demised. Though forming but a very small part (said to be less than two per cent.) of the

superficial area of the totality of what was demised under the tenancy I do not think that it can be disregarded on any " de minimis " principle. So the strange result follows that the whole issue in the appeal concerning Keysign House depends upon deciding whether the one shop was occupied by whoever was the tenant of the tenancy and was so occupied for the purposes of a business carried on by such tenant or for those and other purposes.

If the Secretary of State was the tenant of the tenancy then it is common ground that he did not occupy the shop. If it could be said that the " Crown " was the tenant and if the Crown was in occupation then the ques- tion arises whether such occupation was for the purposes of " a business " carried on by the Crown. In my view it was not.

In holding this view I find myself in accord with the views expressed by " Buckley and Lawton LJJ and by Sir John Pennycuick, Buckley LJ said that " to carry on some part of the business of government is something " different from carrying on ' a business'". I agree. He also said—" I do " not think that in any ordinary sense of the English language the Admiralty " or the Treasury or the Home Office or the Foreign Office can be said to " carry on a business ". I agree. The approach of Lawton L.J. was also founded upon a consideration of the words of the order and " the ordinary " usage of the English language ". Sir John Pennycuick said that the pur- pose of the 1972 Act was to curb inflation and that anyone would expect it to have a far-reaching and pervasive operation. He approached the construc- tion of the Act and of the order from that angle. He found it impos- sible however to hold that the Crown carried on " a business ". " The ex- " pression ' a business' conveys upon its ordinary meaning the notion of a " distinct enterprise (not necessarily for profit) having distinct objects, distinct " management and distinct assets and liabilities. It seems to me that only " upon an impermissibly loose use of the words can one say that the vast and " amorphous operations of the Crown or of a single government department " constitute ' a business ' upon the ordinary meaning of that expression ". I agree. I cannot think that either the Secretary of State or the Crown carried on " a business " within the spirit and intendment or upon a reasonable read- ing of the governing words which it is our duty to apply. It is not for us to consider what could have been the result had other words been used. We must look at the words used in their ordinary sense, (see the words of Lindley L.J. in Rolls v. Miller 27 Ch. D. 71, in which case it was held that a covenant in the lease of a dwelling-house against using the premises for or carrying on upon the premises any trade or business of any description whatsoever had been broken by using the premises as a lodging house for working girls—there was the business of a lodging-house keeper even though such business had been carried on by the trustees of a charity for the purposes of the charity and on the basis of not receiving any payment from the girls who lodged.)

It had been intended that the Counter-Inflation (Temporary Provisions) Act 1972 would soon be supplanted. In the result the Counter-Inflation Act 1973 was passed. It was passed on the 22nd March 1973. One of its pur- poses was to afford powers of control over prices, pay, dividends and rent. Part II of the Act which came into force on the 1st April 1973 related to Prices, Pay, dividends and Rents. Once again very wide powers were given to the Minister to restrict or prevent increases of rent. Once again there was only a limited exercise of the powers. On the 29th April 1973 there came into operation The Counter-Inflation (Business Rents) Order 1973 (S.I. 1973 —No. 741): the period for which section 2, subsection (4) of the previous 1972 Act had effect then terminated.

The new order only differed from the previous order in one or two minor respects which for present purposes are immaterial. The result was that if the tenancy that subsisted on the 5th November 1972 was within the defini- tion of a " business tenancy " then the rent as at that date was the standard rate. Article 5 of the new order was in these terms: —

" Subject to the provisions of this order, where in relation to any " premises there is a standard rate, rent under a business tenancy

"(Whether granted before or after the coming into forice of this order) "of those premises shall not be payable in respect of any part of the " time during which this order is in force at a rate exceeding the stan- " dard rate".

