Lord Denning was perhaps the judge who can be labelled as the greatest law maker of the 1900s and still, he was one of the most controversial judges ever. His career spanned 37 years. During his term, he shaped the common law according to his own highly radical but humane vision of society. Lord Denning was one of the most praised judges of his time. Denning served in Court of Appeal for some years then he got promoted to House of Lords, he took the whole world aback when he voluntarily came back to Court of Appeal in 1962 as Master of Rolls. His reason for such historic voluntary demotion was that the annual output of Appeal Court is about 800 cases while that of House of Lord is about 50-60 cases. And he opted for where he would be more essentially pre- occupied with dispensation.
The judicial climate created by Lord Denning was filled inexorably with vapour of justice and equity. Denning looks at law as an instrument of social justice. He was many times, dissenting voice on the bench. He promulgated judgements on many cases rather than relying on the previous authorities and precedents and took the just and equitable approach and many a times gave a dissenting opinion on a bench of unanimous opinions. He was mostly criticized for his subjectivity. His decisions were based more on his religious and moral beliefs than on the law and that is why he was known as a protector of little man’s rights and fighter for the underdog against big business.
The researcher through this research paper seeks to answer the question that, “Is Lord
Denning’s favour to equity harmful to Positivism?.” To answer this question, the author will analyse four of the most controversial/famous judgments by Lord Denning and will see if the stance taken by Lord Denning really did any damage to Law? There will always be a fight between positivism and equity, but what matters is to conclude that whether Lord Denning’s support to equity is really harmful to the rigidity and the notion of precedents as settled authorities of law.
Consideration means something which is of some value in the eye of law. According to the Indian Contracts Act, 1872 –When at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing something, such act or abstinence is called a consideration for the promise.
Lord Denning has contributed in two main areas of consideration:
Any detailed review of Lord Denning’s contribution to the law of contract must inevitably start with the High Trees case, the foundation of the modem law of promissory estoppel. In Central London Property Trust Ltd v High Trees House Ltd [i] The defendants, High Trees, leased a block of flat from the plaintiffs, Central London Property Trust. The property didn’t get enough occupancy rates due to the outbreak of World War II in 1940, so the parties agreed to reduce the rent by half i.e. from $2500 to $1250. However, it was not expressly agreed for how long this would last. The defendants continued to pay the rent at the new rate. In 1945, when the war ended the flats got full occupancy. The plaintiffs sued High Trees for the full rent from 1945 onwards. The issue was that the defendants argued that the agreement to pay the rent at a reduced rate applied to the whole term of the lease. They argued that the plaintiffs were estopped from claiming that the rent should be higher. If we go by the law here, there was an agreement between both the parties to half the rent amount and there was no time limit defined, so it can be deduced that it was meant to be for the whole term. This was a clear-cut case in defendant’s favour (according to positivist’s approach). But what was eventually decided in the case was:
Based on previous judgments Denning J held that the full rent was payable from the time that the flats became fully occupied in mid-1945. Denning stated that if the case had been one of estoppel, it might be said that in any event the estoppel would cease when the conditions to which the representation applied came to an end, or it also might be said that it would only come to an end on notice. In either case it is only a way of ascertaining what is the scope of the representation. He said I prefer to apply the principle that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply. Here it was binding as covering the period down to the early part of 1945, and as from
that time full rent is payable. He therefore gave judgment for the plaintiff company for the amount claimed. Lord Denning held estoppel to be, “A promise was made which was intended to create legal relations and which, to the knowledge of the person making an English contract law decision in the High Court. It reaffirmed the doctrine of promissory estoppel the promise, was going to be acted on by the person to whom it was made, and which was in fact so acted on.”
The interesting thing to note here is that it was 1940s when Lord Denning presented this judgment. It required courage on his part to introduce substantially new doctrine in the law through a case. In 1940s a newly appointed judge or any judge for that sake was not expected to introduce new doctrines. In a book on Lord Denning, Lord Devlin’s Foreword was: “When Tom and I were young the law was stagnant. The old-fashioned judge looked to the letter of the statute and for the case on all fours. He knew that he had to do justice according to law. Either he assumed that the law when strictly applied would always do justice or else he decided that if it did not, it was not his business to interfere.” In 1947-48, almost a year after this decision, in Read v Lyons, House of Lords had proclaimed that it wasn’t the function of House of Lords to rationalise the law in England. But it can be said that it was not Lord Denning’s way. Although according to the researcher, this was more of a desire to make the law fair rather than to desire to rationalise, which was followed by Lord Denning. What was important about this case was that Lord Denning was able to put forth his views by the way of obiter rather than by the way of actual decision. This helped Lord Denning as he got to have his say by way of obiter, and to give judgment for the landowner for the rent foregone during the first two quarters after the end of the war, because he had the opportunity to expand his views on what would have happened if the landlord had claimed the rent for earlier periods, without the fear of the case going to appeal and being reversed. He also mentioned in his autobiography that an appeal might have ruined everything. The researcher thinks he was right here, if Lord Denning’s dicta on promissory estoppel had to come before an appeal court, mostly it would have been rejected being contrary to the fundamental principles of the doctrine of consideration.
