Scottish Court of Session Decisions

At advising on 7th November 1951,—

LORD JUSTICE-CLERK (Thomson).—[After the narrative quoted supra]

The pursuer's case is that the defenders are not entitled to refuse their concurrence in uplifting the money, as the provision in the contract under which the deduction was made from his salary is struck at by the Truck Acts. It was not disputed that these Acts would have applied had the pursuer's work as an electric welder been due to be performed and paid for in Great Britain. Accordingly the major issue in the case is whether the Truck Acts apply where, as here, the workman performs his work abroad and where part at any rate of his remuneration is paid abroad.

It was argued to us that, looking to the history and development of the Truck Acts, the present situation could never have been in the contemplation of Parliament and that what comes within the purview of the Acts is the case of a workman working for a wage in this country. Reliance was placed on the terms of section 27 of the 1831 Act, which limits the application of the Act to Great Britain. (I need not consider the subsequent provisions as to Ireland.) It was said, too, that the insistence of the Acts on payment in current coin of this realm, together with the exceptions allowed as regards certain equivalents, was inconsistent with the idea of the extension of the Acts to foreign countries. Reliance was also placed on the penal provisions and on the provisions for inspection of contracts. Such provisions were also said to point to the domestic character of the legislation and to its being unworkable in the case of work to be performed abroad.

Before passing to an examination of these arguments, it is desirable to consider in some detail the relevant provisions of the Acts. Section 1 of the 1831 Act provides generally that "in all contracts hereafter to be made for the hiring of any artificer or for the performance by any artificer of any labour, the wages of such artificer shall be made payable in the current coin of this realm only, and not otherwise." The object of this provision is to make certain that the artificer gets his wages in cash and not in kind, and this is done by prescribing payment in the current coin of the realm. The section then goes on to say that "if in any such contract the whole or any part of such wages shall be made payable in any manner other than in the current coin aforesaid, such contract shall be and is hereby declared illegal, null and void."

It is to be observed that the section is in very wide and comprehensive terms.

Section 2 provides that "if in any contract hereafter to be made between any artificer and his employer any provision shall be made directly or indirectly respecting the place where, or the manner in which, or the person or persons with whom the whole or any part of the wages due or to become due to any such artificer shall be laid out or expended, such contract shall be and is hereby declared illegal, null and void."

This section is concerned with attempts to control the use to be made by the artificer of his wages. It would appear to strike at a provision like the one under consideration and indeed it was agreed that that was its effect.

Accordingly, the effect of sections 1 and 2 is that all contracts must provide that the artificer is to get his wages in current coin and there must be no strings attached. These two sections deal with the contract. Section 3 leaves the contract and its terms and deals with the payment of wages in coin. The whole of the wages must be paid in current coin of this realm, and payment in goods or otherwise than in current coin, except as specially provided in the Act, is declared illegal, null and void.

As Lord Atkin points out in Pratt v. Cook, Son & Co . (at p. 444), this section "makes effective the prohibition which in s. 1 was confined to contracts by providing that the entire amount of the wages earned by or payable to any artificer shall be actually paid to such artificer in the current coin of the realm. It thus would prohibit all deductions, but it goes on to say that every payment made to any such artificer of or in respect of wages, by the delivering to him of goods, or otherwise than in the current coin aforesaid, except as hereinafter mentioned shall be illegal. The reference to the exception appears to be s. 8, which permits payment of wages to be in bank notes if the artificer consents." As Lord Wright puts it (at p. 452):

"Sect. 2, like s. 1, deals with the provisions of the contract. A contract coming within the Act is to be illegal, null and void, if it contains provisions as to the place where and the manner in which the whole or part of the wages are to be expended. Sect. 3 deals not with the contract but with payment of the contracted wages.…"

Section 4 provides the machinery by which the artificer is able to recover so much of the wages as shall not have been paid to him in current coin.

Section 8 permits payment under certain conditions by bank notes. Some stress was laid on the local limitation as pointing to the localised scope of the Acts. In 1914 payment by Treasury notes was made equivalent to current coin.

Section 9 inflicts penalties on employers entering into any contract or making any payment declared illegal by the Act. Sections 10 to 18 Provide the machinery for dealing with offences.

Section 25 is a definition section. It is to be observed that it is stated in very wide terms, but this would be of no particular significance if the limitation contended for were clearly established from other parts of the Act.

Section 27 extended the Act to Great Britain. Section 18 of the 1887 Act extended it to Ireland, an extension which no doubt is now limited to Northern Ireland. The phraseology of this section was dictated by the history of the legislation which culminated in the consolidating Act of 1831.

The 1887 Act, in addition to the matters already mentioned, deals further with offences. Section 13 (2) lays upon inspectors of mines and of factories the duty of enforcing the Acts in their particular jurisdictions. Section 13 (4) provides for prosecution of offences by Procurators-fiscal of the Sheriff Court and inspectors of factories and of mines.

