Universe Tankships Inc of Monrovia v International Transport Workers Federation (The Universe Sentinel) [1981] UKHL 9

House of Lords

Between

Universe Tankships Inc of MonroviaAppellant

International Transport Workers Federation (The Universe Sentinel)Respondent

Date 28 July 1978

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 10th day of July 1980 complained of in the said Appeal be, and the same is hereby, Reversed and that the Order of Mr. Justice Parker of the 2nd day of April 1980 be, and the same is hereby, Restored except so far as regards the words " This Court doth declare that the sum of $6,480.00 (six thousand four hundred and eighty dollars) paid by the Plaintiffs to the First defendants on 28th July 1978 and any monies now representing the same together with interest thereon be held by the First Defendants upon resulting trusts for the Plain- tiffs ": And it is further Ordered, That the Respondents do pay or cause to be paid to the said Appellants the Costs incurred by them in the Court of Appeal and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.

UNIVERSE TANKSHIPS INCORPORATED OF MONROVIA

(APPELLANTS)

INTERNATIONAL TRANSPORT WORKERS' FEDERATION AND OTHERS (RESPONDENTS)

Lord Diplock Lord Cross of Chelsea Lord Russell of Killowen Lord Scarman Lord Brandon of Oakbrook

Lord Diplock

my lords.

The facts that gave rise to this action, brought by the appellants C* the " Shipowners ") as owners of the Liberian tankship " Universe Sentinel" against the respondent trade union (ITF), present no novelty. They afford a typical example of the application by ITF and the affiliated national trade unions who are its members, of the policy of " blacking " vessels sailing under what ITF regards as " flags of convenience " unless the owners of the vessel comply with ITF's demands as to the rates of pay and other terms of employment of the crew and as to various other matters to which it will become necessary to advert in detail.

Other examples of the way in which the blacking of flags-of-convenience vessels is carried out are to be found in the judgments in The " Camilla M." [1979] 1 Lloyd's Rep. 26 and N.W.L. Ltd. v. Woods [1979] 1 W.L.R. 1294. where the object sought to be achieved by the blacking policy and the reasons why it does not always command the support of the crews of vessels to which it is applied, are also discussed. Both of these, however, were cases in which an interlocutory injunction was sought by shipowners against trade union officials to restrain them from committing the tort of inducing port workers to break their contracts of employment by preventing or refusing to assist in enabling the blacked vessel to leave port; and the only issue of law before the court was whether the defendants were likely to establish that they were entitled to immunity from suit in tort by virtue of section 13(1) of the Trade Union and Labour Relations Act 1974—an issue that was decided in favour of the trade union officials by this House in N.W.L. Ltd. v. Woods. In those two cases it was necessary to identify the nature of the demands that ITF was making upon the shipowner as the price for obtaining the lifting of the blacking, but it was not necessary to examine the means by which compliance with those demands would be effected if the shipowner found himself compelled to succumb to them.

What is novel in the instant case is that the action was brought after the Shipowners did succumb and is not brought in tort, but is an action to recover from ITF part of the moneys paid by them to ITF in order to have the blacking of their vessel lifted so as to enable it to leave the port of Milford Haven. Although a substantially larger sum was claimed in the courts below (with partial success), the only part of the Shipowners' claim which is the subject of appeal to your Lordships' House, relates to a sum of $6,480 paid as a contribution to a so-called Welfare Fund administered by ITF. This sum is sought to be recovered on one of two alternative grounds: the first is that it is the subject of a resulting trust in favour of the Shipowners, since the trusts upon which it was received from them by ITF were void; the second is that it is recoverable from ITF as money had and received, since it was exacted by subjecting the Shipowners to economic duress. To determine whether the Shipowners can succeed on either of these grounds calls for a close consideration of the contemporary documents relating to the payment, and of the rules of the Welfare Fund.

My Lords,

the judgment of Parker J. in the Commercial Court and that of the Court of Appeal (Megaw, Brightman and Watkins LJJ.), delivered by Lord Justice Megaw, appear consecutively in the report of the instant case [1980] 2 Lloyd's Rep. 523. Both judgments set out the facts briefly and contain lengthy quotations from the relevant documents; but in view

of the division of opinion between your Lordships as to what ought to be the fate of this appeal, I see no way of avoiding repetition of the greater part of such quotations here.

The Shipowners are a Liberian company. The tankship which they owned, " Universe Sentinel," was of 269,092 tons d.w.t.: the crew consisted in the main of Asians employed at rates of pay substantially less than those upon which ITF insists, and are provided for in what it calls the ITF Collective Agreement. In July 1978, "Universe Sentinel" was on time charter to Texaco and arrived on 17th July at the Texaco terminal at Milford Haven to discharge her cargo there. On her arrival the Master was handed, by a representative of ITF, a copy of a standard form of document headed:

"Conditions to be fulfilled before flag-of-convenience "vessels can be issued with ITF Blue Certificates"

. An ITF Blue Certificate, though this is nowhere spelt out in the documents, is well understood by shipowners, charterers and shippers, and by the constituent trade unions of ITF, to exempt a vessel sailing under a flag of convenience from being subject to the blacking policy of ITF. These conditions refer to a Special Agreement which it will be necessary to refer to in some detail, but the only extract from the conditions themselves which requires to be reproduced is paragraph 3 :

" 3. The Special Agreement also covers the owners' contributions " to the Seafarers' International Welfare, Protection and Assistance " Fund. The contributions are US$162.— per man per year. The Fund " was set up to help provide welfare, social and recreational facilities " in ports around the world for seafarers of all nations, especially those " serving in flag-of-convenience ships, and is administered by an " international committee of representatives of ITF-affiliated unions."

Parker J. placed considerable reliance on these words in deciding what I shall refer to as the trust point in the Shipowners' favour; but, for reasons which will appear, I think that he was wrong in doing so.

The " Universe Sentinel " finished discharging on 18th July, but because of being blacked by tugboat crews, she was prevented from sailing until 29th July, when the blacking was lifted in consequence of a meeting held at the offices of ITF in London on the previous day between representatives of the Shipowners and officials of ITF at which the Shipowners yielded to the demands of ITF that they should pay to ITF the sum of $80,000 and enter into two agreements with ITF, viz.: one headed " Special " Agreement " on a standard printed form and the second in typescript (" the " Typescript Agreement").

The Special Agreement, after setting out the parties, viz. the Shipowners, therein called " the Company ", and ITF, starts with recitals:

" WHEREAS:

" 1. the ITF is an independent trade union organisation comprising " fully autonomous trade union organisations in transport and allied " services throughout the world and members of the Special Seafarers' " Section of the ITF;

" 2. the Company is the registered owner/manager of the Ship; " described in Schedule 1 hereto;

" 3. the ITF and the Company desire to regulate the conditions of "employment of all seafarers (hereinafter individually called a ' Seafarer') serving from time to time aboard the Ship; ".

I pause to say that recital 1 is not strictly accurate. Under its constitution membership of ITF is restricted to trade unions; there are no personal members; but in return for what is called an entrance fee and annual membership fee to what it describes as the Special Seafarers' Section (or Department), ITF does issue to seamen, who are not members of a national trade union affiliated to ITF, a membership card which entitles the holder to request assistance from any such affiliated trade union in whatever country he may find himself in need of it.

Article 1 of the Special Agreement needs to be set out in full: " The Company undertakes as follows:

" a to employ each Seafarer in accordance with the terms of the " current ITF Collective Agreement for World Wide trading " (hereinafter called the ITF Collective Agreement) as amended " from time to time in accordance with Article S below;

" b to incorporate the terms and conditions of the ITF Collective " Agreement into the individual contract of employment of each " seafarer and into the Ship's Articles and furnish copies of " these documents to the ITF. Any seafarer, enjoying terms and " conditions which are, taken as a whole, recognised by the ITF " as more favourable to the seafarer, shall continue to enjoy such " terms and conditions;

" c to pay on behalf of each Seafarer contributions and fees at the " rates shown in Schedule 2 hereto to the Seafarers' International " Welfare Protection and Assistance Fund and to the Special " Seafarers' Section of the ITF. The contributions and fees " shall be paid to the ITF annually and in advance;

" d to display aboard the Ship copies of the Special Agreement, " the ITF Collective Agreement and the ITF Blue Certificate " to be issued under Article 2 hereof in a prominent place to " which each Seafarer shall have access at all times; and

" e to grant to representatives of the ITF and of trade union " organisations affiliated to the ITF free access to each Seafarer " at all reasonable times whether or not aboard the Ship, whether " the ship is in berth or not."

Articles 2, 3 and 4 deal with the issue and withdrawal of the Blue Certifi- cate; while Article 5 entitles ITF, upon giving two months' notice, to change the rates of pay in the Collective Agreement and the rates of entrance and membership fees to the ITF Special Seafarers' Section and of contributions to the Welfare Fund referred to in Article 1c and set out in Schedule 2. Schedule 2 itself is as follows:

" ITF SPECIAL SEAFARERS' SECTION

" Entrance fees

40 at US$15 per man US$

" Membership fees

40 at US$30 per man US$per year

" SEAFARERS' INTER- " NATIONAL WELFARE" PROTECTION AND" ASSISTANCE FUND

40 at US$ 162 per man US$per yea

" TOTAL

US$8,280.-

" The sum of US$ is equivalent to

" Received with thanks:

(signed) BRIAN LAUGHTON

on behalf of the ITF "

Although the separate totals for the entrance and membership fees to the ITF Special Seafarers' Section are not filled in, simple arithmetic discloses that of the grand total of $8,280, the sum of $6,480 is attributable to the contribution to Seafarers' International Welfare Protection and Assistance Fund (" the Welfare Fund "); and this is the sum that the Shipowners seek to recover in their appeal to this House.

The Collective Agreement, which is referred to in Article 1b, contains provisions as to rates of wages and other terms and conditions of employ- ment of a kind that are generally to be found in collective agreements negotiated between trade unions and employers. The Collective Agreement, as such, is not a legally enforceable contract because of section 18 of the

Trade Union and Industrial Relations Act 1974; but Article 1b of the Special Agreement requires its terms and conditions to be incorporated in the individual contract of employment of each seaman, by whom it would be enforceable. New contracts incorporating, by reference, the Collective Agreement were, in fact, signed with most of the members of the crew on 29th July 1978, and " Universe Sentinel" was permitted to sail on that date.

Only one of the provisions of the Collective Agreement requires citation:

"All seafarers covered by this Agreement shall be either members " of an appropriate national trade union affiliated to the ITF or, in " the absence of any suitable organisation, members of the Special " Seafarers' Section of the ITF in which case the Company shall pay " on behalf of each seafarer an Entrance Fee of US $15 and a Member- " ship Fee of US $30 per annum, annually and in advance. The " Company undertakes to notify any crew changes made in the ship, " sending names, addresses, ranks and details of qualifications, together " with the appropriate Entrance and Membership fees to the ITF as " soon as possible after the crew changes are made. The Company " acknowledges the right of the ITF to appoint a liaison representative " from among seafarers serving on board the vessel covered by this " Agreement."

It is to be noted that this is confined to entrance and membership fees to the Special Seafarers' Section of the ITF. By incorporating the provisions of the Collective Agreement in the contract of employment of the individual seaman, the Shipowners assume no obligation whatever to the seaman to make any contribution to the Welfare Fund.

