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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Black Clawson International Ltd v. Papierwerke AG [1975] UKHL 2 (05 March 1975)
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Cite as: [1975] UKHL 2, [1975] AC 591

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JISCBAILII_CASE_ENGLISH_LEGAL_SYSTEM

    Die Mercurii, 5° Martii 1975

    Parliamentary Archives,
    HL/PO/JU/4/3/1264


    HOUSE OF LORDS


    BLACK-CLAWSON INTERNATIONAL LIMITED

    v.

    PAPIERWERKE WALDHOF-ASCHAFFENBURG
    AKTIENGESELLSCHAFT

    Lord Reid
    Viscount Dilhorne
    Lord Wilberforce
    Lord Diplock
    Lord Simon of Glaisdale


    Lord Reid

    My lords,

    The main question at issue in this case is the proper interpretation of
    section 8 of the Foreign Judgments (Reciprocal Enforcement) Act, 1933.
    The facts are not in dispute: they have been set out by my noble and learned
    friends and I shall not repeat them. It is sufficient to say at this point that
    the Respondents, a German company, were sued by the Appellants in
    Germany in respect of dishonoured bills of exchange. The action was dis-
    missed as being time barred without any enquiry into the merits. The
    German period of limitation is shorter than in England and the Appellants
    now seek to raise the same question here. The main issue in this case is
    whether section 8 entitles the Respondents to rely on the German judgment
    as conclusive on the merits.

    In this case it appears to me to be unusually important to consider as aids
    to construction all other material which the law allows us to look at, and I
    shall first state my view on that matter. We often say that we are looking
    for the intention of Parliament, but that is not quite accurate. We are
    seeking the meaning of the words which Parliament used. We are seeking
    not what Parliament meant but the true meaning of what they said. In
    the comparatively few cases where the words of a statutory provision are
    only capable of having one meaning, that is an end of the matter and no
    further enquiry is permissible. But that certainly does not apply to section 8.

    One must first read the words in the context of the Act read as a whole,
    but one is entitled to go beyond that. The general rule in construing any
    document is that one should put oneself " in the shoes " of the maker or
    makers and take into account relevant facts known to them when the docu-
    ment was made. The same must apply to Acts of Parliament subject to one
    qualification. An Act is addressed to all the lieges and it would seem wrong
    lo take into account anything that was not public knowledge at the time.
    That may be common knowledge at the time or it may be some published
    information which Parliament can be presumed to have had in mind.

    It has always been said to be important to consider the " mischief"
    which the Act was apparently intended to remedy. The word " mischief "
    is traditional. I would expand it in this way. In addition to reading the
    Act you look at the facts presumed to be known to Parliament when the
    Bill which became the Act in question was before it, and you consider
    whether there is disclosed some unsatisfactory state of affairs which Parlia-
    ment can properly be supposed to have intended to remedy by the Act.
    There is a presumption which can be stated in various ways. One is that
    in the absence of any clear indication to the contrary Parliament can be
    presumed not to have altered the common law farther than was necessary
    to remedy the "mischief". Of course it may and quite often does go
    farther. But the principle is that it the enactment is ambiguous, that meaning
    which relates the scope of the Act to the mischief should be taken rather
    than a different or wider meaning which the contemporary situation did not
    call for. The mischief which this Act was intended to remedy may have
    been common knowledge forty years ago. I do not think that it is today.
    But it so happens that a Committee including many eminent and highly
    skilled members made a full investigation of the matter and reported some
    months before the Act was passed (Cmd. 4213K

    I think that we can take this Report as accurately stating the " mischief "
    and the law as it was then understood to be, and therefore we are fully
    entitled to look at those parts of the Report which deal with those matters.


    2

    But the Report contains a great deal more than that. It contains recom-
    mendations, a draft Bill and other instruments intended to embody those
    recommendations, and comments on what the Committee thought the Bill
    achieved. The draft Bill corresponds in all material respects with the Act
    so it is clear that Parliament adopted the recommendations of the Committee.
    But nevertheless I do not think that we are entitled to take any of this into
    account in construing the Act.

    Construction of the provisions of an Act is for the Court and for no one
    else. This may seem technical but it is good sense. Occasionally we can
    find clear evidence of what was intended, more often any such evidence, if
    there is any, is vague and uncertain. If we are to take into account evidence
    of Parliament's intention the first thing we must do is to reverse our present
    practice with regard to consulting Hansard. I have more than once drawn
    attention to the practical difficulties that would involve but the difficulty goes
    deeper. The questions which give rise to debate are rarely those which later
    have to be decided by the Courts. One might take the views of the promoters
    of a Bill as an indication of the intention of Parliament but any view the
    promoters may have had about questions which later come before the Court
    will not often appear in Hansard and often those questions have never
    occurred to the promoters. At best we might get material from which a more
    or less dubious inference might be drawn as to what the promoters intended
    or would have intended if they had thought about the matter, and it would
    I think generally be dangerous to attach weight to what some other members
    of either House may have said. The difficulties in assessing any references
    there might have been in Parliament to the question before the Court are
    such that in my view our best course is to adhere to present practice.

    If we are to refrain from considering expressions of intention in Parliament
    it appears to me that a fortiori we should disregard expressions of intention
    by Committees or Royal Commissions which reported before the Bill was
    introduced. I may add that we did in fact examine the whole of this Report
    —it would have been difficult to avoid that—but I am left in some doubt as
    to how the Committee would have answered some of the questions which we
    have now to answer, because I do not think that they were ever considered
    by the Committee.

    The Committee in paragraph 2 set out the fact that, whereas we accept
    foreign judgments as conclusive, foreign Courts do not in effect recognise
    English judgments, so that a successful plaintiff here has to fight his case
    over again on the merits. They regarded this as a substantial grievance.
    This could be avoided by making conventions with foreign countries, but the
    Committee say that there were two difficulties. First technically we do not
    enforce the foreign judgment as such, and second that our law depends on
    case law and is not formulated in the statute book. There is nowhere in the
    Report any suggestion of any complaint, grievance or difficulty with regard
    to British or foreign judgments in favour of the defendant, and I think that
    it is quite clear that they did not consider that there was any " mischief " with
    regard to such judgments which required the intervention of Parliament.

    Moreover when they set out the existing law as they understood it, they
    do so in a way which was entirely correct if one only has regard to a judgment
    in favour of the plaintiff or a judgment for costs in favour of a successful
    defendant, but was clearly not correct with regard to a judgment dismissing
    the plaintiff's action. A Committee of such eminence could not have been
    mistaken about the law so the only possible inference is that the Committee
    intended only to deal with plaintiffs' judgments.

    The difficulty with regard to judgments for defendants is that an action may
    be dismissed for a variety of reasons: the case may have been decided against
    the plaintiff on the merits or for some quite different reason such as a time
    bar or some other preliminary plea.

    That matter was dealt with by a strong Court in Harris v. Quine (1869)
    L.R. 4 Q.B. 653 when it was held that dismissal of an action in the Isle of
    Man because of a short period of limitation which did not destroy the

    3

    plaintiff's right but merely made it unenforceable, was not a bar to subsequent
    proceedings in England on the same cause of action.

    There is not much reference to the case in subsequent authorities but it
    was noted in the text books and in the sixty odd years which elapsed before
    the Committee's Report there is no indication of any disapproval of it. But
    the Committee never mentioned it or its subject matter. The only possible
    inference is that they did not think it relevant to their enquiry.

    It has been said that it would be strange that the Act should only deal
    with judgments in favour of a plaintiff and omit dealing with judgments in
    favour of a defendant. Looking to the matters which I have dealt with I
    do not find that in the least strange.

    It is clear that the Act did not intend to codify the whole law as to the
    effect of foreign judgments. Section 8(3) is only one proof of that. So I
    approach section 8 with the expectation that it has a limited scope.

    I now turn to the Act. Clearly its principal purpose—dealt with in Part I
    —was to facilitate the enforcement here of rights given by foreign judgments
    to recover sums of money. Besides rights given to plaintiffs in foreign
    actions, such rights might be given to defendants on counterclaims or under
    orders for costs in favour of a successful defendant. These I may call
    plaintiffs' judgments. But Part I has no application to defendants' judgments
    which entitle them to nothing but merely protects them against claims made
    against them. It would I think be a misuse of language to say that such a
    judgment can be enforced. It can only be used as a shield or defence.