That being the position which the law has superimposed upon the negotia _ tions which had ensued after the application made in 1972 under section 56 of the Landlord and Tenant Act 1954 the negotiations continued. No ques- tion is before us in regard to them. They would presumably relate inter alia to such matters at the period of the new tenancy and the rent payable. They eventually resulted in a new agreement. A new underlease was made on the 14th September 1973 between The London County Freehold and Leasehold Properties Limited of the one part and "The Secretary of State " for the Environment thereinafter called 'the Lessee" which expression " Where the context so admits include his successors and assigns for and on " behalf of Her Majesty of the other part ". The underlease following very much the lines of the previous underlease made on the 24th November 1952 and related to the same demised premises. The period of the demise was only one of five years. That period ran from the 25th December 1972, If this new underlease followed upon the previous one, was as the appellant contends a "business tenancy" within the meaning of the two orders, it follow that no rent exceeding £39,690 could by law be payable. The rent contracted to be paid under the terms of the new underlease to which the parties affixed their seals was £369,500. No reservation of any kind was expressed but we were told that in letters the contention was kept open that during the pendency of the order only £39,690 need be paid. Any ap- licable law would of course govern the situation no matter what wording was used. The present proceedings were later instituted by the lessor (the) respondents to this appeal). That was in November 1978. Declarations of the court were sought that the Counter-Inflation (Business Rents) Orders of 1972 and 1978 did not apply to the tenancy created by the new underlease and also declarations to the effect that as from the 25th December 1972 rent at the rate of £369,500 per annum was payable.

The claim that neither order applied to "the tenancy created by "the underlease made on the 14th September 1978 calls for examination. There are two parties to a tenancy, the landlord and the tenant. The two Counter- Inflation Acts did not bind the Crown. If the tenant under the underlease was "The Crown" it was perfectly lawful for the Secretary of State to con- tract to pay £369,500. The Acts and the orders. If by their wording they applied did however bind the respondent company. It is here that section ?????? of the Crown Proceedings Act 1947 becomes relevant. "The subsection is in these terms;

" 31 (1) This Act shall not prejudice the right of the Crown to take " advantage of the provisions of an Act of Parliament although not " named therein; and it is herby declared that in any civil proceedings " against the Crown the provisions of any Act of Parliament which " could, if the proceedings were between subjects, be relied upon by " the defendant as a defence to the proceedings, whether in whole or in " part, or otherwise, may, subject to any express provision to the con- " trary, be so relied upon by the Crown."

Both sides have accepted that when the present proceedings were taken the department could by way of defence take advantage of the provisions of the two Acts and the two orders. That however they of course could only do if the facts of the case fall within the terms of the two orders so that the particular circumstances of the case fit the provisions of the legislation I have already given one reason why, in agreement with the Court of Appeal ,I do not consider that the facts and circumstances fall within the terms of the two orders. There is in my opinion a further separate reason. Again in agreement with the Court of Appeal. I consider that the Secretary of State was the tenant of the property.

The contention of the appellantsis that "the Crown" was the tenant. This contention has to be considered in the light of the law and principles concern- ing the position of "the Crown" and of a Minister of "the Crown".

The expression " the Crown " may sometimes be used to designate Her Majesty in a purely personal capacity. It may sometimes be used to desig- nate Her Majesty in her capacity as Head of the Commonwealth. It may sometimes be used to designate Her Majesty in her capacity as the constitu- tional Monarch of the United Kingdom. Thus laws are enacted by Her Majesty in Parliament. They are so enacted by Her Majesty by and with the advice and consent of the Lords and Commons assembled in Parliament and by the authority of the same. The expression may sometimes be used in a somewhat broad sense in reference to the functions of government and the public administration. It may sometimes be used in reference to the rule of law. The prosecution of a citizen alleging that he has committed an offence may be at the instance of and in the name of Her Majesty. The case for the prosecution is the case for " the Crown ".