In addition to the demands by ITF, which are dealt with in the Special Agreement, shipowners, in order to obtain the lifting of the blacking, are required to pay, for distribution to each seaman concerned, the difference between the rates of pay provided for in the Collective Agreement and the lower rates which had been actually paid to the seaman since the date of his engagement on the vessel. It is mainly with this additional require- ment that the Typescript Agreement is concerned, while its terms were highly relevant to that part of the Shipowners' claim which is not the subject of their appeal to this House; this makes it unnecessary to refer to any other provisions of the Typescript Agreement, except those contained in the first paragraph :

" The ITF confirms receipt today of US $80,000 (Eighty thousand " United States dollars) which is accepted by the ITF as to the one " part of $8,280 for the Union Entrance Fees, Annual Subscriptions " and Welfare Fund Contributions and as to the other part of $71,720, " as a discretionary trustee. The beneficiaries are the Master, Officers, '' Engineers and crew members on board on 28th July 1978."

The sum of £71,720, referred to in this paragraph, was an estimate, which turned out to be inaccurate, of the difference between the actual and Collective Agreement rates of pay of each member of the crew of the " Universe Sentinel ", during the period between the date of his engagement under ship's articles and 29th July 1978. The remaining paragraphs of the Typescript Agreement deal with the machinery for ascertaining the detailed facts relating to each member of the crew, and for the adjustment of the sum paid or payable by the Shipowners when those facts have been ascertained.

Lastly, I find it necessary to set out nearly all of what are described as the "Rules for Seafarers' International Assistance Welfare and Protection Fund":

" 1. The Fund shall be known as the Seafarers' International " Assistance Welfare and Protection Fund. It is established under " the auspices of the International Transport Workers' Federation.

" 2. The object of the Fund shall be the financing of any such " work as may be sanctioned by the Executive Committee of the

" Federation for the purpose of promoting, advancing or protecting " by any such means as the Executive Committee in their absolute " discretion may decide, the interests of seafarers generally or groups " of seafarers, national or otherwise, or of assisting individual seafarers, " or otherwise of serving seafarers' interests.

" 3. The income of the Fund shall consist of contributions received " under agreements concluded on behalf of the Seafarers' Section of " the Federation with shipping undertakings or shipowners, the income " of investments mentioned in clause 5 of these Rules, and such other " monies as the Executive Committee of the Federation may from time " to time determine.

" 4. The Fund shall be administered by the Fair Practices " Committee elected by the Seafarers' and Dockers' Sections of the " Federation, and the General Secretary of the Federation shall be " responsible to that Committee for the day to day management of " the Fund. The Fair Practices Committee may invite any person " representing such shipping undertakings and shipowners as shall have " entered into agreements to contribute to the Fund to act as a con- " sultant on the administration of the Fund; provided that there should " not at any time be more than one such consultant.

" 5. The General Secretary of the Federation shall receive all " money paid to the Fund. Subject to the overriding authority of the " Executive Committee under clause 2 of these rules, he shall spend " such money in accordance with the directions of the Fair Practices " Committee, provided that no money belonging to the Fund shall be " spent otherwise than for the object of the Fund as defined in the " said clause 2. The General Secretary may invest, in accordance " with the directions of the Fair Practices Committee, any money " belonging to the Fund which, in the opinion of the Fair Practices " Committee, is not required for immediate expenditure for the object " of the Fund as defined as aforesaid."

The references to the Seafarers' Section and the Dockers' Section appear- ing on these rules are references to two of the industrial sections into which the membership of ITF (consisting as it does of national trade unions of workers involved in all forms of transport) are divided. The powers of industrial sections are dealt with in Rule XIII of the Constitution of ITF. For present purposes, it is enough to say that the sections appear to be subject to the general control or tutelage of the Executive Board; and the only provision of Rule XIII that it is necessary to cite is sub-rule (1) under which, presumably, the Seafarers' Assistance Welfare and Protection Fund was created:

" There shall be industrial sections, as defined in the Preamble of " this Constitution, to deal with matters concerning individual branches " of transport and allied activities. The Executive Board shall have " authority to set up such further sections or special departments as " deemed necessary to improve the services of the ITF to its affiliates " or to deal efficiently with particular activities or problems, and may " create or provide for special funds in connection with such sections " or departments. The Executive Board shall determine their terms " of reference and generally be authorized to guide their activities."

Very shortly after " Universe Sentinel " had sailed, the Shipowners, on 10th August 1978, demanded return of the $80,000 as money paid under duress and asserted that the Special Agreement and the Typescript Agree- ment were void upon that ground. Return of the money was refused by ITF and later in 1978 some 27 members of the crew assigned to the Shipowners their interest in the $71,720 estimated back pay of members of the crew from the date of their engagements referred to in paragraph 1 of the Typescript Agreement. By the time the action came on for hearing before Parker J., some of these assignments had been withdrawn; but your Lordships are not now concerned with any claim by the Shipowners to recover any part of the $71,720, either by virtue of the assignments or as

money paid under duress. The Shipowners were held by Parker J., and by the Court of Appeal, to be entitled to recover an aliquot portion of that sum which was attributable to those assignments that were undisputed and there is no appeal to this House on that part of the case. The Ship- owners did not pursue, before Parker J., the claim that they had originally asserted to recover that part of the sum of $8,280 referred to in paragraph 1 of the Typescript Agreement that was attributable to entrance and membership fees of members of the crew to the ITF Special Seafarers' Section. So that is how it comes about that all that is in issue in the appeal to this House is the $6,480 paid as a contribution to the Welfare Fund.

Recovery of this sum, as I have already mentioned, is claimed upon one or other of two alternative grounds, the first of which is that it is subject to a resulting trust in favour of the Shipowners, as donors, since it was paid by them to ITF upon trusts that were void, because their purposes were not exclusively charitable.

My Lords,

there is a certain air of artificiality about treating the Shipowners as donors of money for trust purposes, when the only object that they had in mind in paying any money to ITF was to get the blacking of " Universe Sentinel " lifted, and thereafter to get the money back from ITF if they could; but for the purposes of determining what it is convenient to refer to as the trust point, one must treat the payment as having been " voluntary " in the sense that the Shipowners' consent to making it was not vitiated by duress, and one must ascertain the legal nature of the payment from the relevant documents, for no oral evidence was directed to the matter.

I have had the advantage of reading the speech to be delivered by my noble and learned friend, Lord Russell of Killowen, which deals fully with the trust point. I agree with his reasoning and with the conclusion that he reaches, that the money was not held by ITF on any trust but was, in its legal nature, a contribution to the funds of ITF which ITF, by taking appropriate steps under its rules, could use for any purpose it thought fit.

The Court of Appeal had reached the same conclusion. It is contrary to that of Parker J., who had based his opinion upon the assumption that the money had been paid by the Shipowners for the purposes of a trust, whose objects had been represented by ITF to be those referred to in paragraph 3 of the document handed to the Master of " Universe Sentinel" on 17th July 1978, which I have quoted above. Since the Shipowners were not, at that time, aware of the Rules of the Welfare Fund, there might have been a plausible argument in favour of the conclusion reached by Parker J. if the evidence had established that, in making the payment of $6,480 on 28th July 1978, reliance had been placed by the Shipowners on the description of the Welfare Fund and its purposes set out in the document that had been handed to the Master; but no mention of this document, or of any reliance on it by the Shipowners, is to be found either in the pleadings or in the oral evidence of the Master, or of the representatives of the Shipowners who conducted the negotiations with ITF that resulted in the payment. So the trust point depends upon the other documents dealt with by Lord Russell of Killowen, and there is nothing that I can usefully add to what he will say about the legal effect of those.

My Lords,

I turn to the second ground on which repayment of the $6,480 is claimed, which I will call the duress point. It is not disputed that the circumstances in which ITF demanded that the Shipowners should enter into the Special Agreement and the Typescript Agreement and should pay the moneys of which the latter documents acknowledge receipt, amounted to economic duress upon the Shipowners; that is to say, it is conceded that the financial consequences to the Shipowners of the " Universe Sentinel" continuing to be rendered off-hire under her time charter to Texaco, while the blacking continued, were so catastrophic as to amount to a coercion of the Shipowners' will which vitiated their consent to those agreements and to the payments made by them to ITF. This concession makes it unnecessary

for your Lordships to use the instant appeal as the occasion for a general consideration of the developing law of economic duress as a ground for treating contracts as voidable and obtaining restitution of money paid under economic duress as money had and received to the plaintiffs' use. That economic duress may constitute a ground for such redress was recognised, albeit obiter, by the Privy Council in Pao On v. Lau Yiu Long [1980] A.C. 614. The Board in that case referred with approval to two judgments at first instance in the commercial court which recognised that commercial pressure may constitute duress: one by Kerr J. in Occidental Worldwide Investment Corporation v. Skibs A/S Avanti [1976] 1 Lloyd's Rep. 293, the other by Mocatta J. in North Ocean Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. [1979] Q.B. 705, which traces the development of this branch of the law from its origin in the eighteenth and early nineteenth century cases.

It is, however, in my view crucial to the decision of the instant appeal to identify the rationale of this development of the common law. It is not that the party seeking to avoid the contract which he has entered into with another party, or to recover money that he has paid to another party in response to a demand, did not know the nature or the precise terms of the contract at the time when he entered into it or did not understand the purpose for which the payment was demanded. The rationale is that his apparent consent was induced by pressure exercised upon him by that other party which the law does not regard as legitimate, with the consequence that the consent is treated in law as revocable unless approbated either expressly or by implication after the illegitimate pressure has ceased to operate on his mind. It is a rationale similar to that which underlies the avoidability of contracts entered into and the recovery of money exacted under colour of office, or under undue influence or in consequence of threats of physical duress.

Commercial pressure, in some degree, exists wherever one party to a commercial transaction is in a stronger bargaining position than the other party. It is not, however, in my view, necessary, nor would it be appropriate in the instant appeal, to enter into the general question of the kinds of circumstances, if any, in which commercial pressure, even though it amounts to a coercion of the will of a party in the weaker bargaining position, may be treated as legitimate and, accordingly, as not giving rise to any legal right of redress. In the instant appeal the economic duress complained of was exercised in the field of industrial relations to which very special considerations apply.

My Lords,

so far as is relevant to this appeal, the policy of Parliament, ever since the Trade Disputes Act 1906 was passed to overrule a decision of this House, has been to legitimise acts done by employees, or by trade unions acting or purporting to act on their behalf, which would otherwise be unlawful wherever such acts are done in contemplation or furtherance of a dispute which is connected with the terms and conditions of employment of any employees. I can confine myself to the kind of acts and the particular subject matter of the trade dispute that was involved in the instant case, and I use the expression " legitimise " as meaning that the doer of the act is rendered immune from any liability to damages or any other remedy against him in a court of justice, at the suit of a person who has suffered loss or damage in consequence of the act; save only a remedy for breach of contract where the act is done in breach of a direct contract between the doer of the act and the person by whom the damage is sustained.