Reverting now to the arguments for the reclaimers, it may well be that in 1831 a situation like the present was not within the contemplation of Parliament. That is not a consideration by which one is entitled to be swayed. As Lord Simonds said in construing a statute in Lord Advocate v. Mirrielees' Trustees (at p. 25):

"…if the words fit the case, it is immaterial that the section has an unforeseen application."

In my view the words of the Truck Acts do fit the present case. The reclaimers' argument is that, as payment in current coin is out of the question in a contract of this sort and as the work is to be done abroad, the Acts do not apply. It was put to us as a case where performance of the contract is to take place abroad. This, in my view, is the fallacy of the argument. The fact remains that performance did not entirely take place abroad. The very thing in controversy took place in this country. The money in question, in virtue of a contract entered into in this country, was paid into a bank in this country and it has never left this country. The contract covered the respondent from the time he left Ayr till he returned. When he returned to this country on satisfactory completion of the contract, he was to receive a further payment in this country. I see no reason why the arrangement which was made by which he ultimately received rupees in Kuwait should be regarded as itself preventing the Acts from applying. Whatever the position be as regards those sums of money which were sent out to Kuwait and credited to the pursuer there and which he ultimately drew from the bank in rupees, the fact remains that the sum in issue never left this country and was never received by the pursuer in current coin of the realm or in any other form.

The difficulty, to my mind, does not lie there but in the fact that, so far as the respondent is concerned, the work which he was employed to do was to be done in Kuwait. But to make that consideration the crux of the problem is an undue simplification. This was a mutual contract with reciprocal obligations. It cannot be looked at entirely from the point of view of one of the contractors. The reclaimers have in their own interests stipulated that part of their performance is to be in this country. Having done so, I do not see that they are entitled to say that the contract as a whole is exempt from the operation of the law of this country.

Further, I do not see that, in the case of a contract entered into in this country and to be performed in part in this country, there is any difficulty in operating the penal sections of the statutes. So far as I can see, the infraction of the Act—if it be an infraction—with which we are concerned in this case is one which was committed in this country by the reclaimers' stipulating for the holding of a sum of money in this country as a security for their own possible claims against the respondent.

It was argued that, even if the Acts applied, their effect was not to make the whole contract void but merely to strike at the offending provision for the deduction of £10 a month. This argument cannot be sustained. The words of the 1831 Act are quite unqualified. The argument based on the terms of the definition section involves a strained and unnatural interpretation.

It was also argued that, even if the Acts applied originally, the pursuer ceased to have their protection by ceasing to be an artificer on promotion to supervisory duties. In my view, the facts do not support the contention that he ceased to be an artificer.

It follows therefore that the pursuer is entitled to the decree which the Lord Ordinary has given him. The plain policy of the Acts is to destroy the contract but to confer on the artificer the right to recover any remuneration illegally deducted.

It follows further that the defenders cannot appeal to the contract in any way and cannot assert that the pursuer is liable to them in damages for breach of it. Accordingly the items, of damages set out in statement 6 of the counter-claim must be rejected.

There remain, however, two items in the counter-claim which, while they arise out of the relationship in which the parties found themselves, do not spring directly from the contract. As to the first of these, certain debts were incurred by the pursuer in Kuwait to the Kuwait Oil Company which the defenders discharged on his behalf. These amounted to £12, 18s. 3d. It was not disputed that the defenders were entitled to this item. The defenders also paid the pursuer's passage home. In my view they are entitled to be reimbursed. The evidence shows that the pursuer had the opportunity to remain on in the defenders' employment. He preferred not to do so. The Lord Ordinary would have given this item to the defenders if he had not regarded it as part of the claim for damages for breach of contract. I do not think that this is the proper way to regard it. In the circumstances which arose and quite apart from any question of contract or breach of contract the defenders without intending donation provided certain services for the pursuer. For these it seems only right that he should pay.

Accordingly, in my view, the defenders should have decree under their counter-claim for £12, 18s. 3d. plus £99, 7s. 5d.

LORD MACKAY .—[After a summary of the facts]—

I think it highly expedient here and now to announce in anticipation the results of my attentive listening and logic:—

(1) As to what was often called the main issue, that of the Truck Acts, I hold that to a class of contract for salaried work to be performed entirely in a foreign land, possessing a set of tribunals and a currency of its own, and when the contract or understanding clearly proved is for monthly payments in the currency of that land, the Truck Acts would not, indeed could not, apply.

(2) That being determined (and indeed it is true even without it), then the contract as a whole was not null and void or invalidated, but subsisted to govern duties and relations as at 9th January 1950, the time when the breach occurred.