    I think that section 8 is ambiguous so this is a case where it is permissible
    to look at the long title. It states that the Act makes provision for the
    enforcement here of certain foreign judgments, for facilitating the enforce-
    ment abroad of judgments given here and " for other purposes in connection
    with " the matters aforesaid ". The matters aforesaid all refer to plaintiffs'
    judgments which are enforceable. I do not see here any indication of an
    intention to deal with judgments which are not enforceable.

    Section 8 is in Part II under the heading " Miscellaneous and General ".
    I do not think that the oilier sections in Part II throw any light on its scope.

    The first question which arises is whether section 8 has any application
    at all to defendants' judgments. There is provision in the Act for severance
    and no doubt it applies to those parts of defendants' judgments which entitle
    the defendant to some remedy. But does the section apply at all to a
    judgment or part of a judgment which merely absolves the defendant or
    dismisses the action against him? Looking to all the matters I have men-
    tioned they seem to me to make it probable that section 8 was not intended
    to deal with such judgments at all.

    Section 8 provides as follows:

    "8.—(1) Subject to the provisions of this section, a judgment to
    " which Part I of this Act applies or would have applied if a sum of
    " money had been payable thereunder, whether it can be registered or
    " not, and whether, if it can be registered, it is registered or not, shall
    " be recognised in any court in the United Kingdom as conclusive
    " between the parties thereto in all proceedings founded on the same
    " cause of action and may be relied on by way of defence or counter-
    " claim in any such proceedings.

    " (2) This section shall not apply in the case of any judgment: —

    " (a) where the judgment has been registered and the registration
    " thereof has been set aside on some ground other than—
    " (i) that a sum of money was not payable under the judgment; or
    " (ii) that the judgment had been wholly or partly satisfied ; or
    " (iii) that at the date of the application the judgment could not be
    " enforced by execution in the country of the original court:
    " or

    4

    " (b) where the judgment has not been registered, it is shown (whether
    " it could have been registered or not) that if it had been registered
    " the registration thereof would have been set aside on an applica-
    " tion for that purpose on some ground other than one of the
    " grounds specified in paragraph (a) of this subsection.

    " (3) Nothing in this section shall be taken to prevent any court in
    " the United Kingdom recognising any judgment as conclusive of any
    " matter of law or fact decided therein if that judgment would have been
    " so recognised before the passing of this Act."

    I find the first few lines very obscure. The section sets out to deal with a
    judgment to which Part I applies " or would have applied if a sum of
    " money had been payable thereunder ". A plaintiff's judgment may order
    specific performance or it may be merely a declaration. It is easy to apply
    these words in such cases. But I find it extremely difficult to apply them to
    defendants' judgments. The essence of such a judgment is that the defendant
    has succeeded and that he has no liability to pay or do anything. No sum
    of money could possibly have been payable under such a judgment. It is
    only by putting an unnatural meaning on these words that defendants'
    judgments can be brought within the section at all.

    I cannot believe that good draftsmen—as this Committee certainly were—
    would have employed such an obscure expression if the intention had
    been to deal with defendants' judgments. It was argued that it throws
    us back to section 1 (2) which is in these terms:

    " (2) Any judgment of a superior court of a foreign country to
    " which this Part of this Act extends, other than a judgment of such
    " a court given on appeal from a court which is not a superior court,
    " shall be a judgment to which this Part of this Act applies, if—

    " (a) it is final and conclusive as between the parties thereto; and

    " (b) there is payable thereunder a sum of money, not being a sum
    " payable in respect of taxes or other charges of a like nature
    " or in respect of a fine or other penalty ; and

    " (c) it is given after the coming into operation of the Order in
    " Council directing that this Part of this Act shall extend to that
    " foreign country.

    " (3) For the purposes of this section, a judgment shall be deemed
    " to be final and conclusive notwithstanding that an appeal may be
    " pending against it, or that it may still be subject to appeal, in
    " the courts of the country of the original court."

    It is said that the effect of these obscure words in section 8(1) is to make
    the section apply to all judgments which would come within the terms of
    section 1(2) if condition (b) were omitted. Besides the fact that this would
    be a very odd way of bringing in another section of the Act that cannot be
    right. If (b) is omitted then section 1(2) would apply to every kind of
    judgment including judgments on status, family matters and in rem. No
    one suggests that section 8 was meant to deal with them. I am not at all
    clear what meaning the Respondents would attach to these obscure words
    if mere reference back to section 1 (2) will not do.

    Then it is said that the references in the last lines of section 8(1) to
    defence and counterclaim shew that the section must have been intended
    to deal with defendants' judgments. I do not agree.

    It is necessary to look closely at the preceding words in the section. It
    makes judgments to which it applies conclusive " in all proceedings founded
    "on the same cause of action". I think that cause of action normally
    means a right alleged to flow from the facts pleaded. But often cause of
    action is used to denote those facts, for example, a statute may provide
    that the cause of action must arise within a particular area: that must
    mean the facts and not the right.

    5

    Here I think it must mean the facts. Suppose that the defendant abroad
    raises proceedings here on the same facts as those in the foreign case.
    If cause of action meant right only one person has the cause of action
    and the section would not apply at all because the proceedings here would
    not be founded on the same cause of action. That could not have been
    intended.

    But if cause of action refers to the facts there is no difficulty in applying
    this part of the section even if the section has no application to defendants'
    judgments. A successful plaintiff abroad is entitled to disregard his foreign
    judgment and sue here again on his original right because a right does
    not merge in a foreign judgment. It might pay him to do that because
    he thinks that he could get here an even more favourable judgment than
    he got abroad. But this section would prevent that. The original defendant
    could plead the foreign plaintiff's judgment as a defence to prevent the
    plaintiff's attempt to do better for himself here. Similarly if the successful
    plaintiff abroad held an unsatisfied foreign judgment and he were sued
    here in some other cause of action, he could counterclaim in respect of
    his unsatisfied foreign judgment. So there is ample scope for the operation
    of the last part of the subsection even if the section applies solely to
    plaintiffs' judgments.

    I am therefore of opinion that section 8 has no application to the present
    case and does not entitle the Respondent to rely on the foreign judgment
    on a preliminary point to prevent enquiry into the merits here. If further
    justification for my view be needed, it would I think be unjust if a foreign
    judgment on a preliminary point were in itself sufficient to prevent enquiry
    into the merits here.

    I may add that if it were held that the section does apply to defendants'
    judgments, I would, perhaps with difficulty, agree with those of your
    Lordships who think that the Appellant should succeed.

    Then the Respondents maintain that Harris v. Quine was wrongly decided.
    I am clearly of opinion for reasons given by your Lordships that the
    decision was right.

    Finally I agree with your Lordships in the matter of discretion. I would
    therefore allow the appeal.

    Viscount Dilhorne

    My lords,

    Under a contract made in December 1961 the Appellants agreed to sell
    paper making machinery to a German company, whose rights and liabilities
    were acquired by the Respondents as a result of a merger in 1970. It will
    be convenient to refer to both companies as the Respondents. The price
    to be paid was £1,210,162. As part payment of the purchase price the
    Respondents accepted 20 Bills of Exchange drawn on them by the Appel-
    lants. Each Bill had a face value of £48,406 and was drawn, negotiated and
    payable in London. Two Bills were to mature every six months between
    August 1963 and February 1968.

    In 1965 the Respondents complained of delays in delivery and of defects
    in the machinery delivered. This was referred to arbitration and despite
    the time that has elapsed, that arbitration has not yet been concluded and is
    not likely to be for a considerable time.

    Thereafter the Respondents refused to honour any of the Bills which
    matured.

    Two Bills which had been dishonoured when presented by Barclays Bank
    by whom they had been discounted, were the subject of litigation in this
    country and in Germany. The Bank's claim was strenuously resisted at every

    6

    stage. When judgment was given in this country for the Bank, it was not
    satisfied. When the Bank sought to enforce the judgment in Germany, that
    was resisted on the ground that the Respondents had had no opportunity
    of stating their case. This plea was finally rejected by the Federal Supreme
    Court of Germany on the 25th March, 1970.

