A Dutch bank deposited a quantity of gold in London before the start of the 1939-1945 war. In May 1940 the Netherlands were invaded and they became an enemy territory for the purposes of the 1939 Act. The Royal Netherlands Government, with the approval of the UK Government, exercised their powers from London and in May 1940 they issued a decree which purported to have the effect of transferring property, including the gold, to the Netherlands Government (the A.1 decree). In July 1940, the Board of Trade made a vesting order transferring the gold to the Custodian of Enemy Property. He sold it for andpound;2 million. In May 1950 the Netherlands Government made an order returning the property in the gold to the Bank. The Bank then claimed against the Custodian in conversion for the present value of the gold. Devlin J held that the A.1 decree was ineffective to transfer moveable property in this country.
Held:
Devlin J said: ‘I think it is convenient to begin by considering what is the general principle of our law with regard to foreign legislation affecting property within our territory. There is little doubt that it is the lex situs which as a general rule governs the transfer of movables when effected contractually. The maxim mobilia sequuntur personam is the exception rather than the rule, and is probably to be confined to certain special classes of general assignments such as marriage settlements and devolutions on death and bankruptcy. Upon this basis the A.1 decree, not being a part of English law, would not transfer the property in this case. But decrees of this character have received in the authorities rather different treatment. Although there is not, as far as I am aware, any authority which distinguishes general legislation, such as part of a civil code, from ad hoc decrees, the effectiveness of such decrees does not appear on the authorities to be determined exclusively by the application of the lex situs. Apart from two recent cases on which the plaintiffs greatly rely, there has been no case in which such a decree has been enforced in this country, but the grounds for refusing effect to them have been variously put. Sometimes it is said that the decree is confiscatory. In the textbooks it is said sometimes that as a matter of public international law no State ought to seek to exercise sovereignty over property outside its own territory, and therefore the principle of comity is against enforcement; and sometimes it is said that the principle of effectiveness is against enforcement, since no State can expect to make its laws effective in the territory of another State. Dicey, Conflict of Laws, 6th ed., p. 13, states: ‘A State’s authority, in the eyes of other States and the courts that represent them, is, speaking very generally, coincident with, and limited by, its power. It is territorial. It may legislate for, and give judgments affecting, things and persons within its territory. It has no authority to legislate for, or adjudicate upon, things or persons not within its territory.’
Denning LJ said: ‘In this connection I would observe that the test of being a servant does not rest nowadays on submission to orders. It depends on whether the person is part and parcel of the organisation.’
Judges:
Devlin J, Denning LJ
Citations:
[1953] 1 QB 248, [1951] 2 TLR 755, [1951] 2 All ER 779
Statutes:
Trading With The Enemy Act 1939
Cited by:
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Contracts of service or for services
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Held: The . .
Lists of cited by and citing cases may be incomplete.
Jurisdiction, Employment
Updated: 16 May 2022; Ref: scu.186123
