United Kingdom House of Lords Decisions

The only observation of my own which I desire to add is this. It seems to me that the Lord Ordinary has accurately stated the conditions under which the Court might act. If it were “satisfied that those charged by Parliament with the management of the undertaking were acting unreasonably in refusing to raise a rate or rates,” the Court might require them to do so, for they owe a duty to the debenture stockholders. I do not think it would be necessary to show dishonesty on their part. Unreasonableness in the sense of perversity would in my opinion suffice, though without that the Court would not interfere with their discretion.

That point, however, does not arise in the present case.

Earl of Halsbury—I concur.

Lord Atkinson—[ Read by the Lord Chancellor]—The question for decision in the present case is whether the appellant, as judicial factor of the Greenock Harbour Trust, is entitled to demand and receive for sugar shipped into, or unshipped from, vessels (foreign) at the port and harbours of Greenock the rate of 1s. 3d. per ton—being the rate authorised by the Greenock Harbour Act 1880—in place of the rate of 10d. per ton fixed by the Harbour Trustees prior to the appointment of the appellant, the former rate having been fixed by the judicial factor himself, not only without the consent or approval but in opposition to the wishes of the Trustees; and this again depends upon the question whether or not the judicial factor had, having regard to the provision of the Greenock Harbour Act 1888, power to increase the tolls fixed by the Trustees under the provision of the 77th section of the Greenock Harbour Act of 1880.

The Lord Ordinary decided that the judicial factor had not the power he sought to exercise. The Judges of the First Division, from whose decision this appeal has been taken, upheld the decision of the Lord Ordinary.

In my opinion both these decisions were right. They were arrived at on the ground that the judicial factor was merely the receiver of the tolls and incomings of the undertaking and not its manager, and that he did not supersede the Trustees in the discharge of their duties further than this receipt necessarily involved, and was not clothed with their powers.

By the above-mentioned Statute of 1888 persons who had certain claims against the Harbour Trustees were allotted debenture stocks of two different kinds, namely, A debenture stocks and B debenture stocks, having somewhat different privileges and rights.

The interest on the latter description of stocks having fallen into arrear, the holders applied to have a judicial factor appointed over the undertaking.

By the 21st section of the statute the right to have a factor appointed otherwise than as provided in the section following, namely section 22, is expressly taken away, and the powers and privileges of the judicial factor when appointed must therefore be determined by the provisions of that section, coupled with the provisions of section 70 of the Greenock Harbour Act of 1880, which it in effect incorporates, and upon those alone.

The two sections run as follows — Section 22—“In the event of the Trustees failing at any time to make payment of the interest due at the expiry of any half-year, it shall be lawful for any holder of A debenture stock, and, after the expiration of a period of seven years from the passing of this Act, for any holder of B debenture stock, to apply to the Sheriff for the appointment of a judicial factor, in manner provided by section 70 of the Greenock Harbour Act of 1880.”

Section 70—“Every application for a judicial factor under the provisions of this Act shall be made to the Sheriff, and on any such application the Sheriff may, by order in writing, after hearing the parties, appoint some person to receive the whole or a competent part of the rates and duties and other revenues of the trust, until all the arrears of interest or of principal, as the case may be … be fully paid.”

The period of seven years above mentioned was afterwards by the Greenock Harbour Act of 1895 extended to ten years, but the extended period had expired long before the proceedings in this case commenced.

It would appear to me to be clear that the power conferred upon the factor to be appointed under section 70, at the suit of the debenture holders, is the power described in it and none other, namely, the power to “receive the whole or a competent part of the rates and duties and other revenues of the trust until all the arrears of interest or of principal be fully paid,” and nothing more.

So far, but only so far as it is necessary to effect this purpose, the judicial factor necessarily supersedes the Trustees, but the power to “receive” rates or tolls or income does not, and in my opinion cannot, imply the power either to increase these different sources of income or to destroy them. The power and duty of the factor is confined in this respect to receiving those sums which at the time of his appointment the Trustees were then entitled to receive, not the sums which by some act of theirs which they never performed they might thereafter entitle themselves to receive.

Independent, then, of the close analogies between the provisions of these statutes and those other Acts referred to by the Lord President, I think, on the words of section 70 alone, the powers of the judicial factor must be of the limited character I have mentioned, whatever may be his powers when appointed under other circumstances.

If the authority to receive the income of the Trustees included by implication authority to take all steps necessary in order to augment the income to be received, the appointment of the judicial factor

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