    In view of the difficulties that the Bank had encountered in getting pay-
    ment of the amounts due on these two Bills, when two Bills due for payment
    on the 31st August, 1966 were dishonoured, the Bank called on the Export
    Credit Guarantee Department to implement a guarantee they had given to
    the Bank and that Department in turn called on the Appellants to implement
    their undertaking to indemnify the Department against any monies the
    Department had to pay the Bank. In accordance with their agreement with
    the Bank, the Appellants bought these Bills in August 1972 and so became
    holders of them for value.

    In the same month, on the 24th August, 1972 the Appellants began pro-
    ceedings against the Respondents in the District Court of Munich. Five days
    later the Appellants applied ex parte in this country for leave to issue a writ
    against the Respondents claiming the amount due on the two Bills and
    interest and also asking leave to serve notice of the writ on the Respondents
    in Germany. They feared that the proceedings in Germany might be held
    to be time barred in Germany ; and if the writ was not issued, their claim
    would shortly have become statute barred in this country. They were given
    the leave for which they asked.

    On the 30th November, 1972 the District Court of Munich dismissed the
    Appellants' claim, holding that under German law the applicable period of
    limitation was three years and so that the Appellants' claim was time barred.

    Notice of the issue of the writ was served on the Respondents on the 14th
    August, 1973.

    The Respondents did not enter an appearance but by summons sought an
    order that the writ, service of notice thereof and all subsequent proceedings
    thereon should be set aside. The Master refused to make that order and
    the Respondents' appeal to Talbot J., The Judge in Chambers, was dis-
    missed. The Respondents then appealed to the Court of Appeal which
    gave judgment in their favour on the 19th March 1974.

    On the 27th March, 1974 the Munich Court of Appeal allowed the Appel-
    lants' appeal against the decision of the District Court on the ground that
    the English period of limitation, namely six years, was applicable to their
    claim. The Appeal Court referred the case back to the District Court for
    continuation of the proceedings and in those proceedings the Respondents
    are entitled to put forward any defence they may have to the claim.

    The Respondents have appealed against the decision of the Munich Court
    of Appeal to the Federal Supreme Court but that appeal has not yet been
    heard.

    In the Court of Appeal the Respondents put forward a new point based
    on section 8(1) of the Foreign Judgments (Reciprocal Enforcement) Act 1933,
    and it was on this ground that the Court (Lord Denning M.R., Megaw and
    Scarman L.JJ.) allowed the appeal.

    The long title of that Act reads as follows:

    " An Act to make provision for the enforcement in the United
    " Kingdom of judgments given in foreign countries which accord reci-
    " procal treatment to judgments given in the United Kingdom, for
    " facilitating the enforcement in foreign countries of judgments given in
    " the United Kingdom, and for other purposes in connection with the
    " matters aforesaid."

    7

    Part I of the Act is headed " Registration of Foreign Judgments " and is
    directed to securing the enforcement of foreign judgments in this country.
    Part II is headed " Miscellaneous and General ". Section 8 is the first section
    in this Part and reads as follows:

    " 8.—(1) Subject to the provisions of this section, a judgment to which
    " Part I of this Act applies or would have applied if a sum of money.
    " had been payable thereunder, whether it can be registered or not, and
    " whether, if it can be registered, it is registered or not, shall be recog-
    " nised in any court in the United Kingdom as conclusive between the
    " parties thereto in all proceedings founded on the same cause of action
    " and may be relied on by way of defence or counterclaim in any such
    " proceedings.

    " (2) This section shall not apply in the case of any judgment: —
    " (a) where the judgment has been registered and the registration
    " thereof has been set aside on some ground other than: —
    " (i) that a sum of money was not payable under the judgment; or
    " (ii) that the judgment had been wholly or partly satisfied ; or
    " (iii) that at the date of the application the judgment could not be
    " enforced by execution in the country of the original court; or
    " (b) where the judgment has not been registered, it is shown (whether
    " it could have been registered or not) that if it had been registered
    " the registration thereof would have been set aside on an applic-
    "ation for that purpose on some ground other than one of the
    " grounds specified in paragraph (a) of this subsection.

    " (3) Nothing in this section shall be taken to prevent any court in the
    " United Kingdom recognising any judgment as conclusive of any matter
    " of law or fact decided therein if that judgment would have been so
    " recognised before the passing of this Act."

    The judgments to which Part I of the Act applies are defined in section
    1(2) and (3) of the Act which read as follows:

    " (2) Any judgment of a superior court of a foreign country to which
    " this Part of this Act extends, other than a judgment of such a court
    " given on appeal from a court which is not a superior court, shall be a
    " judgment to which this Part of this Act applies, if—

    " (a) it is final and conclusive as between the parties thereto ; and
    " (b) there is payable thereunder a sum of money, not being a sum
    " payable in respect of taxes or other charges of a like nature or
    " in respect of a fine or other penalty ; and

    " (c) it is given after the coming into operation of the Order in Council
    " directing that this Part of this Act shall extend to that foreign
    " country.

    "(3) For the purposes of this section, a judgment shall be deemed to
    " be final and conclusive notwithstanding that an appeal may be pending
    " against it, or that it may still be subject to appeal, in the courts of the
    " country of the original court."

    Such a judgment may be registered if it has not been wholly satisfied and
    if it is not one which could not have been enforced by execution in the
    country of the original court. If a judgment of a foreign court is registered,
    then for the purposes of execution, if it is not competent to a party to apply
    for the registration to be set aside or such an application has been finally
    determined, the registered judgment is to be of the same force and effect as
    a judgment originally given by the registering court. Proceedings may be
    taken on it as if it were a judgment of that court and the judgment is to carry
    interest as if it were a judgment of that court (section 2(2)).

    Part I of the Act only applies to judgments under which a sum of money
    is payable. Section 8(1) applies to all judgments to which Part I applies and
    also to judgments to which that Part does not apply but would have applied
    if money had been payable under them, that is to say judgments which are
    final and conclusive and given after the Order in Council applying Part I to
    the foreign country concerned has been made (section l (2)(a) and (c)).


    8

    I cannot therefore see that there is any ground for concluding, as was
    contended by the Appellants, that section 8(1) only applies to judgments
    which can be enforced. Section 8(1) does not deal at all with enforcement.
    That is dealt with in Part I.

    As it was not disputed that in this case section l(2)(a) and (c) were satisfied,
    in my opinion the judgment of the District Court of Munich was one to which
    section 8(1) applies.

    That subsection goes on to provide that such a judgment shall be recognised
    in any court in the United Kingdom as " conclusive between the parties
    " thereto ", and to state when it is to be so recognised, namely " in all
    " proceedings founded on the same cause of action ". It concludes by saying
    that it may be relied on by way of defence or counterclaim in any such
    proceedings.

    The subsection does not expressly state of what the judgment is to be
    conclusive and the controversy in this appeal is as to that.

    In Thoday v. Thoday [1964] P. 181 Diplock L.J., as he then was. said at
    p. 197 that there were two species of estoppel per rent judicatam. The
    first, which he called " cause of action estoppel" was that which prevents
    a party to an action from asserting or denying, as against the other party,
    the existence of a particular cause of action, the non-existence or existence
    of which has been determined by a court of competent jurisdiction in
    previous litigation between the same parties. The second, which my noble
    and learned friend called " issue estoppel " arises where in previous litigation
    one of the matters in issue between the parties has already been decided
    by a competent court.

    Lord Denning M.R. in the Court of Appeal held that section 8(1) dealt
    with " cause of action estoppel " and section 8(3) with " issue estoppel";
    and that as the proceedings in England would be founded on the same cause
    of action as those in Germany, the judgment in Germany was to be treated
    as conclusive. That judgment did not decide that money was not owed by
    the Respondents to the Appellants but that it was not recoverable owing
    to the German period of limitation. Nevertheless, in Lord Denning's
    view, section 8(1) operated to prevent the Appellants from suing in this
    country on the same cause of action even though the period of limitation
    under English law had not expired.