Every citizen is a subject of Her Majesty and as such owes loyalty to "the Crown ". The Government of the day is Her Majesty's Government A Minister of " the Crown " is and is constantly referred to as a servant of the Crown. But it cannot be suggested that the Minister is or becomes "the Crown". Even if the grandiloquent description of being as "emanation" of the Crown is applied to him he remains separate from the Crown and is not and does not become the Grown. When acting on behalf of for for the purposes of " the Crown " some of the well recognised immunities of "the

"Crown" may cover what he does. But he does not become absolved from liability tor a personal tortious act even though "the Queen can do no wrong "

In his capacity as a servant of the Crown and head of a department or as a Secretary of State a Minister may have some duty to fulfil or some function to perform. He still does not become " the Crown ". It may be necessary to acquire the use of some premises which are in private ownership for the purpose of providing accommodation for various servants of the Crown so that they may carry out their administrative duties as members of a department and servants of "the " Crown ". It will be very convenient therefore if a contract can be nego- tiated with the owner of some suitable property and it will be very convenient if it is the function of some minister to acquire the right to use such property. The private owner of property will (unless it can by law be requisitioned from him) be free to make or not to make a contract. If he makes one he will be free (subject to any governing laws) to lay down his terms. He will be free to decide as to the identity of the other contracting party. He will be free to decide as to whom he will accept as his tenant or lessee. So in the present instance a property owner became willing to grant it on terms freely nego- tiated and reduced to specific written form. The terms of the document under seal call therefore for consideration while always remembering that the Minister who entered into a contract did so as a Minister or servant of "the Crown" and for the purposes of " the Crown "

The question as to who was the contracting party is entirely different from the question as to who was to be the occupier, The contract in terms recognised that the lessee could without breach of covenant allow various bodies to enter into occupation. The lessors were not obliged to contract in such terms. They could have stipulated as to occupancy in any way that they wished. It was provided that occupancy might be by government departments. Such occupancy if and when it occurred could properly be refferred to as occupancy by "the Crown". So if during a period of occupany by the Crown there was some levy imposed by statute upon the occupiers of property there would be no liability to pay if " the Crown" was not named in and so was bound by the statue (see Hornsey Urban District Council v Hennell

[1902] 2 KB 73

). But this does not mean that "the Crown" was free to depart from the terms of the contract made. So also the fact that the lessee was a servant of "the Crown" and undoubtedly entered into the contract for the purpose of "the Crown" cannot produce the result that the terms of the contract are to be varied or ignored or are not to be binding. The contract has to be interpreted.

having regard to the language used and in the light of the fact that the lessee was a Minister who was acting as such and acting on behalf of the Crown. But this cannot mean that the lessors must have imposed upon them a contract which differed from that which they made. Of course if by what they did and by the operation of a branch of constitutional law they in fact contracted with the Crown as tenant but had not appreciated that they were so doing their misunderstanding would be immaterial.

If on the making of the contract " the Crown " or, speaking colloquially, the public administration or the government became the tenant, there could be no possible reason for a provision that occupation by departments for whom the lessee accepted responsibility for providing accommodation should not be a breach of the covenant not to assign, sublet or part with possession.

If a Minister though acting on behalf of the Crown does not become the Crown but remains a separate legal person (such as a corporation sole) then it becomes necessary to see what contract the lessors made in this case. They contracted with someone whom both parties agreed was to be the lessee. The Minister might have contracted simply in terms that he was acting for and on behalf of Her Majesty. In that event either on principles of constitutional or public law or on the principles of the law of agency he would not himself have been the tenant. The lessors and the Minister did not contract in such terms. They contracted in the terms which I have set out. The lessors did not agree in any other terms. In my view they deliberately contracted in terms which made the Minister the tenant or lessee subject only to the fact that his successors or assigns could be substituted as the lessee. That was probably a very satisfactory arrangement. It avoided a situation (perhaps thought to be an undesirable one) in which Her Majesty (or " the Crown ") became the lessee of and undertook liabilities towards a limited company having a status comparable to that of a subject. The lessors might find it unwelcome from their point of view to have " the " Crown " as their lessee.