(3) There was undoubted, and I even think admitted, breach of that subsisting contract, as at the above date, from which damages flowed, or must flow.

(4) The two claims for reimbursement remain good, inasmuch as I understand the smaller, £12, 18s. 3d., is not disputed, and the, larger, £99 odds, is ascribable to no other known category of legal consequence.

As to how to attack these many results in very logical order and without unduly involving paper and time, I have had great difficulty.

It will be logical and save much space to deal with breach of contract first. [His Lordship referred to the evidence; reached the conclusion that the pursuer was in breach of his contract; expressed the view that, unless the contract was held to be totally invalid, the defenders were entitled to succeed on all four heads of their counterclaim; and proceeded]—

Well now, we come nearer to a proper line of approach to the alleged "main question", which it is difficult to regard as "main." It might well be decided otherwise than I propose, and yet only become a smaller counter-claim. It now seems clear that I equally with the Lord Ordinary, would award £300 to the defenders on various heads, unless (nota bene) the contract was entirely and ultimately void, i.e., non-existent as an enforceable contract. That alone and nothing less would affect the liability for two out of the four heads of counterclaim so called. "Reimbursement" of expenditure made on one's behalf is not at all affected by the validity or continuance of the contract.

Well, what of the Truck Acts, as sought to be read as varying or nullifying that written contract? I have pointed out above that there are two separate questions emerging (i) as to the permissibility, under applicable law, of payment in "other than" currency of the realm, i.e., of the British Islands other than Eire, and (ii) as to the nullification of the whole contract—top to bottom—because of either section 2 or section 3 of the original Act of 1831.

Here I think it right and imperative to make two things clear. (a) Section 1 of 1831, by clear admission and by the agreement of all counsel, does not apply at all. I am spared the necessity, then, of looking at that very special mode of nullification. Several great difficulties would arise if it were in application. The nullity would undoubtedly be total (however absurd the logical consequences sometimes come to appear), notwithstanding the plain mutual understanding, the usefulness and propriety of the particular forbidden deduction, and the fact that irretrievable things had transpired on the mutual understanding as to validity. (b)The sole specific attack made by the pursuer on record is not under section 1 or under section 2, but solely under section 3 (pleas 1 and 2). Now the Lord Ordinary quite accurately and for good reason refrains from deciding or holding that section 3 would apply to the contract. It cannot indeed be made to apply on any intelligible ground. What alone he held to invalidate the contract as a whole was a forced reading of section 2; and there alone he acts under an interpretation of the words (one specialty only out of three) "directly or indirectly respecting…the manner in which…the whole or any part of the wages…shall be laid out or expended."

I do not really require, in view of the more general result at which, without hesitation, I arrive, to canvass this alleged nullity on the merits of its construction. But yet I do desire to express myself that, even if the congeries of provisions of the Truck Acts could at all be applied to such an extra-territorial contract as this, then this particular nullity (which does not invalidate any clause or provision or device, &c., in itself, but which does leave parties without any contract to measure duties, pay or rights) is one not rightly applicable to the facts here. It seems to me reasonably certain that this special little group of three is clearly different both from (section 1) "deductions" made, i.e., diminutions of amount, and from (section 3) "actual payment" made in a wrong currency, or by goods. What is intended to be struck at by section 2 is governed by the words "laid out or expended" and means a clause or by-the-side agreement that the receiver, after he is paid his wage, albeit in legal currency, shall "expend it" or "lay it out" in some particular manner approved only the employer. If such attack were possible, it is my firm view that in Scotland it would imperatively require express pleading, so as to bring out the facts tabled, and attacked as having such tremendous effects on an extraterritorial or a trans-territorial bargain, bringing the specific facts of thiscase into line with these few but important words so isolated from section 2.

For these reasons I am clear that no good attack has ever been launched on the extra-territorial contract which was here with open eyes agreed to by both parties; nor, apart from the defect of pleadings, had section 2 or any part thereof been used to invalidate the whole basis of relationship, until under this one head it was discovered and used by the Lord Ordinary, and by him alone.

But the ultimate breakdown of the whole attack by way of the Truck Acts is, for me, to be with propriety placed on far wider grounds.

I am, as announced in initio, of clear opinion that the Truck Acts, 1831 to 1940, all to be read as one Act, never had, and never were intended to have, any application of whatever degree of severity to a class of "foreign" contracts such as this. I have used the word "extraterritorial" merely as a convenient summary. But it is perfectly clear that this is no case whatever of application of Private International Law doctrines. There is no conflict whatever of two sets of law, except in so far as it must be assumed (as I do assume) that in France and Holland, or in any independent state like Kuwait, freedom of contract exists, and should be posited as existent, except where express fraud is dared to be alleged. So again, it is hardly right to place the contrast, as Mr M'Donald and Mr Walker often tried to do, between (a) the lex loci contractus and (b)the lex loci actus. That on inspection is plainly wrong. There are no two systems of law which so compete.