    Megaw L.J. and Scarman L.J. held that section 8(1) displaced the
    common law as to the enforcement and recognition of foreign judgments,
    and agreed that the judgment of the German court prevented proceedings
    being instituted in this country.

    The contrary view advanced by the Appellants was that the judgment
    of the foreign court was only by section 8(1) made conclusive as to the
    matters decided therein and so was conclusive only on the question whether
    the limit imposed by German law on the time within which actions must
    be instituted applied and barred the action.

    Although since 1964 the use of the expressions " cause of action estoppel "
    and " issue estoppel " has become common, I do not think that that division
    into two species of estoppel per rem judicatam was recognised in 1933
    or that those expressions were then used. If that be right, it would indeed
    be singular if Parliament had then intended section 8(1) only to apply
    to " cause of action estoppel" and section 8(3) only to " issue estoppel".

    In this connection I think the way in which section 8(3) is drafted is
    illuminating. If that section was intended to cover issue estoppel, I would
    not have expected it to commence with the words " Nothing in this section
    "shall be taken to prevent . . .". That is a formula frequently used in
    statutes when a provision is inserted ex abundanti cautela. Its use in
    section 8(3) leads me to the conclusion that section 8(3) was not intended to
    cover issue estoppel as a distinct species of res judicata but was inserted

    9

    to ensure that the Act did not by section 8(1) reduce the recognition given
    by the courts of this country under the common law to foreign judgments.
    It follows that section 8(1) was not intended, if this be so, to cover only
    one species of estoppel per rem judicatam.

    Our attention was drawn to the fact that the Foreign Judgments (Reciprocal
    Enforcement) Act 1933 was passed by Parliament on the 13th April, 1933
    shortly after the Report of a Committee called the Foreign Judgments
    (Reciprocal Enforcement) Committee had been presented to Parliament.
    That was done in December 1932. The Committee had been appointed
    by the then Lord Chancellor and its chairman was Greer L.J. It had
    among its members many very eminent lawyers. To its Report were annexed
    a draft of Conventions to be entered into with foreign countries and a
    draft Bill, clause 8 of which was in precisely the same terms as section 8
    of the Act.

    The question was debated to what extent could recourse be had to the
    Committee's Report as an aid to the construction of section 8.

    Ever since Heydon's Case (1584) 3 Co. Rep. 7a it has been recognised
    that there are, in connection with the interpretation of statutes, four questions
    to be considered: (1) what was the common law before the making of the
    Act; (2) what was the mischief or defect for which the law did not provide ;
    (3) what remedy Parliament had provided and (4) the reason for the remedy
    (see Eastman Photographic Materials Co. v. Comptroller of Patents [1898]
    A.C. 571).

    In that case Lord Halsbury cited a passage from the report of com-
    missioners appointed to inquire into the duties, organisation and arrange-
    ments of the Patent Office in relation to trade marks and designs. That
    passage not only referred to what the existing law was but also to what
    the commissioners thought it ought to be ; and after citing it. Lord Halsbury
    said:

    " My Lords, I think no more accurate source of information as to
    " what was the evil or defect which the Act of Parliament now under
    " construction was intended to remedy could be imagined than the
    " report of that commission."

    Many instances were cited in the course of the argument where the Courts
    have had regard to the reports of such commissions or committees ; e.g. in
    Rookes v. Barnard
    [1964] A.C. 1129 and Heaton's Transport (St. Helens)
    Ltd.
    v. Transport and General Workers Union [1973] A.C. 15 to the Report
    of the Royal Commission on Trade Unions and Employees' Associations,
    in National Provincial Bank Ltd., v. Ainsworth [1965] A.C. 1175 to the
    Report of the Royal Commission on Marriage and Divorce and in Letang v.
    Cooper [1965] 1 Q.B. 232 to the Report of the Tucker Committee on the
    Limitation of Actions. Other instances could be cited and, despite the
    observations of Lord Wright with which Lord Thankerton agreed in Assam
    Railways
    v. Commission of Inland Revenue [1935] A.C. 445, it is now, I
    think, clearly established that regard can be had to such reports.

    In that case counsel had sought to refer to recommendations of the Royal
    Commission on Income Tax of 1920 and to argue that the Finance Act 1920
    followed those recommendations. The House did not allow him to do so,
    Lord Wright saying at p. 458:

    ". . . on principle no such evidence for the purpose of showing the
    " intention, that is the purpose or object, of an Act is admissible ; the
    " intention of the Legislature must be ascertained from the words of the
    " statute with such extraneous assistance as is legitimate: as to this,
    " I agree with Farwell L.J. in Rex v. West Riding of Yorkshire County
    " Council [1906] 2 K.B. 676 where he says:—'I think the true rule
    " ' is expressed with accuracy by Lord Langdale in giving the judgment
    " ' of the Privy Council in the Gorham case in Moore 1852 edition p. 462
    " ' we must endeavour to attain for ourselves the true meaning of the
    " ' language employed '—in the Articles and Liturgy—' assisted only

    10

    " ' " by the consideration of such external or historical facts as we may
    " ' " find necessary to enable us to understand the subject matter to
    " ' " which the instruments relate, and the meaning of the words
    " ' " employed "'.... It is clear that the language of a Minister of
    " the Crown in proposing in Parliament a measure which eventually
    " becomes law is inadmissible and the Report of Commissioners is even
    " more removed from value as evidence of intention because it does
    " not follow that their recommendations were accepted."

    Despite these observations, in Shenton v. Tyler [1939] 1 Ch. 620 (C.A.)
    Sir Wilfred Green M.R. cited a recommendation of the Common Law
    Commissioners of 1852 saying that it was accepted by the Legislature and
    embodied in the Evidence Amendment Act 1853.

    The task confronting a Court when construing a statute is to determine
    what was Parliament's intention. In a perfect world the language employed
    in the Act would not be capable of more than one interpretation but due in
    part to the lack of precision of the English language, often more than one
    interpretation is possible. Then, to enable Parliament's intention to be
    determined, as I understand the position, one may have regard to what
    was the law at the time of the enactment and to what was the mischief at
    which it was directed.

    That one can look at such reports to discern the mischief is now, I think,
    established but there is a difference of opinion as to what may be looked at
    in such reports. Can one have regard to the recommendations of the
    Committee or. Commission? Where a draft Bill is attached to the report,
    as is now frequently the case, and was the case in this instance, can one
    refer to the terms of the draft Bill when they have been enacted without
    material alteration by Parliament? Can one refer to the notes on the
    clauses of the draft Bill appended to it by the Committee, and in the present
    case to the terms of the draft Conventions prepared by the Committee and
    attached to their Report? Is it legitimate to make use of such parts of a
    report as an aid to the construction of the Act?

    In my opinion it is. The reason why one is entitled to consider what
    was the mischief at which the Act was aimed is surely that that will throw
    a revealing light on the object and purpose of the Act, that is to say the
    intention of Parliament; and, applying Lord Halsbury's observations cited
    above, what more accurate source of information both as to the law at the
    time and as to the evil or defect which the Act was intended to remedy can
    be imagined than the report of such a Committee matter, the reports of the
    Law Commission.

    The contrary view seems to impose on judges the task of being selective
    in their reading of such reports. What part may they look at and what
    not? Have they to stop reading when they come to a recommendation?
    Have they to ignore the fact, if it be the fact, that the draft Bill was enacted
    without alteration? To ignore what the Committee intended the draft Bill
    to do and what the Committee thought it would do? I think not.

    I think so to hold would be to draw a very artificial line which serves no
    useful purpose. What weight is to be given to a Committee's recommenda-
    tions is another matter. That may depend on the particular circumstances.
    If the report of the Committee merely contains recommendations, while I
    think that regard can be had to them, little weight may be attached to them
    as it may not follow that Parliament has accepted them. Parliament may
    have decided to go further or not as far. But where, as here, a draft Bill
    is attached to the report, then one can compare its provisions with those
    of the Act and if there is no difference or no material difference in their
    language, then surely it is legitimate to conclude, as Greene M.R. did in
    Shenton v. Tyler (supra), that Parliament had accepted the recommendation
    of the Committee and had intended to implement it. In such a case that
    recommendation becomes as it did in Eastman Photographic Material Ltd. v
    Comptroller General of Patents (supra) the most accurate source of
    information as to the intention of Parliament.