If at the time of the making of the contract the Minister was merely the person who negotiated it the parties to the tenancy would at once and from the start have been the limited company and Her Majesty (or " the Crown "). In that event there would be no future role for successors or assigns of the Minister. No later transfer of the Minister's particular functions to another Minister would be of any consequence or be in any way material. If the Crown was from the start the " lessee " the Crown could employ any of its servants to perform any of the Crown's functions as lessee, but there could be no room for the Minister to assign a status that he did not possess and never had possessed. The contract that was in fact made and which cannot be varied on some unilateral basis without the lessor's concurrence was that the Minister was the lessee and that the expression lessee (where the context so admitted) included his successors and assigns. As Buckley L.J. said:

" If by the operation of the underlease the term created by it were " vested in the Crown, to what could any successor of the Secretary of " State for the Environment succeed or what could the Secretary of " State assign? It is his successors and assigns who are referred to " within the brackets, not Her Majesty's. It seems to me to be " inescapable that the demise is to the Secretary of State for the " Environment and his successors and assigns and that the term must " have become vested in him in his corporate capacity."

The Minister was in my view the person chosen by or, so to speak, deputed by the organisation which may conveniently and colloquially be called the government to be the tenant or lessee of premises the use of which was needed. He was of course acting as part of his duty and not in a private capacity. He was entitled to the protection that there could be a drawing upon the public funds to meet any liability that he had undertaken. He and his successors or assigns were functioning " for and " on behalf of Her Majesty ". But though so functioning it is not suggested that any of the obligations undertaken (such as the obligation to pay rent

for a period of years) could be avoided or could at will just be overthrown or at pleasure disregarded. The words that I have just quoted may have been used to indicate and make clear that all obligations were undertaken in an official capacity and for the public service: they may have been used to denote that the Minister was in the position of a trustee (there being ample precedents and copious illustrations of statutory provisions showing that property may be held in the capacity of a trustee for the Crown: thus in the Crown Lessees (Protection of Sub-Tenants) Act 1952 there is a reference to an interest held in trust for Her Majesty for the purposes of a government department). In either event, and it matters not which, the Minister was the tenant: the lessors contracted on the basis that he was: it was a term of contract that he was the " lessee ": though the Minister was acting officially and in the performance of his duty to Her Majesty it became a part of that duty and a part of the authority delegated to him by Her Majesty that he should agree with a limited company that he would be their lessee and be himself in contractual relationship with them.

The issues which arise in regard to the other property (17 North Audley Street are substantially the same as those in regard to Keysign House. The first lease was dated the 13th March 1952. " The Landlord " of the one part was Gliksten Properties Ltd. The party of the other part was " The Minister " of Works (hereinafter called ' the tenant' which expression shall where the " context so admits include his assigns) for and on behalf of Her Majesty." The term was one of 21 years from the 25th December 1951. The rent was £17,500 per annum. The premises demised formed part of the basement and ground floor together with the five upper floors of 17 North Audley Street. By September 1973 the reversion immediately expectant on the term created by the lease of the 13th March 1952 became vested in M.E.P.C. (Mayfair Properties) Limited and on the 28th September 1973 following the negotiations to which I have referred an underlease was made between that company (called " the Landlord ") and " The Secretary of State for the En- " vironment (hereinafter called ' the Tenant' which expression shall where the " context so admits include his assigns) for and on behalf of Her Majesty ". The demise related to the same premises as were covered by the previous lease and was on similar terms save that the term was one of five years from the 25th December 1972 and the rent was to be £190,000 per annum.

The accommodation was put to various uses. The department paid the rent for the whole premises and the gas, water and electricity charges. The department furnished and maintained the premises: two rooms on the base- ment floor were used by electricians, carpenters and plumbers, and tools and materials were kept there. Such persons were in the public service but as such were not servants of the Secretary of State. The department provided the ground, first and second floors for use by the Registrar of Friendly Societies: the third floor for use by the Commissioners of Inland Revenue: the fourth and fifth floors for a time for use by the National Ports Council and afterwards by the Commissioners of Customs and Excise and for use by Value Added Tax Tribunals.

Though the facts in regard to 17 North Audley Street are different, the same questions arise as those in reference to Keysign House.

For the reasons which I have given I consider that in regard to each pro- perty the Secretary of State was the tenant: he did not occupy the premises : in respect of them there was no " business tenancy " so as to make the provi- sions of the counter-inflation orders applicable.