The statutory provisions in force when the events with which this appeal is concerned took place, and which point to the public policy to which effect ought to be given by your Lordships, are chiefly contained in sections 13, 14 and 29 of the Trade Union and Labour Relations Act 1974. The legislative history of these sections is referred to in the recent decision of this House in Hadmor Productions Ltd. v. Hamilton [1982] 2 W.L.R. 322. In terms they are confined to bestowing immunity from liability in tort; they do not deal with immunity in any other type of action. In the case of a

trade union such immunity is extended by section 14 to virtually all torts; in the case of individuals, it is extended by section 13 to defined classes of torts (which would include the blacking of the " Universe Sentinel") which are limited, not only in their nature, but also by the requirement that what would otherwise be the tortious act must be committed in contemplation or furtherance of a trade dispute as defined in section 29.

The use of economic duress to induce another person to part with property or money is not a tort per se; the form that the duress takes may, or may not, be tortious. The remedy to which economic duress gives rise is not an action for damages but an action for restitution of property or money exacted under such duress and the avoidance of any contract that had been induced by it; but where the particular form taken by the economic duress used is itself a tort, the restitutional remedy for money had and received by the defendant to the plaintiff's use is one which the plaintiff is entitled to pursue as an alternative remedy to an action for damages in tort.

In extending into the field of industrial relations the common law concept of economic duress and the right to a restitutionary remedy for it which is currently in process of development by judicial decisions, this House would not, in my view, be exercising the restraint that is appropriate to such a process if it were so to develop the concept that, by the simple expedient of " waiving the tort", a restitutionary remedy for money had and received is made enforceable in cases in which Parliament has, over so long a period of years, manifested its preference for a public policy that a particular kind of tortious act should be legitimised in the sense that I am using that expression.

It is only in this indirect way that the provisions of the Trade Union and Labour Relations Act 1974 are relevant to the duress point. The immunities from liability in tort provided by sections 13 and 14 are not directly applicable to the Shipowners' cause of action for money had and received. Nevertheless, these sections, together with the definition of trade dispute in section 29, afford an indication, which your Lordships should respect, of where public policy requires that the line should be drawn between what kind of commercial pressure by a trade union upon an employer in the field of industrial relations ought to be treated as legitimised despite the fact that the will of the employer is thereby coerced, and what kind of commercial pressure in that field does amount to economic duress that entitles the employer victim to restitutionary remedies.

My Lords,

ITF does not suggest that the immunity from suit in most kinds of tort conferred upon trade unions by section 14 whether or not they are committed in contemplation or furtherance of a trade dispute, points to a public policy that trade unions should be immune from a restitutionary action for money had and received. Such a suggestion would not be sustainable. If Parliament had intended to give to trade unions, simply because they are trade unions, a wider immunity from suit than that for which section 14 provides, it would have done so. What ITF relies upon is the immunity from actions for particular kinds of tort given by section 13 to every person, whether a trade union or not.

To qualify for immunity under section 13, an act, which would otherwise be actionable in tort, must be done in contemplation or in furtherance of a trade dispute; and for a dispute to qualify as a trade dispute within the meaning of section 39(1), it must be a dispute which is connected with one or more of a number of subject matters, of which the only one relied on by ITF in this appeal is:

" terms and conditions of employment" of the crew of "

Universe Sentinel". The members of the crew themselves were not in dispute with the Shipowners about the terms and conditions of their own employment, but this, for the reasons mentioned in N.W.L. Ltd. v. Woods (ubi sup.), is generally the case when ITF intervenes in order to carry out its policy in respect of vessels sailing under flags of convenience. Such disputes as did exist were disputes between the Shipowners and ITF acting upon its own behalf and not as representative of or agent for the members of the crew collectively or individually. But these disputes would

qualify as trade disputes under the definition in section 39, so long as they were connected with the terms and conditions of employment of the members of the crew of " Universe Sentinel". however unwelcome to those members the intervention of ITF in their affairs might be.

My Lords,

it was accepted by this House in Hadmor Productions Ltd. v. Hamilton (ubi sup. at p.331). which was decided after the judgment of the Court of Appeal in the instant case, that "terms and conditions of " employment" is a wide expression. As Lord Denning had put it in a passage in his judgment in B.B.C. v. Hearn [1977] I.C.R. 685, that was quoted with approval in the Hadmor case, the expression " may include not " only the contractual terms and conditions but those terms which are " understood and applied by the parties in practice, or habitually, or by " common consent, without ever being incorporated into the contract." A typical example of terms and conditions of employment that are not contractual which, although far from being exhaustive is relevant to this appeal, is supplied by provisions of a collective agreement which does not comply with the requirements of section 18(1) of the Trade Union and Industrial Relations Act 1974, and is accordingly conclusively presumed not to be intended to be a legally enforceable contract. By definition a " collective agreement" is an agreement or arrangement made by a trade union with an employer relating to one of the matters referred to in section 29(1), which include " terms and conditions of employment". The ITF Collective Agreement falls within this particular category. But wide as the expression " terms and conditions of employment" is, it is limited to terms which regulate the relationship between an employee and the person for whom he works, i.e. his employer. It does not extend to terms which regulate a relationship between an employer and some third party acting as principal and not as agent for an employee and for which no provision is made in the terms under which the employee works for the employer.

" Connected with " also is a wide expression, but it, too, has its limits. In my view, it is not enough in order to create the necessary connection between a dispute relating to terms and conditions of employment of employees of a particular employer, and a demand made upon that employer by a trade union acting on its own behalf and not on behalf of employees working for the employer, that the demand should be made at a time when the trade union is negotiating a collective agreement relating to the terms and conditions of employment of those employees, and the employer's yielding to that demand is made a condition precedent to the lifting of the blacking additional to the condition precedent that the employer should also agree to the terms of the collective agreement insisted on by the trade union. To take an extreme example, if a trade union were to demand as a condition precedent to lifting a blacking that the employer should make a contribution to a particular political party favoured by the union, or to a guerilla group in some foreign country, such a demand whenever it was made would not, in my opinion, have the necessary connection with any dispute about terms or conditions of employment in furtherance of which the blacking was imposed.

A preliminary observation appears to me to be called for as to the way in which the Special Agreement and the Typescript Agreement should be approached in dealing with the duress point. The court is not engaged in its normal task of construing an agreement in order to determine the common intention of the parties as expressed in the words that they have used. Ex hypothesi, and also ex concessis in the instant case, at the time that they entered into these agreements the will of the Shipowners was coerced. They had no choice as to the words in which the agreements were expressed; these were dictated solely by ITF. Recital 3 to the Special Agreement, which states the desire of the parties to regulate the terms and conditions of employment of the crew of the " Universe Sentinel", is not to be regarded as any assent by the Shipowners to the accuracy of the statement that everything that they were required by the Special Agreement to do was connected with the terms and conditions of employment of the crew, even if that would have been the true effect of the recital if the Special Agreement

had not been executed under duress—a matter on which I share the doubts expressed by Lord Russell of Killowen. The recital ought in my view to be wholly disregarded by a court which is called upon to determine whether a particular requirement is connected with terms or conditions of employment of the crew or not. In the same way the court would disregard a recital insisted on by ITF which said in terms that the Special Agreement was not induced by economic duress, or an express covenant by the Shipowners that they would not claim back any money paid to ITF pursuant to any term of it. Likewise the fact that ITF chose to put a demand for a payment that was not connected with terms and conditions of employment in the same clause of the Special Agreement as a demand for payment that was so connected cannot, in my view, alter the nature of the demand. To place a demand that is not legitimate in juxtaposition to a demand that is legitimate and to describe the two demands as a package deal is not, in my view, capable of legitimising the otherwise illegitimate demand.

With these considerations in mind, I turn to the Special Agreement and Typescript Agreement, and in particular to Article 1, paragraphs a, b, and c of the Special Agreement. The Special Agreement is made by ITF as principal; it does not purport to be acting as agent for any member of the crew of " Universe Sentinel ", and this is confirmed by the provision in paragraph 1 of the Typescript Agreement that the excess back pay is to be held by ITF, not as agent for the members of the crew, but as trustee. Paragraphs a and b of Article 1 clearly relate to terms and conditions of employment of the crew of " Universe Sentinel". Paragraph c, however, deals with two distinct subject-matters:(1) the payment by the Shipowners on behalf of members of the crew employed by them of those crew-members' entrance and annual membership fees to the ITF Special Seafarers' Section, and

(2) the payment by the Shipowners of contributions to the Welfare Fund; such contributions also being expressed to be paid on behalf of each member of the crew.

As respects the first category of payments, entrance and membership fees to ITF Special Seafarers' Section, the payment of these fees by the Shipowners on behalf of each member of the crew of " Universe Sentinel" is made one of the terms and conditions of employment of such crew member by section 24 of the ITF Collective Agreement, and the crew member obtains, by virtue of his membership of the Special Seafarers' Section, benefits available to him on production of his membership card to which he would not otherwise be entitled. So the necessary connection with terms and conditions of employment is present as respects these payments; and the Shipowners have advanced no contention to the contrary.

As respects the second category of payments, contributions to the Welfare Fund, to speak of these as being made " on behalf " of any member of the crew is inaccurate. All that it means, if anything, in relation to these contributions is that the number of members of the crew is a factor in the calculation of the total payment to be made, and this is not a legally accurate meaning which the expression " on behalf of " is capable of bearing. The Shipowners are given no authority under the ITF Collective Agreement or otherwise by any member of the crew to make any such payment as his agent, nor is any duty owed directly by a crew member to ITF to contribute to the Welfare Fund created by the Special Agreement, to which the only parties are the Shipowners and ITF. The crew member has no right to require the Shipowners to make the payment or to withhold the payment and to account to him for it by paying it to the crew member himself or expending it for some other purpose on his behalf. Put colloquially as well as legally, the contribution to the Welfare Fund provided for in Article 1c has nothing to do with him as a member of the crew; nor, with respect, do I see how the fact that Article 1d incorporates a requirement that the Special Agreement as well as the Collective Agreement should be displayed upon " Universe Sentinel" so as to be open to inspection by members of the crew is capable of converting into a term or condition of their employment an obligation assumed by the Shipowners to ITF that lacks the legal characteristics of a term or condition of employment.

My Lords,

as pointed out in the speech of Lord Russell of Killowen. the contribution to the Welfare Fund was in law a contribution to the funds of ITF which, by taking appropriate steps under its rules, it could use for any purpose it thought fit. consistent with its objects, even though that purpose was designed to benefit exclusively employees engaged in other forms of transport and had nothing to do with employees engaged in transport by sea. It may be a reasonable expectation that some part of the fund, at any rate, will continue to be used for the benefit of seamen, whether they are in or out of a job at the time they seek to avail themselves of the benefit, although the accounts suggest that such expectation would have been justified in relation only to a relatively minor part of the fund. But what I regard as fatal to the contention that the demand for contributions to the Welfare Fund was connected with terms and conditions of employment is that there is nothing whatever to suggest the entitlement of a member of the crew of "Universe Sentinel" to take advantage of any benefits that might be provided for out of the fund would be in any way dependent upon the existence or non-existence of a relationship of employee and employer between the crew member and the Shipowners. The availability of such benefits, if any, as the Welfare Fund might provide, had nothing to do with the terms and conditions of the crew members' employment by the Shipowners, and a demand for payment to a fund is not, in my view, " connected with " the terms and conditions of employment of anyone at all; nor can such connection be created merely by accompanying the demand with another demand that is connected with a trade dispute.