Here is, my logic. First, these Acts—one in force for about 120 years—have never been in all that time applied to any contract inviting execution, both in "labour to be done" and in "pay to be returned" as its remuneration, in a foreign land. One may add also that it was here plainly intended and hoped that workmen transported would agree to a prolongation of time, and might quite well elect to settle abroad, where apparently good money awaited. There might therefore be relations between the company abroad and the men abroad for a further indefinite period. No such application, whether to colonies or dependencies or to any country abroad, has yet been made.

Secondly, I think it should not now be made. Before passing from the fact, take note that this broad generalisation includes not only all Ireland (excluded expressly by the Acts to this day) but also France, Sweden, U.S.A., China and Japan, and also all the existing dependencies and mandated territories and colonies which extend the Empire within the government of His Majesty, but not necessarily, and very often not, within the powers of the Legislature in London. Thus, to how many would the amending Acts of 1896 and 1940 apply? In particular, it seems certain that, in relation to the Dominion of Canada and the Crown dependency of India (while it was such), there must have been thousands of contracts where British contractors agreed to and did send out hundreds of men of skill, or skilled "artisans," to take over and execute emergency works in all these vast spaces. These world contractors, without, I imagine, any doubt, engaged to remunerate them in the currency (rupees, dollars) of these places (contrary, it would be made to seem, to section 3) and to provide by deductions for insurance and for many other providential and well adjusted arrangements, or even, if one needs at all to go so far, for parts of wages to be "laid out," and also for suitable persons for whom to effect such a "lay out."

Such beneficial arrangements have not yet been interfered with and, I hope, never will hereafter be made the subject of challenge or featured as a "mischief" (Mr Walker's constant word of resort). I for my part shrink from diverting the word "mischief" from the frauds on innocent wage-earners which figure alone in the preambles. To me the term "mischief" could not be cast at such arrangements.

Frankly, this fact (of there appearing no, even the slightest, approach to such straining of a remedial Act for well over a century) seems to be according to the plain legal construction of all the Acts, read, as now they must be, as a single Act. Their scope, the actual territorial scope, has been varied from time to time. The words "shall extend to that part of Great Britain and Ireland called Great Britain" have been in this Court overhauled, and have been given such meanings as I think plain distortions. The words, whether read without reference to earlier repealed statutes or whether not, are twisted, if read as proposed. But I may refer to only one of the half-cited repealed Acts (see Schedule to 1887), to wit, that of 1817, which speaks expressly of "extending the provisions of the said Acts (i.e., still earlier ones) to Scotland and Ireland." The word "extend," so employed, can have only one significance, and means a gradual enlargement to additional jurisdictions or laws or territories of an originally very limited scope. It must even be noted that the enlargement is as to a larger territory within the Crown's jurisdiction and subject entirely to the powers of the United Kingdom Legislature. Ireland seems indeed thereafter to have been taken out again, probably because in 1831 her representatives in the British Parliament were instructed to oppose the ratio of "Truck" Act legislation being applicable there. At any rate, I feel secure in law in saying that a job to be both paid and fulfilled in Ireland between the dates 1831 and 1887 would not have been included, even if the locus contractus, strictly speaking, happened to be England or Scotland or perhaps England and Scotland both, or again perhaps Scotland and Ireland, the two parties signing apart.

Thirdly, the compulsive character of this reasoning seems to me enormously enhanced if and when one travels on to foreign lands, to which groups of men are transported to be there employed and there to be governed, presumably, by overseers or the like, or "managers." Take any purely independent state like France or Holland—and among these take the independent sheikdom of Kuwait. The result is to put the idea almost to scorn.

One has only, and I take this as a last legal point, to consider what would happen if in such foreign lands the government or legislature saw fit to enact for themselves similar statutory restrictions on freedom of contract, and to apply prohibition on their own workpeople, or workpeople of other countries in their country, doing work in, say, France. For, on this (I now venture to say) almost ridiculous mode of interpreting a wider "extension," both countries would then by the conjunct operation of their two laws render any contract for payment in either of their currencies, or in any other country's currency, illegal. In short, in my judgment, the attempt to give this worldwide scope to matters which are germane enough to matters solely under Great Britain's Legislature, is to impose sharp restrictions, of three differing sorts, upon freedom of contract, enacting prohibition of all payment unless to be in British coin, or again, unless in French coin, all as very closely defined, and to fence all with powerful sanctions which can only (on the surface) be expressed by (a)certified execution in some specially provided mode of sanction and (b) increasing monetary penalties with each step, steps which were called for by the contract itself; and these penalties were of a nature enforceable only, as in England or Scotland, by special recovery officers, in Scotland it seems to be necessarily the Procurator-fiscal. All other mode of recourse, so far as sanction is concerned, is barred, and to any enforcing provisions therefore there is no apt jurisdiction in the other country. I may add here that I draw similar strong conclusions from the very strong, but unargued, provisions as to "deductions" permissible and how to be adjudicated, under section 2 of the Act of 1896.