In my view the Court of Appeal came to the correct conclusion and I would dismiss the appeal.

Lord Simon of Glaisdale

My Lords,

I have had the privilege of reading in draft the speech delivered by my noble and learned friend on the Woolsack. I agree with it, and 1 would therefore allow the appeal.

It has been learnedly and elaborately argued. But in the end it depends on the answer to three short questions, of which the answer to the second de- pends on the answer to the first.(1) Who was the tenant of the demised pre- mises?

(2) Were the premises or any part of them occupied by the tenant?

(3) If so, was the tenant's occupation for the purpose of a business carried on by him?

The answer to the second question depends on the answer to the first be- cause, if the Minister of Works or the Secretary of State for the Environ- ment, in contradistinction to the Crown, was the tenant, he did not occupy a material part of the premises; whereas if the Crown was the tenant, the Crown was also undoubtedly in occupation.

The first two questions cannot be answered without bearing in mind that your Lordships are here concerned, not with private law, but with public, and within that with constitutional, law. In private law a phrase like " for " and on behalf of " would be apt to signify agency at least, and possibly trust. Not so in public law. The distinction appears clearly from Dunn v. Macdonald

[1897] 1 QB 555

. The question there was whether a public servant acting on behalf of the Crown was liable to the other contracting party for a breach of an implied warranty of his authority to enter into the contract. It was held in the Court of Appeal that he was not. Lopes L.J. said (p.557) :

"... an agent acting on behalf of a government is not liable for " breach of a contract made in his public capacity, even though he " would by the terms of the contract be bound if it were an agency " of a private nature."

In public law even a phrase like " in trust for " may not betoken at all the relationship of trustee and cestui que trust, but rather the imposition of a constitutional duty the sanction for which is political or administrative not legal (cf. Lord Selborne L.C. in Kinloch v. Secretary of State for India (1882) 7 App.Cas. 619, 625, 626.)

Nor can the first two questions be answered without also bearing in mind that your Lordships are concerned with symbolic language which cannot be understood without regard to constitutional history. The crown as an object is a piece of jewelled headgear under guard at the Tower of London. But it symbolizes the powers of government which were formerly wielded by the wearer of the crown ; so that by the 13th century crimes were committed not only against the king's peace but also against " his crown and dignity" (Pollock and Maitland, History of English Law, 2nd ed. 1911, vol. 1, p.525). The term "the Crown" is therefore used in constitutional law to denote the collection of such of those powers as remain extant (the royal prerogative), together with such other powers as have been expressly conferred by statute on " the Crown ".

So too " The Queen " indicates the person who by right of succession is entitled to wear the crown. But " Her Majesty " is evidently a symbolic phrase, betokening the power, the " mana ", which is embodied in the person entitled to wear the crown—as " His Holiness ", " His Beatitude " or " Mr. " Justice " are descriptive of the power believed to inspire and characterise the person so entitled. " Her Majesty " in constitutional legal usage thus generally personifies the powers of " the Crown "—powers the nucleus of which legally and historically are those of The Queen, but which by constitutional convention (i.e., in political reality) are exercised in the name of The Queen by those who are nominally and legally her servants or agents.

The same conclusion can be reached historically. Once central govern- ment was firmly established in England, power—what in modern political science would be known as executive, judicial and legislative power—was concentrated in the King. No line was drawn at first between the private and the public business of the King. But as the latter grew administrative convenience called for some devolution. Offices were hived off from the King's household. There was the Chancery presided over by the Chancellor.

Then there was the Privy Seal office under a Keeper of the Privy Seal, and the Exchequer with a Treasurer and a Chancellor of its own. And so on. All these officials holding offices of ancient origin had their action:

" confined within rigid limits, expressed by the commissions by which " they were appointed and the procedure which their acts must follow ".

The motive force behind their departments:

" was the King's command. They all existed to give effect to his will. " The officials who presided over them were appointed and dismissable " by him. Each was charged with the fulfilment of the royal pleasure " within his own appropriate sphere."