As Parker J. put it:

"... it is inherently unlikely that it" [sc. Parliament] " can have intended to confer upon unions an unlimited power to extract " money provided only that what may be called a trade dispute demand was " made at the same time, and it is a clear principle of law that any deroga- " tion of the subject's rights under the law can only be achieved by express " words or necessary implication. In the present case the demand was, in " my judgment, paid under what amounts to duress."

The Court of Appeal would have taken the same view and upheld the judgment of Parker J. on the duress point had they not felt that they were prevented from doing so by certain observations in the judgment of Lord Justice Roskill. as he then was, in B.B.C. v. Hearn. and of my own in my speech in N.W.L. Ltd. v. Woods. So far as it was stated by Roskill L.J. in B.B.C. v. Hearn that the expression " terms and conditions " of employment" has a " very wide meaning" I have already pointed out that there is nothing in the judgments in B.B.C. v. Hearn, or the reference to those judgments in Hadmor Productions v. Hamilton, that throws any doubt upon the correctness in law of the passage I have quoted from the judgment of Parker J. I must, however, take the blame for expressing myself in N.W.L. Ltd. v. Woods in terms that could be under- stood as being inconsistent with that passage in Parker J.'s judgment in the

instant case.

All that was said in the speeches in this House in N.W.L. Ltd. v. Woods was said in the context of an application for an interlocutory injunction against officials of ITF to restrain them from blacking a vessel sailing under a flag of convenience. It was held in that case. overruling The " Camilla M.", that in order for a dispute to be connected with terms and conditions of employment of the crew engaged upon a flag-of-convenience vessel, so as to attract the immunity from an action in tort conferred by section 13(1) of the Trade Union and Industrial Relations Act 1974, it was not necessary that the improvement of the terms and conditions of employment of the particular seamen who composed that crew should be the predominant purpose of the blacking. It was sufficient that changes in terms and condi- tions of employment of the crew was a matter on which the officials of ITF were insisting. In my own speech, after referring to the suggestion that the ultimate object of ITF's campaign of blacking vessels sailing under flags of convenience unless their crews are engaged on ITF standard articles at ITF standard rates of wages was to drive flags of convenience

(as they define them) off the seas, and saying that this would not prevent the immediate dispute from being a dispute connected with the terms and conditions of employment of the crew of the ship that was being blacked, I ended that paragraph of my speech with the words cited by the Court of Appeal in the instant case:

" one of the main commercial attrac- " tions of registering vessels under flags of convenience is that it facilitates " the use of cheap labour to man them. So even the ultimate object of "

ITF's campaign is connected with the terms and conditions of employment " of seamen."

The Court of Appeal in the instant case treated these words as an expression of my opinion that any demand for money made by ITF upon a shipowner in the course of pursuing its ultimate objective of driving flags of convenience off the seas was, ipso facto, connected with terms and conditions of employment of seamen. It was certainly not my intention to suggest by those words that a demand, for instance, by ITF that the owner of a flag-of-convenience vessel should pay to the union's funds £1,000,000 as the sole condition to be fulfilled in order that the blacking should be lifted would entitle ITF's officers who were inducing the blacking to immunity from an action in tort by virtue of section 13(1). That such was not my intention is, I hope, apparent from later passages in my speech and certainly no support for it is to be found in either of the other speeches in the case.

Section 13(1) was directly applicable to the remedy sought in N.W.L. Ltd. v. Woods. In the instant case it is only indirectly relevant as an indication of what kind of demand for money public policy requires should be excluded from giving rise to a restitutionary remedy by way of an action for money had and received, notwithstanding that the money was exacted in circum- stances that would otherwise have amounted to economic duress. As Parker J. did, and as the Court of Appeal would have done had they not been misled by an incautious phrase in my own speech in N.W.L. Ltd. v. Woods, I see nothing in the Trade Union and Industrial Relations Act 1974 that indicates any Parliamentary intention that public policy does so require; and for the reasons that I have already given, I would allow this appeal on the duress point.

In view of the difference of opinion between the members of this House upon the duress point it may be appropriate that before departing from the subject I should state that my opinion that the demand for a contribu- tion to the Welfare Fund is not legitimised so as to deprive the Shipowners of a restitutionary remedy would not necessarily be different if a requirement that the Shipowners should make such a contribution were incorporated in the ITF Collective Agreement. Sections 13 and 29 of the Trade Union and Labour Relations Act 1974 are not directly applicable to restitutional remedies; they are relevant only for such indications as they give of the public policy as to what kinds of demands ought to be regarded as legitimate in the field of industrial relations notwithstanding that compliance with them is induced by economic duress. The fact that ITF had also insisted that a term as to the requirement of payment to the Welfare Fund should be inserted in the ITF Collective Agreement would not, in my opinion, affect the public policy under which it is excluded from being legitimised.

Lord Cross of Chelsea

My Lords,

The facts of this case have been stated by my noble and learned friend, Lord Diplock. The appeal raises two points—the " trust" point and the " duress " point.

In common with all your Lordships I think that the decision of the Court of Appeal on the " trust" point was right. The case for the appellant on

this point, as pleaded, was that the "Welfare" Fund is not part of the general assets of ITF but is held on separate, albeit void, trusts and that accordingly any contributions made to it by third parties become held on resulting trusts for the contributors. In my opinion, the rules of the Welfare Fund do not impress it with any trusts. It is simply a fund which ITF set apart from its other assets with a view to its use for specified purposes but which remains in law part of the general assets of ITF and can be used if ITF so decides for other purposes.

The "duress" point raises the question whether the demand made by ITF that the appellants should make contributions to the Welfare Fund was a " legitimate " demand in the sense that although compliance with it was enforced by pressure that amounted to duress the appellants are. nevertheless, not entitled to recover the contributions as "money had and received". The fact that your Lordships do not agree on the answer to be given to this question, shows that it is a difficult one. Up to a point there was agreement between the parties. In the first place it was common ground between them that although none of the provisions of the Trade Union and Labour Relations Act 1974 have any direct application to this case, guidance as to where the line should be drawn in the field of industrial relations between " legitimate " and " illegitimate " demands by a Trade Union, can be found in the provisions of the Act giving immunity from liability in tort for certain acts done in contemplation or furtherance of a trade dispute, and that the demand in this case would rank as legitimate if a refusal by the appellants to comply with it would have given rise to a dispute between the appellants and ITF connected with the terms and conditions of employment of the crew of the " Universe Sentinel". Secondly, it was common ground that if a trade union were to make two demands, one of which was legitimate and the other not, the existence of the legitimate demand would not preclude the employer from recovering money paid under duress in compliance with the illegitimate demand. If, to take an example suggested by Lord Diplock, ITF had coupled its demand that the appellants should increase the wages of the crew with a demand that they should contribute to a fund to assist the guerillas in El Salvador, and the appellants had complied with both demands under duress, the fact that they could not recover the increase in wage payments would not preclude them from recovering the contributions to the guerilla fund. I would add, although on the facts of this case the point does not arise for decision, that I fully concur with the view expressed by my noble and learned friend in the concluding paragraph of his speech, that in the case supposed it would have made no difference to the right of the appellants to recover the payments to the guerilla fund that ITF had insisted, as a condition of lifting the " blacking " of the vessel, that an undertaking by the appellants to make the payments should be inserted in the contracts of employment of each member of the crew and that the appellants had, under duress, entered into such undertakings with each member. A trade union cannot turn a dispute which in reality has no connection with terms and conditions of employment into a dispute connected with terms and conditions of employment by insisting that the employer inserts appropriate terms into the contracts of employment into which he enters.

Then, was the demand that the appellants should make contributions to the Welfare Fund, a demand a refusal to comply with which would have involved a dispute between ITF and the appellants connected with the terms and conditions of employment of the crew of the " Universe Sentinel "? I would begin by observing that the Fund is not properly described as a " Welfare " Fund at all. Rule 2 of the present rules says that the object of the Fund shall be " the financing of any such work as may be sanctioned " by the Executive Committee of the Federation for the purpose of " promoting, advancing or protecting by any such means as the Executive " Committee in their absolute discretion may decide, the interests of seafarers " generally or groups of seafarers, national or otherwise, or of assisting " individual seafarers, or otherwise of serving seafarers' interests." There is nothing to limit the expression " work " to " welfare " work. The Fund

could be expended if the Executive Committee thought fit in the work of driving " flags of convenience " from the seas. The accounts of the Welfare Fund for the years 1976, 1977 and 1978 were produced on discovery. Their effect is summarised in the following passage in the judgment of the Court of Appeal:

" The accounts are headed ' Seafarers International Assistance, "' Welfare and Protection Fund', but in fact the income account " includes not only contributions to the Welfare Fund but also the " contributions payable for crew membership of the Special Seafarers' " Section. The latter contributions are relatively small, amounting in " 1978 to under 8 per cent of the total income. The total income of the " Welfare Fund in these years, in round figures, advanced from " £1,700,000 in 1976 to £3,500,000 in 1978; expenditure on the welfare " of seafarers progressed from £263,000 to £763,000; administration " expenses grew from £220,000 to £613,000; the surplus income added " to capital in each of these years went from £1,200.000 to £2.100,000, " being an accumulation of no less than £5,700,000 in the three years."

It appears from Article 5 of the Special Agreement that the rates of contribution to the Welfare Fund are fixed by ITF and may be increased by it from time to time at its discretion. ITF called no evidence to explain the position disclosed by these accounts. The assets of the Welfare Fund, which at the end of 1978 were worth some £7,870,000 net are—as a matter of law—the property of ITF to use as it likes. No doubt, it would be only in very exceptional circumstances that ITF would apply any of those assets to purposes other than the purposes of the Seafarers' Section. But even if one assumes that in practice the Welfare Fund will always be applied for the purposes set out in Rule 2, I cannot see how a contribution to the Welfare Fund differs from a contribution to the general funds of a Seamen's Union—nor did I understand counsel for the respondents to contend that there was any difference. His reply to the point was to say " the appellants " admit that they cannot recover the crew membership fees; what difference " is there between them and the contributions to the Welfare Fund? ". To my mind there is a world of difference. By paying his membership fees and getting his membership card, the member secures a right to certain benefits and services from the union. These are analogous to the benefits obtained from a private health insurance scheme or a private pension fund, and the fees paid are presumably calculated with some reference to the expense of providing the benefits and services. If an employer defrays the expense of obtaining such benefits for his employees, his payments are in substance additional wages and the benefits obtained are properly described as " fringe " benefits " of the employment. By contrast, the members of the crew do not obtain any rights to benefit from the Welfare Fund as a result of the appellants' contributions to it. Their chance of receiving some benefit from the fund is just the same whether or not the appellants contribute to the fund or whether or not they remain in the employment of the appellants. All that one can say is that the contributions add to the resources of the union. It might, I suppose, be argued that any increase in the wealth of a trade union must be beneficial to its members. As a general proposition that might well be doubted; but even if it were universally true, the fact would not establish any connection between the demand and the terms and conditions of employment of the crew. I cannot bring myself to think that even in this day and age a demand that an employer shall make contributions to union funds at rates fixed from time to time by the union—for that, as I see it, is all that this demand amounts to—is a demand which can be legitimately enforced by duress. In fact, of course, the appellants did not enter into any agreements with the members of the crew to make the welfare contributions but. as T have already indicated, I do not think that if they had entered into such agreements under duress that circumstance would have precluded them from recovering the payments.

