NOKES V.

DONCASTER

Critique of opinions of LJ. Viscount, LJ. Atkins & LJ Romer

SUBJECT: INTERPRETATION OF S TATUTES

NATIONAL LAW UNIVERSITY, JODHPUR
(JULY-NOVEMBER 2018)

SUBMITTED BY: SUBMITTED TO:

YASH J OSHI (1492) PROF ADITYA RATHORE
FACULTY OF LAW
B.A. L.LB (HONS.)
NLU J ODHPUR
SEMESTER V

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 ACKNOWLEDGMENT

I take this opportunity to express my gratitude and personal regards to Prof. Aditya Rathore for
inspiring and guiding me during the course of project work.
We also owe a sincere thanks to the library staff of National Law University, Jodhpur for the
cooperation and facilities extended from time to time during the progress of our project work.

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 TABLE OF CONTENTS
Acknowledgment ....................................................................................................................... 2
Research question ...................................................................................................................... 4
Nokes v. Doncaster .................................................................................................................... 5
Brief Facts .......................................................................................................................... 5
Arguments raised ............................................................................................................... 5
Identification of the issue by the three justices. ................................................................. 6
Analysis of the Three Opinions ............................................................................................. 6
Lord Viscount .................................................................................................................... 6
Lord Atkins ........................................................................................................................ 8
Lord Romer ........................................................................................................................ 9
Conclusion ............................................................................................................................. 9

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 RESEARCH QUESTION

Analyze the opinions, with respect to application of rules of interpretation, given by Viscount
LJ, Lord Atkins and Lord Romer in Nokes v Doncaster Amalgamated Collieries (1940) AC
1014. Are the judges in fact applying the rules of interpretation that they claim to be applying?
Which opinion do you prefer the most and why?

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 NOKES V. DONCASTER

Brief Facts
In Nokes v. Doncaster1, the appellant was a coalminer in employment under Hickleton Main
Colliery Co. Ltd., and received wages as per his contract of service. The said company was
transferred to the respondent co in the present case along with all the property, rights, powers,
liabilities and duties of a number of colliery companies, including Mr. Nokes employer
company. This order was made under S. 154 of the Companies Act, 1929, which basically
provided for practical ease in case of transfer of company. Sections 153 and 154 together
provided that upon sale of one company to another, a company should be dissolved without
winding up and all its debts, rights, liabilities etc. be transferred to the transferee company.

Thereafter, the appellant continued to work unaware of the change in ownership of the
company as no notice was sent out. He absented himself on a particular day which would have
made him liable under Employers and Workmen Act, 1875, if he can be said to be under their
employment. This, however, he denied, but on a summons preferred against him under the Act of
1875, for unlawfully absenting himself from work, the justices adjudged that he should pay a penalty.

Arguments raised
The appellant argued that a contractual right to personal service was a personal right of the
employer and was incapable of being transferred by him to anyone else, and that a duty to serve
a specific master could not be part of the property or rights of that master capable of becoming,
by transfer, a duty to serve someone else.

The respondent made the case that the only transfers which the section can authorize are
transfers of the undertaking of one company to another, and that if the employer is a company,
the servant can have no direct contact with the artificial entity but of necessity deals with and
acts under the orders of the company’s agents. Moreover, the change involved in a wage earner
serving the new company in place of the old is, in normal cases, no greater than the change he
would experience when the company which he is serving throughout changes its directors, its
shareholders, its managers, its scope of operations, and its name, all of which it may do without
losing its identity.

1
Nokes v. Doncaster Amalgamated Collieries Ltd., [1940] AC 1014.

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Identification of the issue by the three justices.
The three justices had a general consensus on the issue involved in the case. In the first place
it was noted that there is fundamental principle of the common law – “the principle, namely,
that a free citizen, in the exercise of his freedom, is entitled to choose the employer whom he
promises to serve, so that the right to his services cannot be transferred from one employer to
another without his assent.”2

The court accepts that this principle is an ingrained part of the laws of the country. However,
thereafter the Judges brought themselves to the question as to whether section 154 of the act
provided a statutory exception to the same principle. Lord Romer notes at page 1037, that, “this
appeal raises a general question of difficulty and importance as to the construction of s. 154
of the Companies Act, 1929. It is the question whether the Court has power under this section
to transfer to or vest in the transferee company, therein mentioned, property and rights of a
transferor company which the latter company is itself incapable of assigning, or which it can
only assign with the consent of some third party whose consent to the transfer has not been
obtained.”3

Thus, it is sufficiently clear that the three justices had identified a more or less common
question of law.