However, for centuries thereafter the King's secretary remained within the royal household. Unlike the officials holding offices of ancient origin, the King's secretary was therefore " free to enter into every new branch of royal administration as it developed ". So it was that with the increase in the powers of the Crown in the 16th century the Secretary rose to the first rank among the King's servants. But under the Restoration the Secretaries (for their office was now duplicated) too became heads of Departments of State, charged like the holders of the ancient offices with executing the royal will. (For the foregoing historical development, see D.L. Keir The Constitutional History of Modern Britain (3rd ed. 1947, pp.16, 17, 113, 245-6, whence also came the quotations).

With the development of modern government fresh departments were formed to be headed by Ministers or by Secretaries of State. Just as all were originally appointed to carry out departmentally the royal will, so today all Ministers are appointed to exercise the powers of the Crown, together with such other powers as have been statutorily conferred upon them directly.

My Lords,

it will, I hope, be apparent from the foregoing that " the " Crown " and " Her Majesty " are terms of art in constitutional law. They correspond, though not exactly, with terms of political science like " the Executive " or " the Administration " or " the Government ", barely known to the law, which has retained the historical terminology. So it comes about that Wade and Phillips, Constitutional Law, discussing proceedings by and against the Crown before the passing of the Crown Proceedings Act 1947, stated:

" ' Crown ' includes all the departments of the Central Government"

(3rd ed. 1946, p.264). The Minister at the head of a department of Central Government is, of course, part of that department. The very term " Minister" is, indeed, again symbolic, denoting an origin as the King's servant, and continued status as servant or agent of the Crown.

It is this history and the resulting legal use of symbolic language that enables the authorities to be understood. I cite some only out of the many available.

" All the great officers of state are ... emanations from the Crown. " They are delegations by the Crown of its own authority to particular " individuals."

(Day J. in Gilbert v. Corporation of Trinity House

(1886) 17 QBD 795

, 801). Later on the same page he speaks of " a participant of ... royal "authority". In Hornsey U.D.C. v. Hennell

[1902] 2 KB 73

Colonel Hennell as commanding officer of a Volunteer battalion purchased in his own name certain land in Hornsey for the purposes of its being transferred to and used by the battalion. The question was whether the Colonel was liable for expenses of sewering, paving, etc., under section 150 of the Public Health Act 1875, in which the Crown was not named and by which it in conse- quence was not bound. So the issue was whether the land was occupied by the Colonel or by the Crown. Lord Alverstone C.J., delivering the reserved judgment of the King's Bench Divisional Court said (p. 79):

" It was contended on behalf of the Attorney-General that, the land " being in fact purchased, owned and occupied solely for the purpose of

" the volunteer corps, it must be taken to be owned and occupied for " Crown purposes . . . " We are of opinion that the contention of the Crown is right . . ."

and at p. 80:

" This is, in our opinion, an ownership and occupation for and on be- " half of the Crown."

In Territorial and Auxiliary Forces Association of the County of London v. Nichols [1949] 1 K.B. 35, Scott L.J., giving the judgment of the Court of Appeal, spoke (p. 47) of " a Minister or organ of the Central Government " as being " a direct emanation from the Crown ". The facts in Bank voor Handel en Scheepvaart N.V. v. Administrator of Hungarian Property [1954] A.C. 584 were complicated and unnecessary to rehearse. One of the issues was whether the Administrator was a servant or agent of the Crown. On this there was a difference of opinion. I content myself with citing short pas- sages from speeches respectively from the majority and the minority. Lord Reid at p. 612 quoted from the speech of Lord Westbury L.C. in Mersey Docks and Harbour Board v. Cameron (1865) II H.L.C. 443, 501-2, com- menting himself (p. 613):

"... by ' the direct and immediate servants of the Crown, whose occu- ' pation is the occupation of the Crown itself' he appears to me simply " to have meant those whose position under the Crown is such that their " occupation is the Crown's occupation."

and at p. 616, " Ministers are pre-eminently Her Majesty's servants ". At p. 635 Lork Keith of Avonholme said:

" In all this there is little that throws light on what constitutes a per- " son "a servant of the Crown. Obvious cases like a Minister of State "... need hardly be considered."