    11

    Of course, it may be that the language used in the draft Bill and in the
    Act is defective and does not carry out the Committee's and Parliament's
    intention. Regard must be had to that possibility, however remote it may be.

    In Letang v. Cooper [1965] 1 Q.B. 232 Lord Denning M.R. at p. 240
    said:

    " It is legitimate to look at the report of such a committee" (the
    Tucker Committee on the Limitation of Actions) "so as to see what
    " was the mischief at which the Act was directed. You can get the
    " facts and surrounding circumstances from the report so as to see the
    " background against which the legislation was enacted. This is always
    " a great help in interpreting it. But you cannot look at what the
    " committee recommended, or at least, if you do look at it, you should
    " not be unduly influenced by it. It does not help you much, for
    " the simple reason that Parliament may, and often does, decide to
    " do something different to cure the mischief."

    While I respectfully agree that recommendations of a Committee may
    not help much when there is a possibility that Parliament may have decided
    to do something different, where there is no such possibility, as where the
    draft Bill has been enacted without alteration, in my opinion it can safely be
    assumed that it was Parliament's intention to do what the Committee
    recommended and to achieve the object the Committee had in mind. Then,
    in my view the recommendations of the Committee and their observations
    on their draft Bill may form a valuable aid to construction which the
    Courts should not be inhibited from taking into account.

    It does not follow that if one can have regard to the whole of a
    Committee's report, one ought also to be able to refer to Hansard to see
    what the Minister in charge of a Bill has said it was intended to do. In
    the course of the passage of a Bill through both Houses there may be many
    statements by Ministers, and what is said by a Minister in introducing a
    Bill in one House is no sure guide as to the intention of the enactment,
    for changes of intention may occur during its passage. But when a Bill
    is drafted by such a Committee as that in this case and enacted without
    alteration, then. I repeat, in my opinion it is legitimate to have regard to
    the whole of the Committee's Report, including the terms of the draft Bill
    attached to it, to the Committee's notes on its clauses and to the draft
    Conventions annexed to the Report, for they constitute a most valuable
    guide to the intention of Parliament.

    The Report of the Committee begins with a summary of the Committee's
    recommendations and the reason therefor. They were primarily concerned
    with securing that English judgments should be recognised and enforced in
    foreign countries without the case having to be fought again on the merits
    in a foreign court. To that end Conventions had to be entered into with
    foreign countries and the Committee had ascertained that some foreign
    countries would be willing to allow judgments to be enforced " on similar
    " conditions to those on which we enforce theirs, provided that those
    " conditions are defined in a Convention ". They pointed out that there
    were two difficulties in the way of concluding such Conventions: (1) that
    under the then existing procedure foreign judgments were not enforced as
    such, and (2) " The principles on which English courts accept foreign
    " judgments as conclusive depend on case law and are not to be found
    " formulated in the Statute Book ". Their aim was, they said, to remove
    these difficulties ; and, they said, so far as the position in England was
    concerned, the change they proposed involved " no radical alterations of
    " the present position ".

    Paragraph 4 of their Report appears under the heading " The Present
    " Position, (i) Recognition and enforcement of foreign judgments in
    " England ", and reads as follows:

    " Under English common law a foreign judgment (other than a
    " judgment given in a criminal or fiscal matter), though it does not
    " operate in England to merge the original cause of action, is, provided


    12

    " that certain reasonably well-defined conditions are satisfied, recognised
    " as conclusive between the persons who were parties to the proceedings
    " in the foreign court as regards the question therein adjudicated* upon,
    " and can be relied upon by any of the said parties or their privies,
    " if further proceedings are brought in England by any other such party
    "or his privy in respect of the same cause of action."


    To this paragraph there was the following footnote:

    " * The words ' question adjudicated upon' refer to the actual decision
    " (the operative parts of the judgment) as opposed to the grounds or
    " reasoning upon which it may be based, in the course of which other
    " points of law or fact may have been incidentally decided as prelim-
    " inaries (necessary or otherwise) to the final conclusion. The authoritise
    " on the effect of foreign judgments in English law are not very
    " numerous. They appear, however, clearly to justify the statement
    " of the position given above though it may be that this statement is
    " slightly too narrow. This statement is in any case only intended to
    " apply to judgments in ordinary proceedings in personam."

    The wording of this paragraph closely resembles that of section 8(1)
    of the Act and the passages in the Report to which I have referred establish,
    in my opinion, that by Part I of the Bill the Committee sought to secure
    that certain foreign judgments were capable of being enforced as such in
    English courts and by section 8 to state in a statute the principles on which
    English courts recognise foreign judgments as conclusive. There is nothing
    to be found in these passages or elsewhere in the Report to support the
    contention that it was the Committee's intention to alter or depart in any
    way from the principles on which English courts had under the common law
    regarded foreign judgments as conclusive.

    Paragraph 10 of the Report states the reasons in the Committee's view
    for " the present failure " of foreign courts to recognise and enforce British
    judgments and the steps necessary to remedy that position. In paragraph
    10(b) they say:

    " The whole of the English procedure, including the conditions
    " required for the recognition of a foreign judgment as conclusive,
    " depends upon rules of Common Law only. There is always a natural
    " tendency for the foreign court to suppose that such Common Law
    " rules are too indefinite to be applied as rigidly as the provisions of
    " a statute or a code, and that they are largely discretionary. . . .".

    The Report continues:

    " Therefore, in the case of these countries, in practice ... the
    " conclusion of an international convention — containing reciprocal
    " obligations for the recognition and enforcement of judgments which
    " will be made binding as part of the municipal law of the foreign
    " country, together with the statement of our own rules in statutory form
    " —appears to be the only manner by which everything like reciprocal
    " treatment can be secured in the mutter of recognition and enforcement
    " of British judgments."

    and in paragraph 16 the Report states:

    " It was, however, desirable that such legislation, in laying down
    " the conditions under which, in return for reciprocal treatment, the
    " judgments of foreign countries should be enforced, should not depart
    " from the substantive principles of the common law applicable to
    " foreign judgments in general."

    In paragraph 23 the Committee emphasised the manner in which the draft
    Bill and rules on the one hand and the draft conventions on the other had
    been prepared " concurrently with and in the light of each other, so as to
    " render the arrangements proposed in connexion with foreign judgments
    " in the United Kingdom consistent with the conventions, and vice versa."


    13

    One Annex to the Report contains a draft Convention with Germany.
    Article 3 thereof deals with the recognition of judgments and Article 3(2)
    provides that a judgment which is recognised " shall be treated as conclusive
    " as to the matter thereby adjudicated upon in any further action between
    " the parties . . . and as to such matter shall constitute a defence in a further
    " action between them in respect of the same cause of action." No such
    Convention was entered into with Germany until 1961 and Article III(4) of
    that Convention corresponds with Article 3(2) of the draft.

    In their notes on the clauses of the draft Bill, the Committee say:

    " Clause 8 " (now section 8 of the Act) " contains the provisions of the
    " Bill with regard to the recognition of foreign judgments as final and
    " conclusive between the parties as regards the question therein adjudi-
    " cated upon. It is entirely in accordance with the position at Common
    " Law " (as explained in paragraph 4 of the Report) " and clause 8(3) "
    (section 8(3) of the Act) " saves the existing Common Law rules in any
    " cases where the rule laid down by the Act may be narrower in
    " operation than the Common Law."

    The Report thus shows, in my opinion beyond any question of doubt,
    that it was not the Committee's intention by clause 8 to make any change in
    the existing common law rules as to recognition of foreign judgments; that
    clause 8(3) was inserted ex abundanti cautela and that clause 8(1) was only
    intended to operate to make a judgment conclusive between the parties as
    to the matter thereby adjudicated upon.

    Unfortunately the Report was not brought to the attention of the Court of
    Appeal.

    Parliament by enacting clause 8 without alteration must, in my opinion,
    have intended to implement the intentions of the Committee and I can see
    no ground for holding that they did not effectively do so.