I agree with my noble and learned friends, Lord Diplock and Lord Russell of Killowen, that the appeal should be allowed.

Lord Russell of Killowen

my lords.

This appeal is concerned with an episode in a substantially world-wide battle between the International transport Workers' Federation ("ITF") and owners of vessels sailing under flags of convenience. ITF is an unincorporated trade union the members of which consist of other trade unions in various countries and has its H.Q. in London. The facts and the circumstances leading to the payment to ITF by the appellant owners of the large tankship " Universe Sentinel" of the sum of US$6,480 presently in dispute have been outlined by my noble and learned friend Lord Diplock and are also to be found in the reports ([1980] 2 Lloyd's Rep. 523) of the case at first instance (Parker J.) and in the Court of Appeal (Megaw, Brightman and Watkins L.JJ.). The size of the sum now claimed suggests that the owners' appeal has the backing of other flag-of-convenience owners who may have paid or may be required to pay similar sums in similar circumstances.

The owners' claim to repayment of the sum mentioned is based upon two contentions. The first contention is that the payment was made to ITF as trustee to be held upon certain supposed trusts, that those trusts were not as such valid or enforceable, and that consequently the sum was held by ITF upon trust for the owners under the principle of a resulting trust. The second contention was that the payment was extorted by ITF by the application of illegitimate and irresistible pressure in that the vessel was taken out of service as long as ITF continued to procure (as ITF would have done unless the owner complied with the ITF demands including payment of inter alia this sum) that tug service would not be available to enable the vessel to sail. Under this head the owner claimed repayment as money had and received.

The first contention I will label the trust point: and the second conten- tion I will label the duress point. I deal first with the trust point which found favour with Parker J. but not with the Court of Appeal.

In order to procure the cessation of blacking of the vessel by the tugs the owner was required by ITF to qualify for a Blue Certificate. The first document was served by ITF on the Captain of the vessel on 17th July 1978 and set out the conditions of such qualification. These were(1) the owners must sign with ITF a Special Agreement undertaking to apply to the crew all sections of the ITF Collective Agreement which were to cover the terms and conditions of employment of the crew.

(2) Insofar as any member of the crew was not eligible to become a member of a union member of ITF, he must be enrolled in the ITF Special Seafarers' Section, which was set up by the seafarers' union members of ITF: such enrolment would entitle those enrolled to trade union representation although not a member of a member union, nor of course of the ITF the membership of which consisted of trade unions. These benefits of " outside " membership " were dependent upon payment on their behalf of entrance and annual fees of US$15 per man and US$30 per man per annum. The Collective Contract of employment required such payments to be made by the owner employer. Thirdly it was noted that the Special Agreement " also covers the owners' contributions to the Seafarers International " Welfare, Protection and Assistance Fund, [at] $162 per man per year. " The Fund was set up to help provide welfare, social and recreational " facilities in ports around the world for seafarers of all nations, especially " those serving in flag-of-convenience ships, and is administered by an " international committee of representatives of ITF-affiliated unions."

It is, my Lords, important to note that the document last summarised is in no way relied upon by the Owners in the pleadings in support of the contention that the Welfare Fund was held upon or intended to be held upon trusts, as distinct from being a fund belonging to ITF at its disposal from time to time as the constituent members pursuant to the contract contained in the constitution of the unincorporated ITF should decide.

On the 28th July 1978 what is referred to as the Special Agreement was signed on behalf of the owners and ITF. The owners undertook to employ each seafarer in accordance with the terms of the ITF Collective Agreement and to incorporate its terms into the individual contract of each seafarer: and " (c) to pay on behalf of each seafarer contributions and fees at the " rates shown in Schedule 2 hereto to the Seafarers' International Welfare " Protection and Assistance Fund and to the Special Seafarers' Section of " the ITF. The contributions and fees shall be paid to the ITF annually " and in advance ". The Schedule described the payments to be made as " ITF Special Seafarers' Section Entrance Fees at 40 X US$15 per man, " 40 X membership fees at US$30 per man, and Seafarers' International " Welfare Protection and Assistance Fund 40 X US$162 per man per " year." This last head of contributions, as distinct from fees, amounted to US$6,480, the sum now in dispute. The owners paid the Special Agreement sums to ITF. (It is suggested on behalf of ITF—though this point relates to the duress point rather than to the trust point—that because the Special Agreement recited under (3) that " ITF and the [owners] desire to regulate the conditions of employment " of all seafarers . . . serving from time to time " aboard the Ship ", that meant that the parties had laid it down that everything that was agreed in the body of the agreement was a condition of such employment, including the agreement to contribute to the Welfare Fund. I cannot accept that suggestion. There is ample in the body of the agreement within the scope of the recital without embracing the contributions which are markedly not within the Collective Agreement.)

On the same day the owners and ITF signed what is referred to as the Typescript Agreement. The function of this was to estimate and provide for the total due to members of the crew applying the new rates since signing on. I need say no more on this save to note that it shows that the amount of the estimate and of the Special Agreement sums (including the Fund contribution of US$6,480) were included in a sum of US$80.000 paid to ITF and accepted as to US$6,480 for Welfare Fund contributions.

Under the Points of Claim the owners alleged that under and by virtue of the Special Agreement ... the sum of US$6,480 was paid by the owners " upon the trusts of the Seafarers International Welfare Protection " and Assistance Fund " and that " the trusts of the Welfare Fund are " declared by a document entitled ' Rules for Seafarers International " ' Assistance Welfare and Protection Fund which was adopted by the ITF " ' in December 1958 '". Accordingly the trust point is squarely based on the allegation that the rules establish a trust fund to be held upon trusts which, however, must in law be held to be ineffective. Those rules have been set out in the speech of my noble and learned friend Lord Diplock.

In connection with those rules it is convenient to note some points in the constitution of ITF. Congress is the supreme authority meeting normally every three years with delegates from the constituent unions members of ITF. Congress appoints members of the General Council, which exercises functions delegated to it by Congress and meets after each ordinary Congress and when called upon to do so by the Executive Board. Then there is the Executive Board which consists of 23 members elected by Congress from among the members of the General Council, plus the General Secretary. This Board, which was formally called the Executive Committee, is the governing body of ITF. The constituent members of ITF are divided into industrial sections of which one is the Seafarers' section and another the Dockers' section.

In 1952 the Dockers' and Seafarers' sections met in Joint Conference with a view to a campaign to deal with flags-of-convenience ships problems. It was agreed to establish a Seafarers' International Welfare Fund as part of the campaign, and that six individuals should be appointed to administer the fund—as I understand it to be known as the Fair Practices Committee and formerly styled the Boycott Committee. At the same conference " Rules to govern the functioning of the Welfare Fund " were approved: these rules were replaced in December 1958. This replacement was the

work of the Executive Committee (Board) of ITF and in their final form have been already set out. Parker J. in concluding that here was an intended trust placed some reliance on the fact that the first draft of the 1958 rules contained a clause to say that the Executive Committee might alter the rules or add to them at any time, which did not appear in the rules as adopted: in my opinion any such reliance in construing the rules is unsound and at least arguably impermissible.

The accounts of the Fund are summarized in the judgment of the Court of Appeal thus:

" We have before us the accounts of the Welfare Fund for the years " 1976, 1977 and 1978. The accounts are headed ' Seafarers " ' International Assistance. Welfare and Protection Fund'. but in fact " the income account includes not only contributions to the Welfare " Fund but also the contributions payable for crew membership of the " Special Seafarers' Section. The latter contributions are relatively " small, amounting in 1978 to under 8 per cent of the total income. " The total income of the Welfare Fund in these years, in round " figures, advanced from £1,700.000 in 1976 to £3,500,000 in 1978; " expenditure on the welfare of seafarers progressed from £263,000 to " £763,000; administration expenses grew from £226,000 to £613,000; " the surplus income added to capital in each of these years went from " £1,200,000 to £2,100,000, being an accumulation of no less than " £5,700,000 over the three years."

I would however comment on that extract that what are referred to as " contributions" payable for crew membership of the Special Seafarers' Section are more accurately described as " fees ".

My Lords,

it is commonplace for a trade union to have, in addition to its general funds, special funds. Indeed in the constitution of ITF special funds are envisaged—see Rule IX (3) and Rule XIII (I). Essentially the internal affairs of the union, including the use and destination of any funds of the union, are dependent not upon the setting up of trust funds but upon the contract between the members found in the constitution.

The Points of Claim, as I have already indicated assert (paragraph 10 c) that the rules of the Welfare Fund declare trusts, and it is upon that assertion that the trust point is based. In my opinion that is a false assertion: the fund is a fund of ITF subject for the time being to an earmarking subject to the contractual arrangements between the members under the constitution. The contribution of the owners to the ITF under this head is not a contribution to ITF upon trust, and is not in law different from a payment generally to ITF. That view may well not assist ITF in argument on the duress point, but in my opinion suffices to deny the trust point to the owners.

I turn next to the second contention of the owners—the duress point. I have earlier in this speech in a parenthesis touched on this point by expressing my opinion that the third recital in the Special Agreement cannot be regarded as establishing that the Welfare Fund contribution relates to the terms and conditions of employment of the crew. For the rest, on this point, I content myself with adopting the speech of my noble and learned friend, Lord Diplock, and on that basis I would allow the appeal. I finally observe that that would have been the view of the four judges below had the Court of Appeal not, in my opinion, misconstrued a passage in a speech of my noble and learned friend, Lord Diplock in N.W.L. Ltd. v. Woods.

Lord Scarman

My Lords,

The decisive question in this appeal is whether in any circumstances, and if in any in what circumstances, an employer who has paid money to a trade union under the compulsion of actual or threatened industrial action can recover the money as having been paid under duress.

My noble and learned friend. Lord Diplock, has stated the facts and outlined the history of the litigation. It is nevertheless necessary for me. as I am respectfully dissenting from his conclusion that the appeal should be allowed, to state briefly those facts upon which I base my view that the appeal should be dismissed.

The original claim of the appellant shipowner (" the owner ") against the respondent trade union (" the ITF ") was for: — (i) a declaration that two agreements (the "special agreement" and the " typescript agreement") are invalid;

(ii) a declaration that the ITF hold on trust for the owner the sum of US$80,000 paid to the ITF by the owner pursuant to the special

agreement;

(iii) $80,000, a sum certain together with interest.

There was also a claim for damages and for certain other declaratory relief. By the time the case reached your Lordships' House one issue alone remained, namely whether the ITF is liable to repay to the owner the sum of US$6,480, being that part of the $80,000 which constituted a contribution which the owner was required to make to the Seafarers' International Welfare, Protection and Assistance Fund (the " Welfare Fund") under the terms of the " special agreement". Parker J. held at first instance that the sum must be repaid. The Court of Appeal allowed the appeal of the ITF and held that it is irrecoverable.

