Namlooze Venootschap de Faam v The Dorset Manufacturing Company Ltd

• Jurisdiction: Ireland
• Judgment Date: 08 May 1949
• Date: 08 May 1949
• Court: High Court

Namlooze Venootschap de Faam v. The Dorset Manufacturing Company, Limited

NAMLOOZE VENOOTSCHAP DE FAAM

Plaintiffs

and

THE DORSET MANUFACTURING COMPANY, LIMITED

Defendants.

Emergency legislation - Control of foreign currency - Contract for purchase of goods from outside sterling area - Payment prohibited except with permission of Minister for Finance - Permission obtained - Goods ordered in excess of such permission - Permission expiring before being fully utilised - Renewal sought, but not granted - Permission to pay for excess sought, but not granted - Whether contract void or illegal - Whether judgment for plaintiff would be against public policy - Supplies and Services (Temporary Provisions) Act, 1946 (No. 22 of 1946), s. 16, sub-s. 3 - Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Act, 1947 (No. 39 of 1947), s. 2 - Emergency Powers (Finance) (No. 7) Order, 1941 (S. R. & Or., No. 21 of 1941) Art. 3 (1) (g) - Exchange Control Order,1947 (S. R. & Or., No. 394 of 1947) - Exchange Control Order, 1947 (Supplemental Provisions) (No. 1) Order, 1947 (S. R. & Or., No. 395of 1947).

N., a Dutch firm, in pursuance of certain agreements, supplied goods to D., a firm in Dublin. At the time of the sgreements and the supply of the goods the provisions of Art. 3 of the Emergency Powers (Finance) (No. 7) Order, 1941, were in force. That Article prohibited (inter alia) the export of foreign exchange and the making of any payment to any person outside the State (subject to certain exemptions which did not apply) except with the permission of the Minister for Finance. D. got permission to purchase goods to the value of £5,419 14s., in Dutch guilders, which permission was subject to a time limit. The value of the goods ordered and received from N. was £7,161 11s. 5d. Owing to a dispute as to the quality of portion of the goods D. only paid immediately the equivalent of £4,038 11s. 5d. in Dutch guilders, the balance of £1,381 2s. 7d. being held over until the resolution of the dispute. This was finally resolved in N.'s favour, but by then the time limit on the permission had expired and although a renewal was stated to have been sought it had not been granted. Permission was also stated to have been applied for to pay the necessary amount for the excess of goods ordered over the original permission, but this also had not been granted.

N. issued a summary summons claiming £3,123, the price of goods sold and delivered. Subsequent to the commencement of the action, the Exchange Control Order, 1947 and the Exchange Control Order, 1947 (Supplemental Provisions) (No. 1) Order, 1947, came into force whereby the Emergency Powers (Finance) (No. 7) Order, 1941 was revoked. Art. 3 of the Exchange Control Order, 1947 (inter alia) prohibited any payment to or by the order of any person resident outside the scheduled territories or the placing of any sum to the credit of any person resident within the scheduled territories by the order or on behalf of any person resident outside the scheduled territories.

Held: 1. The Emergency Powers (Finance) (No. 7) Order, 1941, did not make the contract either void or illegal, because (a) the prohibition contained in Art. 3 of the Order relates to the contemplated possible sequel to the contract rather than its essential nature and (b) the qualification in that article enabling a prohibited act to be done with the permission of the Minister for Finance places the contract in the category of being a legal contract with an implied representation that, so far as the permission of the Minister might be necessary, such permission existed or would be applied for.

J. W. Taylor & Co. v. Landauer & Co., [1940] 4 All E. R. 335 applied.

2. Any order of the Court putting the plaintiffs in a position to secure payments of the amounts in dispute would compel the defendants to do an act prohibited by law and would thus be improper and against public policy.

3. An order declaring and settling the rights' of the plaintiffs, but with a stay to prevent payment being made while it was prohibited by law should not be made as it would be against public policy.

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