The mere fact of incorporation, which is only for administrative conveni- ence, does not make a Secretary of State or a Minister or a Ministry an entity separate from the Crown: see Bankes L.J. in Commissioners of H.M.'s Works and Public Buildings v. Pontypridd Masonic Hall Co., Ltd. [1920] 2 K.B. 233. 234-5; Parker L.J. in Buccus S. R. L. v. Servicio Naciona! del Trigo [1957] I Q.B. 438. 472 (part of his ratio decidendi).

Moreover.

" So long as the Crown occupies premises by its servants, those " servants do not themselves occupy."

(Scott L.J. in Territorial and Auxiliary Forces Association of the County of London v. Nichols [1949] 1 K.B. 48). Hence the non-liability of Colonel Hennell for paving and sewerage charges (Hornsey v. Hennell).

Before drawing a conclusion it only remains to note also the fundamental constitutional doctrine that the Crown in the United Kingdom is one and indivisible.

If such terms as " aspects of the Crown " or " emanations of (or from) the "Crown" or "participants on royal authority" are considered to be too cloudy for legal usage, the legal concept which seems to me to fit best the contemporary situation is to consider the Crown as a corporation aggregate headed by The Queen. The departments of State including the Ministers at their head (whether or not either the department or the Minister has been incorporated) are then themselves members of the corporation aggregate of the Crown. But on this approach two riders must be added. First, the legal concept still does not correspond to the political reality. The legal substra- tum is overlaid by constitutional convention. The Queen does not now command those legally her servants who are heads or subordinate members or subject to the control of the departments of State. On the contrary She acts on the formally tendered collective advice of those Ministers who constitute the Cabinet. Secondly, when The Queen is referred to by the symbolic title of " Her Majesty ", it is the whole corporation aggregate, the Crown, which is generally indicated. This distinction between " The Queen " and " Her Majesty " reflects the ancient distinction between " the King's two

''bodies" "natural" and the "politic": see The Case of the Duchy of Lancaster (1567) 1 Plowden 212, 213.

It follows that prima facie in public law a Minister or a Secretary of State is an aspect or member of the Crown. Except in application of the doctrine of precedent analogies are to be regarded warily in legal reasoning. But in view of all the foregoing the analogy of the human body and its members is, I think, an apt one in relation to the problem facing your Lordships. It is true to say, " My hand is holding this pen." But it is equally true to say— it is another way of saying, " I am holding this pen ". What is nonsensical is to say, " My hand is holding this pen as my agent, or as trustee for " me ".

The Minister of Works and the Secretary of State for the Environment are aspects or members of the Crown, incorporated and charged for administrative convenience with holding and administering property required by other Crown servants, who are also aspects or members of the Crown. A demise to the Minister of Works or to the Secretary of State for the Environment for and on behalf of Her Majesty is a demise to the Crown. Therefore the Crown was the tenant in the case of each of the premises with which your Lordships are concerned, and the Crown as tenant occupied them.

I believe that the Court of Appeal might well have arrived at this conclusion had it not been for the words " successors and assigns" and " assigns " in the respective leases. But the reference to " successors " is perfectly natural in a conveyance to a corporation sole; and the reference to " assigns" is easily explicable bearing in mind the numerous statutory instruments made under the Ministers of the Crown (Transfer of Functions) Act 1946 which amount in public law to statutory assignments.

For the third question—was the Crown's occupation for the purpose of a business carried on by the Crown?—your Lordships enter the field of statutory interpretation. I think that the primary sense of " carrying on " a business " in ordinary speech is commercial. But it was rightly common ground that this was not the appropriate linguistic register, and that " carrying on a business " extended to the office activities of, say, professional men. Statutory construction here imperatively demands consideration of the object of the legislation ; and a construction is suspect which produces the fantastic anomaly that those landlords alone fortunate enough to have the Crown as tenant were immune from the required rigours of the counter- inflation legislation. So the only question is whether the words " a business " carried on by him ", in its context and bearing in mind the object of the legislation, can extend to the business of government carried on by the Crown. In my view they can and must.