The appellant owner puts his case in two ways: —

(1) the trust point: the sum of $6,480 was paid, it is submitted, upon the trusts of the Welfare Fund: those trusts are void and of no effect: accordingly the sum is held upon resulting trusts for the owner;

(2) the duress point: the two agreements, it is submitted, were signed and the moneys paid under duress: accordingly the owner can recover the $6,480 as money had and received to his use.

I have had the advantage of reading the opinions of my noble and learned friends Lord Cross of Chelsea and Lord Russell of Killowen on the trust point and I agree with them. There is, in my opinion, no resulting trust. It follows that to recover the sum of $6,480 the owner must show a common law right to recover the sum as money paid under duress.

The facts follow a familiar pattern, although the relief and remedies sought are unusual in this area of litigation. Questions as to the validity of trusts are more frequently raised in the quiet waters of family settlements, gifts, and bequests to charity than on the turbulent seas navigated by the ITF. It is highly artificial to impute to this owner any intention of gift or settlement. His common law claim accurately reflects the true nature of his case; and it is, so far as I am aware, the first time that a shipowner has sought in the English courts to recover as money had and received a sum paid to a trade union to secure the release of his ship from a blacking procured by the trade union. The claim raises an important question as to the inter-relation of the law of duress with the statutory immunities enjoyed under English law by persons acting in contemplation or furtherance of a trade dispute.

The owner, a company incorporated in Liberia, owns and operates the tankship "Universe Sentinel". 269,092 tons deadweight. The ship is registered in Liberia and sails under the Liberian flag. The ITF is an international federation of national trade unions which represent transport workers, including seamen, in many countries of the world. The ITF is a trade union for the purposes of the Trade Union and Labour Relations Act 1974 ("the Act"), even though it has no individual members. It maintains, however, a Special Seafarers' Section in which seafarers who are not eligible for membership of an ITF affiliate union may be enrolled. The purpose of the Special Section is to provide trade union representation for

crews of flag-of-convenience ships who have no national union which they can join.

The policy of the ITF towards ships which sail under what it regards as flags of convenience has been described by my noble and learned friend, Lord Diplock. in N.W.L. Ltd. v. Woods

[1979] 1 WLR 1294

at 1297C. It seeks to compel the owners of such ships to employ seamen on terms comparable to those contained in collective agreements negotiated by its affiliate unions for ships registered in Western Europe. To this end the ITF seeks to procure the "blacking" of flag-of-convenience ships whose owners have not accepted ITF terms.

The " Universe Sentinel " was regarded by the ITF as sailing under a flag of convenience. On the 17th July 1978 she docked at Milford Haven. By the afternoon of the 18th July she was ready to sail. But she could not because she was "blacked". The ITF had procured those who were operating the tugs at Milford Haven to refuse, in breach of their contracts of employment, to make tugs available to assist the ship's departure from port.

The blacking of the ship followed upon a presentation by an ITF representative to the master of the union's demands. These were contained in an ITF document entitled : —

" Conditions to be fulfilled before flag-of-convenience vessels can be " issued with ITF Blue Certificates— effective from 1st September 1977."

A blue certificate is a notice that terms of employment on board ship comply with ITF requirements. The conditions included a requirement that the owner sign a " special agreement " undertaking to apply all sections of the ITF Collective Agreement to all seafarers on board the ship; a requirement that any seafarers not eligible for membership of an ITF affiliate union must be enrolled in the ITF Special Seafarers' Section: a requirement that the owner pay each crew-member's union entrance fee and annual subscrip- tions : and a requirement that the owner contribute annually to the Welfare Fund which was described as having been set up " to help provide welfare, " social and recreational facilities in ports around the world for seafarers " of all nations, especially those serving in flag-of-convenience ships ". The document made it very clear that unless and until the owner signed the " special agreement " incorporating these requirements, a printed draft of which the ITF provided for the owner to fill in the blanks and sign, and paid the moneys demanded, no blue certificate would be issued and the blacking would continue.

By the 29th July the owner had complied with these demands and the ship was able to sail. The owner had on the 28th signed two agreements and paid by cheque to the order of the ITF the sum of US$80,000.

The first of the two agreements was the " special agreement ". It recited that " the ITF and the Company desire to regulate the conditions of employ- " ment of all seafarers . . . serving from time to time aboard the ship " and included seven articles of agreement and two schedules.

(c) and Schedule 2 : —

" Article 1 ...

" c to pay on behalf of each Seafarer contributions and fees at the " rates shown in Schedule 2 hereto to the Seafarers' International " Welfare Protection and Assistance Fund and to the Special Seafarers' " Section of the ITF. The contributions and fees shall be paid to the " ITF annually and in advance; "

" Schedule 2

" ITF SPECIAL SEAFARERS' SECTION

"Entrance fees

40 at US $15 per man US $

"Membership fees

40 at US $30 per man per year US $ .

" Seafarers' International Welfare Protection and Assistance Fund

40 at US $162 per man per year US $

" Total

US $8280 "

The $6,480 now claimed is the total of the contributions to the Fund included in the $80,000 paid to the Union.

The second agreement (the " typescript agreement", so called to distinguish it from the printed draft of the special agreement) confirmed receipt of the $80,000 and included provisions for calculating the wages and other benefits due to crew-members under the ITF Collective Agreement.

In his written case the owner has, in my view correctly, summarised the effect of these transactions as follows: —

he yielded to the demands made upon him as being the only means open to him of regaining the use of his ship;

the loss of use of his ship was to him so disastrous that he had no practical option but to submit;

the acts done by the ITF to deny him the use of his ship were, subject to any statutory immunity which the ITF might enjoy, tortious.

In a sentence, he had no choice but to submit to the economic pressure applied by the prima facie unlawful acts of the union. The ITF, as I understand their case, do not challenge that such was the effect of what they did but deny that they acted unlawfully or that their pressure was illegitimate. They rely on the policy of the law granting statutory immunity from tortious liability to persons acting in contemplation or furtherance of a trade dispute; section 13(1) of the Act as amended in 1976.

The issue between the parties is a narrow one. Was the dispute over the contributions to the Welfare Fund a trade dispute within the meaning of section 29 of the Act? The owner conceded that, if it was, the moneys paid would be irrecoverable. The issue turns upon analysis of what the parties agreed and upon the proper construction of section 29 of the Act.

Before turning to this issue, it is necessary to state, albeit very briefly, my view as to the nature of the modern law of duress.

It is, I think, already established law that economic pressure can in law amount to duress; and that duress, if proved, not only renders voidable a transaction into which a person has entered under its compulsion but is actionable as a tort, if it causes damage or loss: Barton v. Armstrong

[1976] AC 104

, and Pao On v. Lau Yiu Long

[1980] AC 614

. The authorities upon which these two cases were based reveal two elements in the wrong of duress: —

pressure amounting to compulsion of the will of the victim; and

the illegitimacy of the pressure exerted.

There must be pressure, the practical effect of which is compulsion or the absence of choice. Compulsion is variously described in the authorities as coercion or the vitiation of consent. The classic case of duress is, however, not the lack of will to submit but the victim's intentional submission arising from the realisation that there is no other practical choice open to him. This is the thread of principle which links the early law of duress (threat to life or limb) with later developments when the law came also to recognise as duress first the threat to property and now the threat to a man's business or trade. The development is well traced in Goff and Jones, The Law of Restitution, 2nd edition, chapter 9.

The absence of choice can be proved in various ways, e.g. by protest, by the absence of independent advice, or by a declaration of intention to go to law to recover the money paid or the property transferred: see Maskell v. Horner [1915] 3 K.B. 106. But none of these evidential matters

goes to the essence of duress. The victim's silence will not assist the bully, if the lack of any practicable choice but to submit is proved. The present case is an excellent illustration. There was no protest at the time, but only a determination to do whatever was needed as rapidly as possible to release the ship. Yet nobody challenges the judge's finding that the owner acted under compulsion. He put it thus:

" It was a matter of the most urgent commercial necessity that the " plaintiffs should regain the use of their vessel. They were advised " that their prospects of obtaining an injunction were minimal, the " vessel would not have been released unless the payment was made, " and they sought recovery of the money with sufficient speed once " the duress had terminated."

The real issue in the appeal is, therefore, as to the second element in the wrong duress: was the pressure applied by the ITF in the circumstances of this case one which the law recognises as legitimate? For, as Lords Wilberforce and Simon of Glaisdale in Barton v. Armstrong, supra, p.121 said:

"... the pressure must be one of a kind which the law does not

" regard as legitimate."

As the two noble and learned Lords remarked doc. cit.), in life, including the life of commerce and finance, many acts are done "under pressure, "sometimes overwhelming pressure": but they are not necessarily done under duress. That depends on whether the circumstances are such that the law regards the pressure as legitimate.

In determining what is legitimate two matters may have to be considered. The first is as to the nature of the pressure. In many cases this will be decisive, though not in every case. And so the second question may have to be considered, namely, the nature of the demand which the pressure is applied to support.

The origin of the doctrine of duress in threats to life or limb, or to property, suggests strongly that the law regards the threat of unlawful action as illegitimate, whatever the demand. Duress can, of course, exist even if the threat is one of lawful action: whether it does so depends upon the nature of the demand. Blackmail is often a demand supported by a threat to do what is lawful, e.g. to report criminal conduct to the police. In many cases, therefore, " what [one] has to justify is not the " threat, but the demand ..." Lord Atkin, Thome v. Motor Trade Association

[1937] A.C 797

, 806.

The present is a case in which the nature of the demand determines whether the pressure threatened or applied, i.e. the blacking, was lawful or unlawful. If it was unlawful, it is conceded that the owner acted under duress and can recover. If it was lawful, it is conceded that there was no duress and the sum sought by the owner is irrecoverable. The lawfulness or otherwise of the demand depends upon whether it was an act done in contemplation or furtherance of a trade dispute. If it was, it would not be actionable in tort: section 13(1) of the Act. Although no question of tortious liability arises in this case and section 13(1) is not, therefore, directly in point, it is not possible, in my view, to say of acts which are protected by statute from suit in tort that they nevertheless can amount to duress. Parliament having enacted that such acts are not actionable in tort, it would be inconsistent with legislative policy to say that, when the remedy sought is not damages for tort but recovery of money paid, they become unlawful.

In order to determine whether the making of the demand was an act done in contemplation or furtherance of a trade dispute, it is necessary to refer to section 29 which sets out the statutory meaning of " trade dispute ".

The issue therefore is reduced to the one question. Was the demand for contributions to the Welfare Fund connected with one or more of the matters specified in section 29 of the Act? It is common ground that unless

the demand was connected with " terms and conditions of employment" it was not within the section.

Parker J. found it " plain " that a dispute about payments to the ITF for the Welfare Fund would not be connected with any of the matters mentioned in section 29. The Court of Appeal would have been disposed to take the same view, if they had not felt that they were precluded from doing so by the guidance given in B.B.C. v. Hearn [1977] 1 W.L.R. 1004, by Roskill L.J. at p.1015 and in N,W.L. v. Woods, supra, by Lord Diplock at p. 1302. While I am prepared to accept, for the reasons given by my noble and learned friend, Lord Diplock, that the Court of Appeal misunder- stood the guidance given in those two cases, it does not follow that the payments to the Welfare Fund were unconnected with the terms and conditions of employment of the crew-members of the ship.