I have said enough; perhaps even more than enough, but that the issues here are to be multiplied by twenty, and that recourse to a higher tribunal is definitely threatened.

It only remains, but I feel it necessary, to refer to a few erroneous reasonings, as I think them to be.

(1) A suggestion was thrown out that by "coin of the realm" in section 3 of 1831 is meant no more than to pay "in coin." The Act at that date made it imperative in "every" contract, i.e., every contract governed by the 1831 Act, to make payment in gold or similar coin "of the realm," i.e., Britain, and I reject the view that to substitute the word "cash" will do. The fallacy may be due to Mr Redgrave's having, very misleadingly indeed, printed the mere sidenotes appended to the statute and especially those of sections 1, 2 and 3, all in leaded type, as if they formed a part, and an important part, of the section itself. I am of opinion that the Act cannot be understood at all unless it be clear that the strict obligation upon all who fall within its terms was one for "actual" payment of wages in gold or in notes, as made later on to be available within the terms "of the realm"—at any rate in legal tender of Great Britain.

(2) A highly ingenious argument (but one difficult to grasp) was founded by Mr Walker on the terms of section 25 (a definition section) of the 1831 Act. It is enough to point out that a mere constructive argument of this sort cannot bring into the scope of the Truck Acts a bargain which I have held to be read as without it on general lines. But in any event the argument fails. The part selected is a definition of "contract," intended obviously to make the attack extensive enough to cover "undertakings," "devices" and the like words, whereby an employer might endeavour to impose an obligation on an unsuspecting and innocent employee. Hence the words "shall be deemed a contract" merely show by the use of such a turn of phrase as is implied in the phrase "a device" that indirection is not to succeed. I find no persuasive force in this presentation.

(3) Lastly, I must apologise to the learned Lord Ordinary for reaching his special reasonings last. I have studied over and over again his reasons beginning with the words:—

"The first question is whether…"

To start with, he points to two branches of the question. As to place of performance he is found in total agreement with my view. Also, as to the "actual payments," with regard to their locus he goes far on the same line. Like myself, he holds the understood method of wage payment to be that the cash which passed for wages was to be that paid into Duncan's account monthly in Kuwait, and was therefore a sum recoverable by him in rupees only. It is at this point, however, that he suddenly begins to part company. While saying, properly enough, "It is important to have regard to the territorial limits," he finds it (a) possible, and (b) apparently fatal, to say that the unitary contract can be split up into parts. "But," he says, "only one-third was paid in Kuwait," and he then seems to hold that two-thirds of the pursuer's salary, at least as long as he acted as artificer, was

subject to "disposal" in Great Britain. He thereafter passes on to say that this reading "does not render the Acts wholly inapplicable." I do not begin to understand that word "wholly." Contrary to Mr Guest himself, and to any submission of reasons to the contrary, I regard it impossible so to hold the code of the Truck Acts to be partly applicable to one part of a contract, and partly (within the same contract) inapplicable. It is still worse if the learned Judge stepson (as he seems to do) to apply a section of the first Act, not pled by the attacker, in such a way as to invalidate the whole. Thus is it that he reaches at the end of the day the conclusion that all the £300 (except the small sum of £12, 18s. 3d.) must be denied to the crave of the counter-claim. I venture to differ, and I understand your Lordships all differ as regards the considerable sum of £99.

As must have appeared, albeit for very different reasons from those adopted at this last step by the Lord Ordinary, I think that both section 2 alone, and equally the whole scope and power of the code, furnish no termini habiles to reduce or nullify this very fair and very open contract, in which there is no element of fraud or deceit. It is perhaps over-stressing the obvious to point out that the Lord Ordinary's application of invalidity to "two thirds" of the contract involves a further serious mistake. As regards the £20 to be paid monthly to the wife (of any man, presumably, who should leave a wife at home), this excellent provision cannot be struck at (a)because it is authorised directly by the late decisions or Acts, and indeed is within many decisions; and (b) because it is a payment to the contractor, and is made in sterling. Out of a "rate" set by the contract of payments at £53 a month, £20 then is legitimately paid to his wife and the equivalent of £23 is legitimately paid in rupees. So at the very utmost stretch upon this basis only as against £10, or under one-fifthof the total value (instead of two-thirds), could any plausible attack be directed. Nor, despite the unhappy words selected in the contract (the contractors plainly having had no outlook upon the Truck code at all), can I really regard this last one-fifth as "deducted." It is receivable by him in full, like the bonus, if he carries on without breach, and at the worst for him it is only as a security against the assumed establishment by the appropriate Court of serious breach or misconduct that it could possibly pass from him in the long run. I do not desire to be understood, however, as wholly or largely dependent on these reasonings, my real grounds of decision pointing to the broader lines previously set out.