    What then was the question adjudicated upon by the District Court of
    Munich on the 30th November, 1972? It was not that no money was owed
    by the Respondents to the Appellants. The expert evidence in this case
    made it clear that the Appellants' right to payment was not extinguished by
    that decision. It was not a judgment " on the merits ", an expression used
    not infrequently by lawyers, and used by the Committee in paragraph 1 of
    their Report and one to which I must confess I have no difficulty in attach-
    ing a meaning. It was a decision that the German period of limitation
    applied and that the Appellants' claim was consequently time barred.

    In these circumstances what was the position at common law. That was
    in my opinion clearly settled by the decision in Harris v. Quine (1869) L.R.4
    Q.B.653.

    There it was held that a Manx statute which provided a three year period
    of limitation barred the remedy but did not extinguish the debt and that
    proceedings to recover the debt, though time barred in the Isle of Man, could
    be brought in this country. In the course of his judgment Blackburn J. said:

    "... it was said that the plea . . . would shew that the Manx court
    " had determined the matter and that the matter ought not to be litigated
    " again in the courts of this country ; and, no doubt, wherever it can be
    " shewn that a court of competent jurisdiction has decided the matter,
    " the plaintiff is estoppel from disputing the decision, or litigating the
    " matter in another court, while the decision of the first court remains
    " unreversed. But, in the present case, all that the Manx court decided
    " was, that in the courts of the Isle of Man the plaintiffs could not
    " recover."

    So here all that the German court decided was that in the German courts
    the Appellants could not recover.


    14

    It was contended that this case was wrongly decided. I found that argu-
    ment entirely unconvincing. It is a decision which has stood unchallenged
    since 1869. It was submitted that the Committee must when preparing
    their Report have overlooked it. I cannot accept that. It is a decision cited
    in Dicey's Conflict of Laws without any adverse comment and in the 1st
    Edition of that work as authority for the proposition that

    "... it is not an answer to an action in England if it be ... a judg-
    " ment which, though it decides the cause finally in the country where it
    " is brought, does not purport to decide it on the merits, e.g., if it is
    " given in favour of the defendant on the ground that the action is
    " barred by a statute of limitations."

    If the Act of 1933 had not been passed, then under the common law, in the
    light of this decision, proceedings by the Appellants in England would not
    have been barred by the decision of the Munich court. As in my opinion
    section 8 of the Act was intended to and does preserve the common law
    position without alteration, the Respondents' claim that that decision prevents
    proceedings in England must be rejected.

    In the Court of Appeal some importance was attached to the concluding
    words of section 8(1), that the judgment is to be recognised as conclusive
    between the parties in all proceedings founded on the same cause of action
    and " may be relied on by way of defence or counterclaim in any such
    " proceedings ". Res judicata may be relied on by way of defence but the
    need to provide that it may be relied on by way of counterclaim founded on
    the same cause of action is somewhat obscure. Whatever its content be, the
    inclusion of the reference to a counterclaim does not, in my view, answer
    the question or throw a light on the answer to the question of what is a
    judgment to be recognised as conclusive? In my opinion, though the words
    "of the matter adjudicated upon" are not in section 8(1), though they
    were in the draft Convention and in paragraph 4 of the Report, nevertheless
    the language of that subsection provides that a judgment to which the sub-
    section applies is to be conclusive of what it decides and not of what it does
    not decide. And the judgment of the Munich court did not decide that
    money was not owing by the Respondents to the Appellants. It was not a
    decision on the merits of the Appellants' claim.

    I would therefore allow the appeal. But the position has changed since
    the Court of Appeal's decision. The judgment of the Munich Court has
    been reversed and that judgment reversing it is now under appeal.

    In these circumstances while leave should be given to issue the writ and to
    serve notice thereof on the Respondents, thereafter there should be a stay
    pending the decision of the Federal Supreme Court and with liberty to apply
    after the decision of the Court has been given. I can see that formidable
    arguments may be advanced, if the Federal Supreme Court upholds the
    reversal of the decision of the Munich court, for saying that the Appellants,
    having chosen the German courts as the forum and as the case can then be
    heard on its merits, should not in the exercise of discretion be allowed at the
    same time to proceed in the courts of this country. But it is not necessary
    or desirable to express any opinion on that now.

    For the reasons I have stated, in my opinion this appeal should be allowed.

    Lord Wilberforce

    MY LORDS,

    This appeal is essentially concerned with the interpretation of section 8(1)
    of the Foreign Judgments (Reciprocal Enforcement) Act, 1933. From the
    facts which have been fully stated I select those necessary for our decision.

    1. The present action is brought upon two Bills of Exchange drawn by the
    Appellants and accepted by a predecessor in business of the Respondents-
    it is not disputed that the Respondents have succeeded to any liability on
    these Bills. The proper law of these Bills is English law. The German

    15

    proceedings were brought by the Appellants against the Respondents on
    these same Bills after dishonour.

    1. Action on the Bills in England is not, we must assume, barried by the
      English Limitation Act, 1939.

    2. In Germany, a three year period of limitation applies to Bills of
      Exchange. If the German period is applied to the Bills, action upon them
      is barred by German law. The question litigated in Germany, upon which
      the German Courts have differed, is whether in proceedings before a German
      court the German period does apply. The basis of the affirmative decision
      of the District Court of Munchen is (briefly) that limitation is, under German
      law, classified as a matter of substance, not of procedure; that as the proper
      law of the Bills is English law, this involves the application by a German
      Court of English law ; that under English law limitation is regarded as a
      matter of procedure; that, applying the doctrine of renvoi (accepted by the
      German Court), reference back has to be made to the lex fori, i.e., German
      law, so that the proceedings were barred.

    3. According to expert evidence, German law, though classifying limit-
      ation as a matter of substance, did not, in relation to the subject matter of
      dispute, extinguish the right, but did affect the remedy.

    As this point is crucial, I quote certain passages from the evidence filed
    on behalf of the Respondents:

    " In German law what is described in England as the limitation of
    " actions does not extinguish the right. Nonetheless such limitation is
    " a matter of substance, not of procedure." Dr. F. A. Mann.

    " The completion of the limitation affects the substantive quality of
    " the right. Notwithstanding the limitation it is true the right remains
    " in existence. Its effect, however, is weakened by the fact that the
    " obligor is entitled permanently to refuse performance."

    Professor Feimehl, commenting on the German Civil Code, section 222,
    cited by Dr. F. A. Mann:

    "... the position is that, while the debts under the bills are not
    " extinguished, the defendants are under no duty to pay them because
    " they have a permanent answer to them." Dr. F. A. Mann.

    5. The judgment of the District Court of Munchen, dated 30th November,
    1972, is in evidence. U consists of a single document containing (i) a dis-
    positive part, (ii) a statement of facts, (iii) grounds for the decision. The
    dispositive part stales " The suit is dismissed ". The grounds for decision
    set out fully the grounds in law for holding that the claim is barred by the
    German law as to limitation. I mention this point because the Respondents
    contend that the " judgment " to be recognised under the Act of 1933 is the
    dispositive provision dismissing the suit and nothing more.

    After this preface I come to the Act of 1933. It is in two parts. Part I
    contains provisions for the enforcement of foreign judgments by registration.
    Part II contains miscellaneous and general provisions starting with section 8,
    which deals with recognition. The question for decision is whether, and if so
    to what extent, section 8(1) applies to the present situation. There are two
    issues. The first is whether the subsection applies at all to foreign judgments
    dismissing a suit, i.e.. in favour of a defendant: the Appellants' contention
    is that it only applies to judgments which could, if certain other elements
    existed (e.g., an order to pay money), be enforceable under Part I. The
    second issue is for what purpose and to what extent a foreign judgment is
    " conclusive ". The Appellants' contention is that it is to be conclusive as
    to any matter adjudicated upon, but no further. Since in this case all that
    was adjudicated upon was that the Plaintiffs have no remedy in Germany
    upon the Bills, by reason of the expiry of the German limitation period,
    recognition of this fact does not prevent the Appellants from suing in
    England. I shall deal first with the second point.