Lord Kilbrandon

My Lords,

During the currency of the Counter-Inflation (Business Rents) Orders 1972 and 1973 underleases were made between the predecessor in title to the appellant and the respondents at rents which, if the premises were business premises to which the orders apply, were not payable in respect of the standstill period as provided for by the Counter-Inflation (Temporary Provisions) Act, under the powers conferred by which the orders were made. The substantive questions are, whether the concerned premises were occupied by the tenant thereof, and whether they were occupied by him for the purposes of a business carried on by him.

I will take as an example—all the premises are on the same footing—the lease of Keysign House. The lessee, or tenant, was the Minister of Works, including his successors and assigns, for and on behalf of Her Majesty. The premises were occupied by various government departments for the purpose of carrying on the business of the departments. I have to use a word which seems to pre-judge the second of the questions which was argued because I do not have at my command language which may more unambiguously

describe what goes on in the premises. As for successors and assigns, ministers succeed one another in their offices, and functions are from time to time transferred between ministries or to new ministries. So here, the Ministry of Works has been dissolved, and the property to which the minister was entitled (see Secretary of State for the Environment Order 1970 para. 2) has changed hands by what may be regarded as a statutory assignment to another Minister of the Crown, whose Department is the appellant in these appeals.

My Lords,

I have had the advantage of reading the speech prepared by my noble and learned friend, Lord Diplock, and since I am in entire agreement with his conclusions I do not think it would serve a useful purpose if I were to attempt my own analysis of the status under our constitution of Ministers in their relationship with the Crown. I put the matter in this way because I am satisfied that it is this status which must be determinative of the first question. I do not find the concepts of agency or trust, even as analogues, relevant in this context. The situation in outline is this. It is notorious that the greater part of the buildings used for governmental functions have been and are held in the name and under the care of a particular minister, now the appellant. Some are occupied by him and his department, most of them by other departments. There can be no rational distinction between the incidents of the two classes of occupier. He is property-holder for the Crown in the executive sense of that word. When he takes a lease for and on behalf of Her Majesty he is taking it as the Crown: it is the only way in which the Crown can act in this aspect of its function. When he puts a department into occupation he puts in the Crown in another aspect. If there is a reference to successors and assigns in the lease, that is for the reason I have given. But the result is that the Crown is the tenant and the Crown is the occupier. I think this is the way ordinary people would look at it, and that they would be right. In my opinion, accordingly, the first question, that is whether the premises are occupied by the tenant, must, for reasons of constitutional practice, be answered in favour of the appellant.

On the second question, it was not in the end argued that " for the " purposes of a business " should mean something different from " for the " purposes of business ". I would have found that very difficult to accept. Business, is moreover, a simple word of common currency, and it is seldom helpful in such a case to look around for other words which may explain it. The orders have given an extended meaning by way of " interpretation " to the word, but I do not find it necessary to rely on the extending elements. " Business" is defined by way of interpretation in sec. 8 of the 1972 Act: and by sec. 1 (1) of the Schedule the power of the order under discussion to define expressions is given in a rather confused way. " An " order or notice under section 2 of this Act . . . may define any expression used in those sections (other than an expression defined by section 8 of this Act)." There are not antecedents to which the words " in those sections " can be made to refer; it seems that the definition of " business " contained in the order may be ultra vires. The appeal can, however, be decided upon the terms of the statutory definition, so that the standing of the definition in the order is not relevant. As to the scope of the word " business " as defined in the Statute I would be content to accept the submission for the appellant, namely that it denotes the carrying on of a serious occupation, not necessarily confined to commercial or profit-making undertakings. Clearly the administrative functions of Her Majesty's Government fall within that description.

For these reasons I would allow this appeal.

Lord Edmund-Davies

My Lords,

For the reasons appearing in the speech of my noble and learned friend,. Lord Diplock, I too would allow this appeal.

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order

this must be so however deeply one may regret it if the attack on inflation was inadequately mounted.