There seems to have sprung up a different, and an unargued, mode of solution, which I may venture to express as being that, while the whole contract, as a whole, cannot be logically made amenable to the prohibitive words of the Truck Acts (e.g., as determining a remedy in almost double payment), yet, if there be pointed to any provision which, in the case of a contract truly within these provisions, would be obnoxious to any section or few words in such section, the Acts would strike in a partial manner at this provision, albeit good under the general law of contract, and by invalidating it, and it only, so cut down the whole contract. I cannot assent to the view implicit in that, that a contract not falling within the Acts at all can be brought in merely because a provision might (I think, here, even dubiously) have been held a bad one in another contract altogether. The result as now proposed to me is that the payments made abroad in rupees are properly valid, and cannot be recovered under section 5 or otherwise, but that so paid, and so immune from recovery, the contract under which the labour was done and the rupees paid is yet nullified. I cannot concur. And I venture to think that the result, so far from resulting from the opinions of Lord Wright and Lord Atkin in Pratt, is in direct conflict with those expressions.

Upon the above reasons (all of which could be expanded, if space permitted) I am of opinion that the grounds of the pursuer's conclusions fail (seeing that his proved breach will not allow of the possible ultimate disposal to his benefit) and that, as there are no habile grounds for reducing the contract as a whole, the whole sum of £300 must be awarded to the defenders upon their counter-claim.

LORD JAMIESON .—By a contract entered into between the parties the pursuer was engaged to proceed to Kuwait and work as an electrical welder on constructional work at the defenders' establishment there. He was to be paid monthly at the rate of £540 sterling per annum, to receive a bonus amounting to £40 per annum on his return to the United Kingdom, and, while resident in Kuwait, a local allowance, then being paid to the defenders' employees at the rate of £8 per month. It was agreed that £10 per month should be deducted from his salary and deposited in a savings bank in joint names of the parties, and remain deposited for the purpose, if need be, of being applied by the defenders in satisfaction pro tanto of all or any of the pursuer's obligations under the contract, and on his duly performing same the sums deposited were, on completion of the contract, to be paid over to him. The contract was silent as to how the balance of his remuneration was to be paid, but it was understood between the parties that it was to be paid to him in Kuwait in rupees, and, apart from a monthly sum of £20 which he subsequently allotted to his wife, it was so received by him.

The first question that arises is whether the Truck Act, 1831,and amending Acts apply to such a contract. The defenders maintain that the Acts do not apply to the contract, the whole performance of which on the part of the pursuer was to take place abroad and his wages under which, apart from the said deduction and allotment, were to be paid in rupees. Their contention is that the Acts only apply when the whole contract is to be performed by both parties in this country.

The 1831 Act applied only to Great Britain, but was subsequently extended by the amending Act of 1887 to Ireland. Section 27 reads "The provisions of this Act shall extend over the whole of that part of the United Kingdom of Great Britain and Ireland called Great Britain." The reason for the section being so phrased is, I think, to be found in the fact that it was a consolidating Act, and that on the same day as it was passed an Act "to repeal several Acts …prohibiting the payment of wages in goods, or otherwise than in the current coin of the realm" received the royal assent. These Acts are set forth in its preamble and they related to various trades, which, it is common knowledge, were located, or for the most part located, in particular parts of Great Britain, and in at least two cases the Acts expressly bore to have local application. I think it probable that it was to make it clear beyond doubt that the 1831 Act was to have no territorial limitation within Great Britain that it was said to extend to the whole of Great Britain. In my view, therefore, no help can be obtained from the terms of section 27. The Act was, when passed, a statute which applied only to Great Britain, but it now applies to the United Kingdom.

No doubt the intention of Parliament in 1831 was to legislate for trades carried on in Great Britain, and it had in contemplation contracts for the hiring of labour to be performed there, the payment for which was to be made there in the current coin of the realm. That being so, it was argued for the defenders that the words of section 1 "contracts…for the hiring of any artificer in any of the trades after enumerated, or for the performance by any artificer of any labour in any of said trades" must be read as confined to contracts for labour to be performed within the territorial limit of the statute. While, however, Parliament in 1831 may not have had in contemplation contracts entered into in this country for services to be performed abroad, an occurrence which at that time, if not unknown, must have been rare, nevertheless, if the wording of the Act is wide enough to cover what has since become common, effect must be given to it.