    My Lords, we are entitled, in my opinion, to approach the interpretation
    of this subsection, and of the 1933 Act as a whole, from the background of

    16

    the law as it stood, or was thought to stand, in 1933 and of the legislative
    intention. As to these matters the Report to which my noble and learned
    friend, Lord Reid, has referred is of assistance. He has set out in his
    opinion the basis upon which the Courts may consult such documents.
    I agree with his reasoning and I only desire to add an observation of my
    own on one point. In my opinion it is not proper or desirable to make
    use of such a document as a Committee or Commission report, or for that
    matter of anything reported as said in Parliament, or any official notes on
    clauses, for a direct statement of what a proposed enactment is to mean
    or of what the Committee or Commission thought it means—on this point
    I am in agreement with my noble and learned friend Lord Diplock. To be
    concrete, in a case where a Committee prepared a draft Bill and accompanies
    that by a clause by clause commentary, it ought not to be permissible,
    even if the proposed Bill is enacted without variation, to take the meaning of
    the Bill from the commentary. There are, to my mind, two kinds of reason
    for this. The first is the practical one, that if this process were allowed
    the Courts would merely have to interpret, as in argument we were invited
    to interpret, two documents instead of one—the Bill and the commentary
    on it, in particular Annex V para. 13. The second is one of constitutional
    principle. Legislation in England is passed by Parliament, and put in the
    form of written words. This legislation is given legal effect upon subjects
    by virtue of judicial decision, and it is the function of the Courts to say
    what the application of the words used to particular cases or individuals
    is to be. This power which has been devolved upon the judges from
    the earliest times is an essential part of the constitutional process by which
    subjects are brought under the rule of law—as distinct from the rule of
    the King or the rule of Parliament; and it would be a degradation of
    that process if the Courts were to be merely a reflecting mirror of what
    some other interpretation agency might say. The saying that it is the
    function of the Courts to ascertain the will or intention of Parliament is
    often enough repeated, so often indeed as to have become an incantation.
    If too often or unreflectingly stated, it leads to neglect of the important
    element of judicial construction ; an element not confined to a mechanical
    analysis of today's words, but, if this task is to be properly done, related
    to such matters as intelligibility to the citizen, constitutional property, con-
    siderations of history, comity of nations, reasonable and non-retroactive
    effect and, no doubt, in some contexts, to social needs.

    It is sound enough to ascertain, if that can be done, the objectives of
    any particular measure, and the background of the enactment; but to take
    the opinion, whether of a Minister or an official or a Committee, as to
    the intended meaning in particular applications of a clause or a phrase,
    would be a stunting of the law and not a healthy development.

    In this light I can state in summary form the considerations to which
    the Report brings me in interpreting the Act. First, the objective of the
    Act is clear: it was to secure the enforcement by other countries of English
    judgments, mainly money judgments, upon principles similar to those on
    which foreign judgments were recognised in England. Secondly, the Act
    was to be based upon and to follow with minimal departures the common
    law. Third, the Act was to state in statutory form the general principles
    upon which foreign judgments (to which the Act applied) would be recog-
    nised in English courts. Fourth, the Act, a draft of which was annexed
    to the Report, and which the eventual statute adopted with negligible
    variation, was prepared in the contemplation that bilateral Conventions
    would be entered into with foreign States, with a view to securing reciprocity
    of treatment. It is made clear that negotiations had taken place with the
    Belgian, French and German governments: draft Conventions had been
    prepared and are annexed to the Report: the Act was intended to operate
    upon and in aid of these Conventions.

    [The Convention with Germany was not, in fact, signed until 1960
    and was given effect to by Statutory Instrument 1961, No. 1199; but it
    followed closely the draft scheduled to the Report.]

    17

    Fifth, it is relevant to notice that the Committee included a number
    of persons of acknowledged competence, and indeed distinction, in the
    field of Private International Law, who must be taken to be familiar with
    established rules and decided cases.

    One of the rules, which they must be taken to be aware of, relates to
    the distinction made in English Private International Law between matters
    of substance and matters of procedure, and, within that, the classification of
    limitation as a matter of procedure. Classification of limitation as pro-
    cedural means that in proceedings in an English Court, English law, as the
    lex fori, will apply its domestic law as to limitation and will not apply
    foreign limitation provisions even if the foreign law is the proper law,
    unless, at least, they extinguish the right. This principle has been part of
    English law since, at any rate, Huber v. Steiner. I quote the well-known
    statement of principle by Tindal CJ.:

    " The distinction between that part of the law of the foreign country
    " where a personal contract is made, which is adopted, and that which
    " is not adopted by our English courts of law, is well known and
    " established ; namely, that so much of the law as affects the rights
    " and merit of the contract, all that relates ad litis decisionem, is adopted
    " from the foreign country ; so much of the law as affects the remedy
    " only, all that relates ad litis ordinationem, is taken from the lex fori
    " of that country where the action is brought." ((1835) 2 Bing N.C. 202).

    Huber v. Steiner was not itself a case involving a foreign judgment, but the
    question arises immediately whether the same principle applies. The answer
    to this can only be affirmative. If English law applies its own limitation
    provisions to a foreign obligation, even where there is evidence that action
    on that obligation would (or would not) be barred by the limitation provisions
    of the proper law of that obligation, it would seem inevitably to follow that
    English law should not recognise a foreign judgment to the same effect-
    more precisely should treat the foreign judgment as a decision as to the
    remedy procedurally available, or not available, in the foreign court and
    nothing more. Exactly that was in fact decided in 1869 by Harris v. Quine
    (L.R. 4 Q.B. 653). Cockburn C.J. treated the matter as concluded by Huber
    v. Steiner:

    " The law being as I have stated, there is no judgment of the Manx
    " court barring the present action, as there was no plea going to the
    " merits, according to the view which we are bound to take of the Manx
    " statute of limitations, and the issue which the Manx court decided in
    " favour of the defendant is not the same issue as is raised in the
    " present action ".

    Blackburn J.:

    " But it was said the plea, if amended according to the facts, would
    " show that the Manx court had determined the matter. . . . But ... all
    " that the Manx court decided was that, in the courts of the Isle of Man
    " the plaintiffs could not recover."

    We see here, in the judgment of Cockburn C.J., a reference to a plea
    going " to the merits ". This expression, whether related to pleas or to
    judgments, is a familiar one in English law: any practitioner would use it
    even if it is not always understood. It is used in many well known
    authorities—see Ricardo v. Garcias (1845) 12 Cl. & F. 368, 377, 389, 390;
    Godard v. Gray (1870) L.R. 6 Q.B., 150 and in writers of authority—see
    Foote (5th Ed.) p. 553 ; Dicey (3rd Ed.) p. 455 ; Story Commentaries, section
    576. See also American Law Institute (Restatement- Second) Conflict of
    Laws, section 110:

    " A judgment that is not on the merits will be recognised in other
    " states only as to issues actually decided."

    All of what was said in Harris v. Quine applies directly to the present case,
    and unless the Respondents can escape from the force of this authority, must
    conclude the appeal against them. They had, basically, two arguments.
    First they contended that Harris v. Quine was wrongly decided, or at least

    18

    that it stood alone and ought not to be followed. I regard this as a hopeless
    contention. It may be true that, as regards this subject matter, Harris v.
    Quine is the only English reported case where a foreign judgment and
    its recognition was involved. But as I have shown it represents a logical
    and inevitable consequence of Huber v. Steiner and other cases and is merely
    an application of a principle too firmly established to be now put in
    question. Harris v. Quine has been cited often enough in English and
    Commonwealth cases. See Casanova v. Meier (1885) 1 T.L.R. 213 ; Carvell
    v. Wallace (1873) 9 Nova Scotia Reports 165 ; Bondholders Securities Corpor-
    ation v. Manville
    [1933] 4 D.L.R. 699 ; Pedersen v. Young (1964) 110 C.L.R.
    162, sometimes, I must say, irrelevantly, but it has never been doubted.
    The principle is well recognised by Courts of authority in the U.S.A. Warner
    et al
    v. Buffalo Drydock Co. (1933) 67 Fed.R. (2d.) 540; Cert. den. 291
    U.S. 678 ; Western Coal and Mining Coy. v. Jones (1946) 164 A.L.R. 685
    (S.C. Cal.) and see the Restatement quoted above. As at the year 1933,
    then, Harris v. Quine was undoubtedly good law.