It is not necessary to spend time on the construction of section 29. It has been accepted since B.B.C. v. Hearn that "terms and conditions of " employment" is a phrase of wide meaning and includes not only the rights but also the customary benefits and reasonable expectations provided by reason of his employment to the employee by his employer. But it is said that in this case the employer's obligation was to the union, not to the employee. The argument may be summarised as follows: —

the crew-members are not obliged to make the contributions, which are an exaction by the ITF from the owner and not an undertaking by the owner to discharge an obligation owed by crew-members to their union;

unlike union entrance fees and annual subscriptions, they are not mentioned in the Collective Agreement;

they are not benefits made available by an employer expressly, impliedly, or by customary practice to his employee, but merely contribu- tions exacted by a trade union from an employer to its funds;

if the contributions are of any benefit to seafarers on board the ship, the benefit is marginal, if not infinitesimal;

in so far as the Fund is beneficial to anyone other than the union whose fund it is, it benefits all seafarers without anything special or exclusive to those employed on the " Universe Sentinel ".

The demand that the special agreement be signed was one which certainly related to the terms and conditions of employment on board the ship. The parties were well aware that the Special Agreement was, as recited, intended to regulate the conditions of employment: and its terms were such that it clearly did specify the terms and conditions on which crew members were to be employed. But did the demand for contributions to the Welfare Fund relate to their terms and conditions of employment? The question cannot be answered save by an examination of the circum- stances in which it was made.

It is of some significance, though not in itself decisive, that the demand is to be found in the same set of documents as the other demands as to rates of pay and the payment of union fees which were indisputably connected with terms and conditions of employment. However, it would be wrong (quite apart from any question of duress) to adopt towards the documents of agreement in this case the strict approach which the law requires in determining the true construction of a commercial contract. What calls for analysis and explanation is the nature of the demand. And this can only be understood by a common-sense approach, after considering such ancillary questions as whether the demand was made merely for the union's benefit or was made for the benefit, or on behalf, of the workers whose terms and conditions of employment the union was admittedly seeking to regulate by the documents which contain the demand.

The demand was expressed to be made " on behalf of each seafarer " on board ship. It was for contributions to a fund which, though not a trust fund, existed, as a matter of contract between the affiliate unions of the ITF, for the benefit of seafarers. There was no indication in the

evidence that the ITF had any intention of scrapping the Fund or going back on their word to apply the payments in the manner and for the purpose stated in the Special Agreement. I have no doubt that their intentions in regard to the Fund were as set out in the " Blue Certificate " Conditions " and the Special Agreement. There is certainly no evidence to the contrary: and it would be unjust to the point of cynicism to impute to the ITF any intention other than to use the Fund for the purpose set forth in those conditions.

I turn, therefore, to the five points enumerated above. Do they constitute a case against the view that the obligation accepted by the owner under the pressure of blacking his ship to contribute to the Fund was related to the terms and conditions of employment on board the ship?

(1) and (2). The fact that there is no obligation upon crew members to contribute to the Fund proves nothing. The demand upon the owner to contribute was made by the union for the benefit of the crew and on their behalf and incorporated in the Special Agreement. Each seaman secured a written contract, the terms of which were "the current ITF " Collective Agreement, brought into force by the Special Agreement . . . ". The owner was obliged to display aboard the ship copies of the Special Agreement, the ITF Collective Agreement and the Blue Certificate in a prominent place accessible to all seamen. Bearing in mind the very wide meaning given by the law to terms and conditions of employment (see B.B.C. v. Hearn, supra), I find it totally unreal to infer that because the seamen are themselves not obliged to contribute to the Fund the obligation accepted by the owner to contribute " on behalf of each seafarer " was not an obligation related to the conditions of employment. The owner has undertaken, albeit under pressure, to make payments on behalf of each seaman which could be of benefit to him: and the undertaking was recognised as a term of the total bargain between the union and the owner on the basis on which the seamen were to be employed. Further, it can be of no importance that the Collective Agreement makes no mention of the obligation, when it is incorporated in the Special Agreement which is not only mentioned in the seaman's contract but has to be published on board the ship.

Finally, could it be said, I ask, that the obligation to contribute "on " behalf of each seafarer" to the Fund would not be a condition of employment if it had been mentioned in the ITF Collective Agreement? I suggest not. And, if it be capable of being a condition of employment, I would think its presence in the Special Agreement, of which each seaman had notice, would constitute sufficient notice to make its absence from the ITF Collective Agreement immaterial.

(3) - (5). It is a necessary part of the immediately preceding argument that payments to the union for the Fund were made on behalf of crew- members and were intended to be for their benefit. The Fund is governed by rules which the ITF, if it acts in accordance with the rules, can amend. The objects of the Fund, as defined by the rules, are very wide (" promoting "... by any such means as the Executive Committee in their absolute " discretion may decide, the interests of seafarers ": Rule 2): and there is no legal principle to prevent the ITF, if it acts constitutionally, from winding up the Fund and transferring its substantial cash assets to itself. But the Fund does exist: it is used to provide amenities in many ports for seamen: there is no indication that the union has any present intention other than to maintain the Fund in the interests of seafarers: and without contributions obtained from owners there would be no Fund available for their welfare. I am not prepared, on the evidence, to find that the payment of contributions to the Fund is of no benefit to seafarers in general, or to the crew-members of this ship, even though I recognise that some may never benefit from it.

For these reasons I conclude that the demand for contributions related to the terms and conditions of employment on the ship, and, if it had been resisted by the owner, would have led to a trade dispute. Blacking the

ship in support of the demand was, therefore, not actionable in tort. It was, accordingly, a legitimate exercise of pressure and did not constitute duress. The owner cannot recover the contributions. I would dismiss the appeal.

Lord Brandon of Oakbrook

My Lords,

This appeal arises out of the blacking at the port of Milford Haven in July 1978 of the tankship " Universe Sentinel", which I shall call " the " ship ". The ship was owned by the respondent corporation, which I shall call " the shipowning company ". The blacking, which took the form of a refusal by tugs' crews to give to the ship the assistance which she needed in order to leave the port, was instigated by the appellant federation, which I shall call "the ITF", in the course of its long-continuing campaign against what it regards as " flag of convenience " ships and their owners.

By the 28th July 1978, as a result of the blacking, the ITF had compelled the shipowning company, as the price of putting an end to the severe financial loss caused to it by the detention of the ship, to comply with two demands presented to it by the ITF. The first demand was that the shipowning company should enter into two written agreements with the ITF relating to improvements in the pay and other terms and conditions of employment of those on board the ship. Those agreements have been called " the Special Agreement" and " the Typescript Agreement" respectively. Their effect was to oblige the shipowning company to substi- tute for the rates of pay and other terms and conditions of employment prescribed by the existing contracts of employment of those on board the ship the higher rates of pay and improved other terms and conditions of employment, approved by the ITF and laid down by it in what is known as the ITF Collective Agreement.

The second demand was that the shipowning company should pay forth- with to the ITF the sum of US$80,000. This sum was made up of three separate items: first US$71,720, being an estimate of the back-pay due to those on board the ship on the footing that the agreed higher rates of pay should be applied retrospectively; secondly, U.S.$1,800 in respect of entrance and membership fees payable by those on board the ship to the Special Seafarers' Section of the ITF; and, thirdly, U.S.$6,480 paid by way of contributions to a fund of the ITF known as the Seafarers' Inter- national Welfare Protection and Assistance Fund, which I shall call " the " Fund ".

Following compliance by the shipowning company with the two demands referred to above, the blacking of the ship was lifted, the necessary tug assistance became available and the ship, which had been detained in the port of Milford Haven for about ten days, left that port and resumed her interrupted voyage.

It had been the intention of the shipowning company all along, while acceding to the ITF's demands in order to obtain the release of the ship, to claim back later by legal proceedings the sum of U.S.$80,000 which it had been compelled to pay. In accordance with that intention the ship- owning company subsequently began an action against the ITF and one of its officers in the Commercial Court, claiming inter alia on various legal grounds repayment of the whole or part of the sum of U.S.$80,000 which had been exacted from it.

The action was tried by Parker J. and, either before or in the course of the trial, the matters in dispute between the shipowning company and the ITF were narrowed down to four questions of which only the first three are now material. These three questions were:

(1) Was the shipowning company entitled to recover back from the ITF the sum of U.S.$6,480 which it had paid by way of contributions

to the Fund, on the ground that such sum was paid for the purposes of a void trust and was therefore held by the ITF on a resulting trust for the benefit of the shipowning company?

Was the dispute between the shipowning company and the ITF, in so far as it related to the payment of the sum of U.S.$6,480 by way of contributions by the shipowning company to the Fund, a trade dispute within section 29(1) of the Trade Union and Labour Relations Act 1974 (" the 1974 Act")?

If the answer to question (2) was in the negative, was the payment of the sum of U.S.$6,480 induced by duress, and therefore recoverable as money had and received by the ITF to the use of the shipowning company?

Parker J. answered all three questions in favour of the shipowning company: that is to say he gave an affirmative answer to question (1), a negative answer to question (2) and an affirmative answer to question (3).

The ITF appealed against the decision of Parker J. to the Court of Appeal, consisting of Megaw, Brightman and Watkins L.JJ. By the judgment of that court, which was delivered by Megaw L.J., the ITF's appeal was allowed. Question(1) was answered in the negative and question

(2) in the affirmative, with the result that it was not necessary to answer question (3). The shipowning company now appeals, with the leave of the Appeal Committee, against the judgment of the Court of Appeal, seeking to have the judgment of Parker J. in its favour restored.

It is necessary to state, by way of preliminary matter, that the parties, for the purposes of the ITF's present appeal to your Lordships' House, have agreed to treat as correct the following four propositions of law. First, that, if the sum of U.S.$6,480 paid by the shipowning company to the ITF was paid for the purposes of a trust, such trust was not a charitable one, and the consequence of that was that the sum was held by the ITF on a resulting trust for the benefit of the shipowning company. Secondly, that severe economic pressure could amount to duress in law. Thirdly, that, if the relevant economic pressure was applied in furtherance of a trade dispute within the meaning of section 29(1) of the 1974 Act, it would not constitute duress in law, and any sum exacted by such pressure would not be recoverable. But, thirdly, that, if the relevant economic pressure was applied in furtherance of a dispute which was not a trade dispute within the meaning of section 29(1), any sum exacted as a result of such pressure would be recoverable as money had and received by the payee to the use of the payor. The effect of this last agreed proposi- tion was to give an agreed affirmative answer to question (3).

My Lords,

there can, I think, be no doubt about the correctness of the first and second of these four agreed propositions of law. With regard to the other two propositions, however, the fact that the parties were agreed about them has meant that your Lordships have not heard any argument either supporting or attacking the correctness of them. In these circumstances, while I think that your Lordships should accept, for the purposes of this appeal alone, that the last two propositions of law agreed between the parties are correct, it should be made quite clear that your Lordships are not necessarily, by doing so, giving the seal of your approval to those propositions.

I turn now to consider the only two questions now remaining in dispute, namely, question(1) (the trust point) and question

(2) (the duress point).