The pursuer's construction looks to the locus contractus, and he argued that any contract entered into in this country for the hiring of workmen as defined by the Employers and Workmen Act, 1875,must conform to the provisions of the Act irrespective of where the services are to be performed or where payment is to be made. Section 1 in terms applies to "all contracts," and these words must be read without limitation.

I am unable to agree with either construction in its entirety. The first two sections deal with the legality or illegality of contracts, the third section deals with the payment of wages, and a contravention of any of these is declared to be a penal offence. But such an offence can only form the subject of a prosecution if committed within the jurisdiction of the Courts of this country. The Courts of this country would have no jurisdiction to prevent the payment to a workman abroad of his wages in the currency of the country in which he was working, and to construe the Act as if such were illegal would lead to the fantastic result that the workman, having accepted payment in the foreign currency, would by virtue of section 4 be entitled to sue his employers for payment again in British currency. It would be equally absurd to suggest that, apart from the impossibility created at present by the Exchange Control Act, an employer would require to send out Bank of England or Scottish bank notes to pay the workman, which he himself would require to convert into foreign currency.

That leads me to the view that the relevant consideration is neither the place where the contract is entered into nor the place where the workman is to perform his work, but the place where the employer is to perform his part of the contract by paying the wages due. The purpose of the Act, as the preamble bears, was to prohibit the payment of wages otherwise than in the current coin of the realm, the only authorised exception being notes of the Bank of England or of a licensed banker, or, of consent, drafts on such a banker, if carrying on business within the limited distance of fifteen miles from where payment is to be made. It is the payment of wages in any manner not authorised that the Act is designed to prevent, and the fact that the only legal method of payment is in British currency or in the notes of or a draft on a British bank points conclusively to payments in the United Kingdom and there alone being struck at. It follows, in my view, that any payment of wages made in the United Kingdom, or any contract to pay wages there, in a manner contrary to that authorised, falls within the scope of the Act, and that whether the whole or only part of the wages to which the workman is entitled is concerned.

In the present case only part of the pursuer's remuneration was, payable in Kuwait. The greater part was payable in Scotland, and to this, in my view, the Act applies. No question arises regarding the sum allotted to his wife, which was equivalent to a payment to him himself. The agreement to deduct £10 from his wages was, I think, a provision regarding how part of the wages due to him was to be laid out in the sense of section 2, and it was conceded that, if the Act applied, that was so.

Mr Guest argued that, esto the agreement to deduct £10 from the pursuer's wages was struck at by the Act, it was that provision only that was void, and quoad ultra the contract stood. He relied on the wide definition of contract in section 25. No doubt any agreement, understanding, device or arrangement on the subject of wages may be regarded as a "contract" for the purposes of the Act, but the terms of section 2 leave the matter without doubt. It provides that "if in any contract any provision is made…, such contract shall be declared illegal, null and void." It is the contract, not the provision within it, which is so declared void. To give effect to Mr Guest's contention would involve giving a different meaning to the word "contract" at the beginning and end of the section. In my opinion, therefore, the whole contract was void. Such was the decision with regard to section 1 in Kenyon v. Darwen Cotton Manufacturing Co .

A subsidiary argument was presented that the operation of the Act only continued while the pursuer was employed as an electric welder and that it ceased to operate when he was employed on supervisory duties, as he was then no longer a workman as defined in the Employers and Workmen Act, 1875. On the evidence it appears that his appointment as a supervisor was only probationary and that he might have been directed to return to welding at any time. Apart from that, however, I am unable to accept the argument. The contract was, in my opinion, void from the beginning, and was not revived by any such change of circumstances.

Turning to the defenders' counter-claim, I agree with the Lord Ordinary that, had the contract been valid, the pursuer would fall to have been held in breach, and not so the defenders. But, the contract being void, the defenders cannot recover in so far as their claim is for damages based on the pursuer's alleged breach. They do not, however, base their claim to recover from the pursuer the cost of the pursuer's passage back to this country on that ground. The pursuer and other workmen were returned at their own desire. The defenders were anxious that some of the best of the men who had downed tools, and in particular six men, of whom the pursuer was one, should remain and resume work. There is a conflict of evidence as to whether the pursuer and the other men were told they would have to pay their own fares, and it is not established that they were told. But that is immaterial. The defenders would have been under obligation to send the pursuer home on the completion of the contract. They were under no obligation to do so when they did. It was because of his request and contrary to their own wishes that they arranged with the Kuwait Oil Company to fly him home and paid them his fare. In these circumstances I think they are entitled to be reimbursed the sum of £99, 7s. 5d. expended on his behalf in addition to the £12. 18s. 3d. paid out for him, as regards which there is no dispute.