    Secondly, and more substantially, the Appellants say that Harris v. Quine
    is superseded by section 8(1) of the Act of 1933: this was in effect the view
    of the Court of Appeal.

    Before looking at the language of the subsection, it may be useful to
    consider what this contention involves. It involves the proposition that a
    well established principle of English law, namely, that to obtain recognition,
    a foreign judgment must be on the merits and not be based merely on a
    " procedural " provision of the lex fori, is swept away in favour of a new
    principle that a foreign judgment, on whatever grounds it proceeds, is
    conclusive for all purposes, so long at least as the same " cause of action "
    is involved, or the same facts. If one accepts that the presumption is against
    changes in the common law, and that this presumption is fortified in the
    present case by the Report of 1932, if one accepts moreover that the principle
    under consideration was perfectly well known and understood in 1932, it
    was to be expected that on this point the common law would only be
    changed by a clear and express provision. Yet what is relied upon is the
    word " conclusive " coupled with a reference to " cause of action ". I
    return to these words later: What, one could ask, could be the purpose of
    the change? Why should this Act make a judgment conclusive as to some-
    thing it never decided? Why, to take the present case, should a foreign
    judgment be conclusive on a matter whose proper law is English, and accepted
    as English by the foreign Court, when that foreign law itself does not destroy
    the right, but only limits the remedy it will grant? For English law to
    abolish the distinction between substance and procedure, or to classify
    limitation as substance, might be an intelligible objective, but short of this,
    and leaving the distinction and classification intact, to change the effect of a
    judgment is something that, at the least, requires explanation.

    Some suggestion was made that to extend the recognition of foreign judg-
    ments might be desired on grounds of reciprocity: but I cannot understand
    this. There was no evidence that foreign Courts grant or would grant the
    wider recognition argued for by the Respondents and in any case reciprocity
    was to be achieved by the proposed Conventions. There is nothing in this
    alleged principle—one of uncertain extent—which assists either way in the
    interpretation of the Act.

    I find then, so far, no intelligible reason for supposing the common law

    to be changed. But the Respondents say the words of the section are clear

    clear words must be given effect to—conclusive means conclusive and that
    is that. This, however, I cannot accept. In the first place one has to ask,
    " What is conclusive? ", the section says the " judgment "—so what is " the
    " judgment"? The Respondents say that the judgment is the dispositive—
    " the suit is dismissed ". If this is contained in a self-contained document, as
    in the English practice, one may not look beyond it. If in a comprehensive
    document, as in the German practice, only that part of it which states the
    disposition is the judgment, not the whole of the judgment showing what was
    decided or adjudicated upon. But there is no warrant for this limitation.

    19

    The Courts in this country, when faced with a foreign judgment, whether
    in favour of the plaintiff or the defendant, in English proceedings, invariably
    look at the whole matter: the order made: the reasons: the nature of the
    rival claims, resorting if necessary to extrinsic evidence to explain them and
    to expose the reality. They do not confine themselves to the fact of the
    record, or to the formal order. It must be remembered that at common law
    foreign judgments do not give rise to an estoppel by record. If relied on by
    a plaintiff in an English court, they are so as obligations, which the defendant
    ought to discharge: so the nature of the obligation must be made known
    and if necessary explained. If they are relied on by a defendant as a bar in
    English proceedings, the nature of the bar must be enquired into, from an
    inspection of the matter adjudicated upon. Harris v. Quine itself is an
    example of this. One can cite many passages of authority:

    " In general, in pleading a foreign judgment you produce it with the
    " proceedings to show it is a judgment between the same parties and on
    " the same matters ". (Ricardo v. Garcias u.s. p. 387

    per Lord Lyndhurst L.C.):

    " Every plea of a foreign judgment in bar ought to set forth so much
    " at least of the judgment as would show that it was final and conclusive
    " on the merits ". (ibid, per Bethell arg.)

    " No one contends that the judgment and proceedings should be set
    " out in full, but we should have such a description of them as would
    " enable us to know what was decided". (ibid p. 394 per Lord
    Brougham).

    So, in my opinion, to say that in a case such as the present the English Court
    must stop at the first line of the German judgment and ignore the rest is
    irrational and out of line with what the Courts do. And then " conclusive ":
    conclusive of or as to what? The Respondents say " conclusive that the
    " cause of action on which the foreign proceedings were brought no longer
    " exists ". But the subsection does not say this: the words " in all proceed-
    " ings founded on the same cause of action " merely describes the occasion
    on which the conclusiveness arises. There is nothing here-—and, I add in
    passing, nothing in Part I of the Act—to indicate that the conclusiveness is
    to extend, irrespective of what the judgment decided, to the whole of the
    cause of action. Why should we give to the judgment a greater force than
    it receives by the law of the country where it is given? Certainly the law of
    Germany does not say that the cause of action does not exist.

    In my opinion, therefore, an interpretation of both "judgment" and
    " conclusive " which would require Courts in this country to examine the
    judgment, see what it decided, and hold it conclusive as a judgment and for
    what it adjudicates, is both open on the language and is entirely consistent
    with the common law. To quote another leading authority : —

    " As to whatever it meant to decide, we must take it as conclusive ".
    Bernardi v. Motteux 1781 2 Doug. 575, 581 per Lord Mansfield.

    The Appellant finally relied strongly on the wording of section 8(3) of the
    1933 Act. I agree with my noble and learned friend Lord Simon of Glaisdale
    in the reasons he has given why this subsection is of no assistance and shall
    not repeat them in words of my own.

    In my opinion, if this case had arisen at any time between 1869 and 1933
    there could be no doubt how it would have been decided. I see no reason
    why the Act of 1933 should be understood as intending to bring about a
    different result. The language of section 8(1) does not so compel. The
    German judgment would be conclusive for what it decided and for nothing
    more. The Plaintiffs' claim has not been decided on the merits, and they
    should be allowed to pursue it. This being my conclusion on the second
    point, it is not necessary to decide the first. I prefer to reserve my opinion
    upon whether subsection (1) of section 8 applies to defendants' judgments.

    There remains finally the question of residual discretion, and I must say
    that the situation now existing is unfortunate. This House is called upon to

    20

    decide this matter before it knows how the German proceedings will finally
    terminate. It is not in a position effectively or with knowledge to exercise
    such discretion as the Courts ought to exercise. In my opinion, if a majority
    of your Lordships disagree with the legal position taken by the Court of
    Appeal, the appeal should be allowed. But I suggest that the present
    proceedings should be stayed, with liberty to apply after determination of
    the final appeal in Germany and that the matter then be brought afresh, if
    the Plaintiffs so desire, before the Master to decide whether they should be
    allowed to continue their action here. Obviously this House cannot now
    foresee all the contingencies. If the Respondents' appeal in Germany is
    allowed by the Federal Supreme Court and the matter is restored to where
    it was when this case was before the Court of Appeal, then, if your Lordships
    take a different view of the law from the Court of Appeal, there would
    appear to be—ceteris paribus—a strong case for allowing the Plaintiffs to
    continue with their action here. If, on the other hand, the Respondents'
    appeal in Germany is dismissed—so that the Plaintiffs in one way or another
    can proceed in Germany—then the conditions on which the Plaintiffs should
    (if at all) be allowed to sue the Defendants also in this country would require
    examination. I do not think that this House can at the present stage offer
    any useful guidance as to the manner in which that could be decided.

    Lord Diplock

    MY LORDS,

    If the effect of the interpretation given by the majority of this House to
    section 8(1) of the Foreign Judgments (Reciprocal Enforcement) Act, 1933,
    were confined to the United Kingdom, I should content myself with record-
    ing my respectful dissent and my agreement with the interpretation unani-
    mously placed upon it by the Court of Appeal. But the Act is designed to
    facilitate the reciprocal enforcement of the judgments of foreign courts in
    the United Kingdom and of the judgments of United Kingdom Courts in
    foreign states. It makes provisi