Seeing the present situation on the doctrine of promissory estoppel, it can be said that the outcome of this case was almost certainly beneficial for the development of law. This doctrine has become one of the most relied and important doctrines of the law of contracts. According to the research this deviance on the part of Lord Denning led to the development of law rather than to damage the law.
PRIVITY OF CONTRACT
The rule of privity of contract says that a stranger to a contract can neither sue nor can he be sued. This rule has taken firm rules in the English Law of Contracts. LORD DENNING’S contribution in the area of Privity of Contract can be seen in the landmark case of BESWICK V. BESWICK (1967).[ii]
In Beswick v. Beswick, Peter Beswick was an old coal merchant. He didn’t have any business premises. In total he had scales, weights and a lorry. His job was to take the lorry to the yard of the National Coal Board, where he filled the lorry with the coal, and took it back to his customers in neighbourhood. John Beswick, his nephew, helped him in the business. Peter was getting old. So, he and John entered into an agreement in which Peter assigned his business to John in consideration of John employing him for the rest of his life and after his death, paying a weekly annuity to Mrs Beswick. Since the latter term in the contract was for the benefit of someone not a party to contract, the nephew thought it was not enforceable and did not perform it making only one payment of the agreed weekly amount of 5 pounds.
The argument proposed by the nephew was that Mrs Beswick was not a party to the contract and that is why she was not allowed to enforce it due to the privity of contract. Lord Denning held that Mrs Beswick was entitled to claim in her capacity as a third party to the contract, intended to benefit from it. He used section 56 of Law of Property Act, 1925 and equitable theory to support his claim. His words were:
“Where a contract is made for the benefit of a third person who has a legitimate interest to enforce it, it can be enforced by the third person in the name of the contracting party or jointly with him or, if he refuses to join, by adding him as a defendant. In that sense and it is a very real sense, the third person has a right arising by way of contract.”
So, the decision by Court of Appeals was that Mrs Beswick was entitled to enforce the contract in her personal capacity as she was going to benefit from the contract.
Then the case went to House of Lords. Judges there gave the same judgment but with different reasoning. The House of Lords did not approve the approach initiated by Lord Denning and found for the plaintiff on a different ground. Judge there stated that the plaintiff in her personal capacity has no right to sue, but she has a right as administrix of her husband’s
estate to require the appellant to perform this obligation under the agreement” and stated that “the estate (though not the widow personally) can enforce it”.
Though at the time Lord Denning’s approach to the case was rejected by House of Lords, but his approach has been given effect through the Contracts (Rights of Third Parties) act 1999. According to the researcher, this is one battle which Lord Denning should have won. It was 1960s when this case was decided, but still, the idea that because a person is not a party to contract cannot enforce it even if he/she is a beneficiary to the contract does not sound equitable. But again, at that time, legal system was treated as a vending machine where you put a coin and food items come out – you apply given law to a case and judgment comes out. Interpretation of judge or equitable theory was given least importance. Lord Denning’s decision in Beswick v Beswick becoming an act is a proof that though many of his decisions were in controversial, but they still helped in development in law.
It is a concept under standard form of contract. Standard form of contracts is the ones in printed or written form. Such contracts contain a large no. of terms and conditions in “fine
print” which often restrict the liability of the defendant.
LORD DENNING’s contribution in the field contract can be seen in the cases of:
1.Thornton V. Shoe Lane Parking Ltd. [iii]
2.Curtis V. Chemical cleaning And Dyeing Co. [iv]
In the first case, the plaintiff parked his car and a ticket was thrown out by a machine. The ticket pointed towards a poster inside the garage which displayed some conditions, one of the conditions excluded liability for any injury to car or customer. While the plaintiff was taking back his car, he got injured, for which he brought an action against the defendant and the defendants sought the protection of the exemption clause. Issue was that whether the defendant i. e. the parking co. will be held liable?