LORD PATRICK .—The declared purpose of the Truck Act of 1831 was "to prohibit the payment, in certain trades, of wages in goods, or otherwise than in the current coin of the realm." To achieve its purpose the Legislature first provided that in the stipulated contracts the wages must be made payable in the current coin of this realm only, upon pain of nullity of the contract. It next prohibited the insertion in such contracts of any provision as to the place where, or the manner in which, or the persons with whom the wages should be laid out or expended, again upon pain of nullity of the contract. It remained to deal with the actual payment of the wages so as to ensure that the workman would obtain payment of these in the form prescribed by the statute, for, though the contract might be unexceptionable in its terms, the practice of paying the wages might still be contrary to the intention of the statute. The Act therefore provided that the entire amount of the wages must be actually paid in the current coin of this realm, any other payment being declared illegal, null and void, and provision was made for recovery by the artificer of wages paid to him otherwise than in the current coin of this realm. The Act is declared to extend over the whole of Great Britain, which means that the above statutory provisions apply to acts done in Great Britain but not to acts done elsewhere. This construction, which is the natural one, becomes the necessary one when it is seen that the ninth section makes it a criminal offence for any employer to enter into a contract or make any payment which the statute has prohibited, for it is a matter of principle that the Legislature shall not be presumed to have declared that which is done outwith the realm to be a criminal offence. The proper construction of the Act is that in contracts made in Great Britain it is illegal to insert terms which the statute has prohibited, and in the case of wages paid in Great Britain it is illegal to pay them otherwise than in the form and manner which the Act prescribes, and in each case the appropriate statutory consequences follow.

In the present case a contract was made in this country whereby a workman was hired to do work in a foreign country, his wages to be disbursed to him partly by payments in the foreign country, partly by payments to his nominee in this country, and partly by placing sums in a bank in this country in the joint names of employer and employee for the purpose, if need be, of being applied by the employer in satisfaction pro tanto of the employee's obligations under the contract. As I construe the Act, it does not apply to the part of the wages paid to the employee abroad. Nor does it apply to the part of the wages paid to his nominee—Hewlett v. Allen —but it does apply to the contractual provision whereby part of the wages was placed in a joint account so that in certain events the employer should have a nexus upon that part for satisfaction of the employee's debts to him. That, in my opinion, is plainly a provision respecting the manner in which and the persons with whom part of the wages shall be laid out or expended, and is contrary to the second section of the Act. The whole contract is therefore illegal, null and void, for I cannot construe the word "contract" as being used in the second section in two different senses, the one meaning the whole contract and the other merely the offending contractual provision. I reserve my opinion on the question whether the payments into the joint account so that in certain events the employer might use them to discharge the employee's debts to him were contrary to the third section of the Act. Certainly, if the employer did in fact use these payments to discharge a debt due by the employee to him, such an application would be contrary to the third section—Penman v. Fife Coal Co .

It is said that it is highly unlikely that Parliament in 1831 had in view contracts under which British artificers were hired to work in foreign countries, for such contracts must then have been few indeed, but this consideration can have little weight in arriving at the proper construction of the Truck Act of that year. The intention of the Legislature, as expressed in the Act itself, must be ascertained. When this is done, it does not matter that the statute has now an application which Parliament may be thought not to have had in view when the Act was passed—Lord Advocate v. Mirrielees' Trustees . If the words of the statute, so construed, are found to fit the present case, then the statute must apply to it.

It is said that to apply the statute to a case such as this, in which part of the wages must be paid to the workman abroad for his subsistence and pocket money, is impracticable and would result in injustice. It would not be practicable, it is said, to pay the workman that part of his wages abroad in current coin of this realm, or in the statutory equivalents, and, if so paid, the payment in that form would serve no purpose which the Truck Acts had in view, for the workman would have to turn it into foreign currency before he could use it. The answer is that these difficulties do not arise, since the Truck Acts do not apply to payments of wages made abroad.

It is said that the wording of section 3 of the Act of 1831shows that the Act does not apply to contracts under which part of the wages must be paid abroad because of practical considerations. That section provides that "the entire amount of the wagesearned by or payable to any artificer…shall be actually paid to such artificer in the current coin of this realm.…" How, it is said, can one do that when part of the wages must be paid to the workman abroad in a form which he can use for his subsistence there? Again I think the answer is that the third section, notwithstanding the generality of the words employed, is restricted in its application by section 27 to acts done in Great Britain. The statute is concerned only with the illegality and criminality of acts done in this country. Payment of wages made abroad may take place in any agreed form or currency.

A similar answer meets the contention that section 13 (2) of the Truck Amendment Act, 1887, which falls to be read as one with the Act of 1831, cannot be applied to offences against the Act which are committed abroad. The answer is that there are no such offences.

Accordingly the contract now in question was from the beginning illegal, null and void, and the defenders cannot recover damages for the breach of it. I agree with the opinions already expressed that they are entitled to be reimbursed the sums of £12, 18s. 3d. and £99, 7s. 5d. which they disbursed on the pursuer's behalf.