With regard to question (1), the administration of the Fund was governed by a body of rules, six in number, which I shall call " the Fund " Rules ". The terms of the Fund Rules are set out in full in the judgment of Parker J. (see [1980] 2 Lloyd's Rep. 527), and it is therefore not necessary that I should set them out in full again here. The view of the Court of Appeal about the effect of the Fund Rules can be summarised in this way. The Fund had been set up by the Executive Board (then the

Executive Committee) pursuant to its power to create or provide for special funds in connection with industrial sections or special departments. The Executive Committee had power to set up such a fund, either by way of trust or by way of contract between the affiliated unions. The language of the Fund Rules was capable of being interpreted in either way. To interpret them as creating a trust would, however, defeat the whole purpose for which the Fund was set up, whereas to interpret them as creating a contract would give effect to such purpose. It was an established principle of construction that, where an instrument was capable of two interpretations, one of which would give effect to the purpose of the persons who drew it up, and the other of which would frustrate such purpose, to prefer the former interpretation to the latter. Parker J. was, therefore, wrong to interpret the Fund Rules as purporting to create a trust which was void, and the right way to interpret them was as creating a contract between the affiliated unions which was valid (see [1980] 2 Lloyd's Rep. 540-541).

I find myself in complete agreement with that analysis by the Court of Appeal of the effect of the Fund Rules, and it follows that I think that that court was right to answer question (1) in the negative.

It remains to consider question (2), namely, whether the dispute between the shipowning company and the ITF, in so far as it related to the payment of US$6,480, by way of contributions to the Fund, was a trade dispute within section 29(1) of the 1974 Act. In considering that question it is, in my view, essential to take two matters fully into account. Those matters are, first, so much of the terms of the Special Agreement and the Typescript Agreement as is relevant to the obligation of the shipowning company to make contributions to the Fund, and secondly, the indication of the purposes of the Fund contained in the Fund Rules.

The Special Agreement begins by setting out the names and addresses of the parties to it and indicating that the shipowning company will in the remainder of the agreement be referred to as " the Company". The agreement then continues as follows:

" WHEREAS

" 2. the Company is the registered owner/manager of the Ship; " described in Schedule 1 hereto;

" 3. the ITF and the Company desire to regulate the conditions of "employment of all seafarers (hereinafter individually called a " ' Seafarer ') serving from time to time aboard the ship;

" NOW IT IS AGREED

" Article 1: The Company undertakes as follows:

" (a) to employ each Seafarer in accordance with the terms of the " current ITF Collective Agreement for World Wide trading (hereinafter " called ' the ITF Collective Agreement') as amended from time to time

" (b) to incorporate the terms and conditions of the ITF Collective " Agreement into the individual contract of employment of each " seafarer and into the Ship's Articles and furnish copies of these " documents to the ITF. Any seafarer, enjoying terms and conditions " which are, taken as a whole, recognised by the ITF as more favourable " to the seafarer, shall continue to enjoy such terms and conditions.

" (c) to pay on behalf of each Seafarer contributions and fees at the " rates shown in Schedule 2 hereto to the Seafarers' International " Welfare Protection and Assistance Fund and to the Special Seafarers' " Section of the ITF. The contributions and fees shall be paid to the " ITF annually and in advance;

" (d) to display aboard the Ship copies of the Special Agreement, " the ITF Collective Agreement and the ITF Blue Certificate to be " issued under Article 2 hereof in a prominent place to which each " Seafarer shall have access at all times; and

" (e) to grant to representatives of the ITF and of trade union " organisations affiliated to the ITF free access to each Seafarer at all " reasonable times whether or not aboard the Ship, whether the Ship " is in berth or not.

" Article 2: the ITF undertakes, having received and approved the " copies of the documents referred to in Article Kb) above, and received " the fees and contributions payable under Article 1 (c) above, to issue " and each year to renew an ITF Blue Certificate . . . certifying that " the Ship is covered by a Collective Agreement acceptable to the " ITF. . . . "

Following Articles 1 and 2 quoted above there come four further Articles numbered 3 to 7, the terms of which it is not necessary to set out. Then, on the second page of the Agreement there appear two Schedules numbered 1 and 2 respectively. Schedule 1 contains a description of the ship. Schedule 2 is in this form: —

"Schedule 2 " ITF SPECIAL SEAFARERS' SECTION

" Entrance fees 40 at US$15 per man

US$

" Membership fees 40 at US$30 per man per year

US$

" SEAFARERS' INTERNATIONAL WELFARE PROTECTION AND ASSISTANCE FUND 40 at US$162 per man per year

US$

"TOTAL:

US$8,280"

Although the relevant sub-totals were left blank in Schedule 2, it is apparent that the total of US$8,280 was made up of entrance and membership fees in respect of the Special Seafarers' Section of US$600 and US$1,200 respectively, and contributions to the Fund of US$6,480.

The Typescript Agreement begins by setting out the names and addresses of the parties to it. It then continues with the following heading and first paragraph:-

" IN RESPECT OF THE LIBERIAN FLAG " TANKER ' UNIVERSE SENTINEL '

" The ITF confirms receipt to-day of US$80,000 . . . which is " accepted by the ITF as to the one part of $8,280 for the Union " Entrance Fees, Annual Subscriptions and Welfare Fund Contributions, " and as to the other part of $71,720 as a discretionary trustee. The " beneficiaries are the Master, Officers, Engineers and crew members on " board on 28th July 1978."

Rule 2 of the Fund Rules provided : —

" The object of the Fund shall be the financing of any such work " as may be sanctioned by the Executive Committee of the Federation " for the purpose of promoting, advancing or protecting by any such " means as the Executive Committee in their absolute discretion may " decide, the interests of seafarers generally or groups of seafarers, " national or otherwise, or of assisting individual seafarers, or otherwise " of serving seafarers' interests."

Section 29(1) and (4) of the 1974 Act provide: —

" (1) In this Act ' trade dispute ' means a dispute between employers " and workers, or between workers and workers, which is connected " with one or more of the following, that is to say—

" (a) terms and conditions of employment . . . .

" (4) A dispute to which a trade union ... is a party shall be treated " for the purposes of this Act as a dispute to which workers ... are " parties."

The dispute in the present case, in so far as it related to the payment by the shipowning company of US$6,480 by way of contributions to the Fund, was a dispute between an employer and a trade union. The effect of section 29(4) above is that the dispute concerned must be treated as a dispute between employers and workers for the purposes of section 29(1). It follows that the only issue to be determined in relation to question (2) is whether the dispute between the shipowning company and the ITF about the payment of those contributions was, to use the words of section 29(1)(a), connected with terms and conditions of employment.

It has been established by authority that the expression " terms and "conditions of employment", as used in section 29(l)(a) of the 1974 Act, is to be given the widest possible construction: see BBC v. Hearn

[1977] 1 WLR 1004

per Lord Denning M.R. at p. 1010 and Roskill L. J., as he then was, at p. 1015. The relevant observations of Lord Denning M.R. in that case were expressly approved by your Lordships' House in the recent case of Hadmor Productions Ltd v. Hamilton [1982] 2 W.L.R. 322 in a speech of Lord Diplock with which all the other four members of the Appellate Committee agreed. The effect of giving the expression concerned the very wide meaning which these authorities show that it should be given is that any arrangement which affects, directly or indirectly, the benefits which a worker enjoys in connection with his employment, can properly be treated as a condition of such worker's employment for the purposes of section 29(l)(a) of the 1974 Act, even though there is no reference to such arrangement, expressly or by incorporation, in the contract under which the worker is employed.

My Lords,

it appears to me to be crystal clear that the parties themselves regarded the dispute, in so far as it related to the payment by the shipowning company of contributions to the Fund, as being a dispute connected with the terms and conditions of employment of those on board the ship, both those on board her at the time and those contemplated as being on board her from time to time in the future. I say that for two reasons. The first reason is to be found in the terms of the Special Agreement. The recital numbered 3 in that agreement stated unequivocally that the purpose of the parties in entering into the agreement was to regulate the conditions of employment of all seafarers serving from time to time aboard the ship. It is, in my view, a necessary inference from this that the parties, in agreeing to the substantive provisions of the agreement contained in Articles 1 to 7, were intending to give effect, directly or indirectly, to their previously recited purpose. The obligation of the shipowning company to make contributions to the Fund was imposed by paragraph (c) of Article 1, which is sandwiched between other obligations of the shipowning company imposed by paragraphs (a) and (b) of Article 1 above and paragraphs (d) and (e) below. These five paragraphs of Article 1 must, in my view, be regarded as a package of terms imposed by the ITF on the shipowning company for the benefit of those who were then, or would be later, employed on board the ship and, having regard to the stated purpose of the agreement, namely, the regulation of the conditions of employment of such persons, it must be inferred that the parties intended those paragraphs to form part of the process of giving effect to that purpose.

The second reason is to be found in the terms of the first paragraph of the Typescript Agreement, which I also set out earlier. Here again the whole tenor of the paragraph is only consistent with the conclusion of a package deal in which both the payment of the union entrance and membership fees on the one hand, and the payment of contributions to the Fund on the other hand, are treated as having the same quality.

(l) (a) of the

1974 Act. If that concession was rightly made, as I consider that it was, then it seems to me that it is impossible to treat as having a different quality the closely linked obligation of the shipowning company to pay contributions to the Fund.

Two main arguments were, however, advanced on behalf of the ship- owning company in order to show that, whatever the parties themselves may have intended, the obligation of the shipowning company to pay contributions to the Fund did not come within the expression "terms "and conditions of employment" as used in section 29(l)(a) of the 1974 Act. The first argument was that the obligation was not contained in the then current ITF Collective Agreement and was not therefore incorporated into the individual contracts of those on board the ship. The second argument was that there was nothing to show that those on board the ship would ever receive any benefit from the contributions to the Fund made by the shipowning company.

With the greatest respect to those of your Lordships who think otherwise, I do not find these arguments convincing. So far as the first argument is concerned, it seems to me that it is inconsistent with the established principle, to which I referred earlier, that the expression " terms and "conditions of employment" as used in section 29(l)(a) of the 1974 Act, should be given the widest possible meaning. So far as the second argument is concerned, I accept that it cannot be established affirmatively that persons employed as seafarers on board the ship, either in July 1978 or subsequently, have benefited, or will necessarily benefit in the future, from the contributions made by the shipowning company to the Fund. On the other hand, the Fund has been established and maintained for the benefit of such persons, and is funded solely by contributions from shipowners. In these circumstances it seems to me that the existence of the Fund, maintained by contributions from the shipowning company here concerned and many other shipowners upon whom the same obligation to contribute has been imposed, should be regarded as constituting at least a potential fringe benefit to workers on board the ship.

On the footing, firstly, that the contributions to the Fund can fairly be regarded as going to maintain a potential fringe benefit for those on board the ship, and, secondly, that the fact that the shipowning company's obligation to make such contributions is not written into either the ITF Collective Agreement or the individual contracts of those persons is not of itself a reason for excluding such obligation from the expression " terms "and conditions of employment" as used in section 29(l)(a) of the 1974 Act, I am of opinion that such obligation can and should be categorised by the court, as it was by necessary implication categorised by the parties themselves, as a term or condition of employment of those on board the ship within the meaning of that statutory provision.

My Lords,

the effect of the views which I have expressed is that the shipowner fails both on the resultant trust point (question(1) and on the duress point (questions

(2) and (3)). It follows that I would dismiss the appeal.

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