If we see this case through a general point of view, then the exemption clause exempted the liability of the car company and the car company should not be held liable. But again, Lord
Denning is no normal person. He is known as protector of little man’s right for a reason. He always thought what the impact of his decision on the common people was and this thinking was reflected in his most of the decisions. In this case, Lord Denning pointed out that:
“No customer in a thousand ever read the condition. If he had stopped to do so, he would have missed the train or the boat”. The individual, therefore, deserves to be protected against the possibility of exploitation inherent in such contracts. Thus, evolved the concept of reasonable notice of terms. So, the defendants were held liable. It was held that the exempting condition is so wide and so destructive of rights that the court should not hold any man bound by it unless it is drawn to his attention in the most explicit way.
He further pictorially remarked that in order to give sufficient notice, it would need to be printed in red ink with a red hand pointing to it, or something equally startling. Thus, his this view evolved the concept of reasonable notice of terms.
In the second case, the plaintiff delivered a costly white satin wedding dress to the defendants for cleaning purpose. The defendants asked her to sign a receipt, she enquired further, the defendants told her that receipt says that if some damage happens to beads and sequins, the defendants would be free from any liability. She signed the receipt without reading it. There was a condition in the receipt that the defendant would be free from any liability regarding any damage caused to the dress. When she received the dress, there was a stain on it. On plaintiff’s action, the cleaners pleaded the exemption clause. In this case, Denning stated that the defendant created a false impression on plaintiff by stating that the receipt is only related to beads and sequins and the action of signing the receipt by the plaintiff, was a result of this false impression. The defendant failed to draw the plaintiff’s attention to the width of exemption clause. The judgment was produced in the favour of plaintiff. Denning stated that where the person seeking to rely upon an exemption clause makes some verbal variation, the clause will be treated as void.
This is another concept under standard form of contract. This theory can put a halt on the injustice of exemption clause. Even where a proper notice of the terms and conditions in a document is given, the party imposing the condition may not be able to rely on them if he has committed a breach of the contract which can be described as ‘fundamental’. Lord Denning stated the rule as:
“These exempting clauses are now-a-days all held to be subject to the overriding proviso that the only avail to exempt a party when he is carrying out his contract, not when he is deviating from it or is guilty of a breach which goes to the root of it. Just as a party, who is guilty of a radical breach, is disentitled from insisting on the further performance by the other, so too he is disentitled from relying on an exempting clause.”
Case: Spurling Ltd v. Bradshaw [v]
Facts of the case were: J Spurling Ltd had a warehouse in East London. Mr Andrew Bradshaw had eight barrels of orange juice. He asked Spurling Ltd to store them. In the contract was the “London lighterage clause” which exempted warehousemen from liability due to their negligence. When the barrels were collected, they were damaged. When Bradshaw refused to pay Spurling Ltd, the company sued for the cost. Bradshaw counterclaimed for damages for breach of an implied term of a contract of bailment to take reasonable care.
Denning, held that although the warehouse employees were negligent, the clause effectively exempted them. But his reference to the concept of a fundamental breach precluding an exclusion of liability was rejected by the House of Lords some years later. The clause exempts the company from any obligation, even if the company sold the orange juice to someone else, it still would not be held liable. The researcher thinks that the aim of the contract was to ensure that the company stores and delivers the goods carefully, but if a clause if exempting the company from this duty, it is unreasonable and is hitting at the root of the contract.
The concept of equity and positivism will always remain as two different sides of coin and will always have contradiction in between them. Lord Denning was one of the few judges who accepted that positivism doesn’t necessarily go hand in hand with the concept of equity and justness. Most of the settled authorities by Lord Denning have resulted in the development of legal system and it can never be said substantially that any of the judgement pronounced by Lord Denning defeated the purpose of the law. The researcher at the end would like to conclude that even though Lord Denning was bashed due to over reliance on the concept of equity and thus sometimes defeating the provisions of law and not conforming to the settled authority, his dissenting and radical approach invoked new horizons and avenues to assess the concepts and nuances related to the already existing laws and helped to frame them more broadly and specifically. In the eyes of layman, Denning’s judgement were very popular as they felt that law is bended for their betterment and justice but as a student of law, it can be safely stated that Lord Denning always supported equity with substantial reasoning and even though House of Lords overruled many of the judgements promulgated by him, his judgements broadened the scope of assessment of legal scholars and helped the drafters draft the law in a more cohesive and inclusive manner.
[i] 1 All ER 256
[ii]  UKHL 2,
[iii]  1 All ER 686
[iv]  1 KB 805
[v] 1 WLR 461
Pragya Dhanjika is a B.A., LL.B. (Hons) student at NALSAR University of Law. She is interested in constitutional and international law. Pragya aspires to work in the field of policy development to help those who need resources.