ANALYSIS OF THE THREE OPINIONS

Lord Viscount
Lord Viscount begins his deliberation on the question at hand by setting out what he calls the
Golden Rule. He states, “ The golden rule is that the words of a statute must prima facie be
given their ordinary meaning.” He further goes on to warn that judges must, “not apply their
opinions of sound policy so as to modify the plain meaning of statutory words, but where, in
construing general words the meaning of which is not entirely plain there are adequate reasons
for doubting whether the Legislature could have been intending so wide an interpretation as
would disregard fundamental principles, then we may be justified in adopting a narrower
construction. At the same time, if the choice is between two interpretations, the narrower of
which would fail to achieve the manifest purpose of the legislation, we should avoid a
construction which would reduce the legislation to futility and should rather accept the bolder

2
Id, at pg. 1020
3
Id, at pg. 1037

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construction based on the view that Parliament would legislate only for the purpose of bringing
about an effective result.”4

Lord Viscount finds the issue in favor of the appellant. He points out that the case made by the
respondents will lead to an absurdity.5 For this reason he disagrees with the lower courts and
holds that the term ‘transfer’ in section 154 of the impugned act is not wide enough to include
transfers for which the transferor company would otherwise require consent from a third party.
As has already been mentioned above, Lord Viscount points that an interpretation at variance
with the ordinary meaning of the words can only be adopted if the plain interpretation would
reduce the legislation to a futility. As per him, the plain meaning of the words is not sufficient
to include the contracts of service and such an interpretation in his opinion also does not lead
to any absurdity. In the concluding paragraph he points out that the legislature could have in a
plainer manner and more explicit words included the contracts of service in the section.

The literal rule of interpretation provides that a section must be read in the plain and ordinary
meaning of words. Where, by the use of clear and unequivocal language capable of only one
meaning, anything is enacted by the legislature, it must be enforced however harsh or absurd
or contrary to common sense the result may be.6 Whereas, the golden rule stipulates that courts
can depart from the plain and ordinary meaning of the words if they seem art variance with the
intention of legislature ( to be collected from the statute itself ), or leads to any absurdity or
repugnancy. The modification shall be limited to overcoming this inconvenience and no more.7

It is clear that Lord Viscount gives prime position to the plain and ordinary meaning of the
words. However, at the same time he holds that words can be given wider meaning in order to
prevent the legislature from becoming futile i.e. upholding its purpose is the intention. So it
can be said that Lord Viscount is advocating the golden rule of interpretation, however in the
present matter his conclusion is that there is no absurdity created to give a wider meaning to
the words. Therefore, he sticks with the narrow interpretation. There is always a thin line
between the two rules as golden rule is a modification/extension of the literal rule. However, it

4
Id, at pg 1014.
5
Id , at page 1022, “If, for example, one of the companies to be amalgamated under the procedure of that section
has a long-term contract with an individual to be sole manager of its undertaking, what would happen when the
transfer takes place to a new and enlarged company?”
6
Shop and Store Developments Ltd. V. IRC, [1967] 1 AC 472, at pg 493.
7
Becke v. Smith, (1836) 2 M & W 191. At pg 195.

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is sufficiently clear from Lord Viscount’s reasoning that he is open to give a wider meaning to
words in order to fulfil the object of the statute.

Lord Atkins
The thrust of Lord Atkins reasoning is that we must get to the obvious intention of the
legislature. He accepts that the fundamental right of a person to not have his service transferred
from one person to another can be interfered with by the legislature.8 However, he is careful to
point out that the legislature must clearly express this intention in the words of the statute.
While quoting Maxwell, he points out that there is a presumption that, “… legislature does not
intend to make any substantial alteration beyond what it expressly declares or by clear
implication (or in other words beyond the scope and object of the statute).”9 This is indicative
of the fact that Lord Atkins is applying the purposive approach to interpretation. He is stressing
the importance of interpreting the words of the section in their context within the object of the
statute. Further, he points out that in order to interpret a section to mean that it is overturning
deep seated principles of common law it has to be done in clear, positive and definite
enactments.10 Lord Atkins compares the impugned section with the corresponding section of
the 1908 Act and concludes that the power given to the court under the two is the same and
that there is nothing to show that the word ‘transfer’ could be taken to mean transfer of contract
of service.

It is also interesting to note that Lord Atkins makes inquiries into the old law on the issue, then
considers the scenario that is under the present law in terms of what effect section 154 has on
the whole process of amalgamation. There may be a temptation to argue that Lord Atkins is
also employing the Mischief Rule in deciding the case. However, upon close examination one
must realise that is not the case. In the end Lord Atkins bases his judgment that transfer cannot
mean to include contract of service by saying that in the act there is no basis to claim that the
word transfer could have such a wide meaning. Moreover, he enquires solely into the purpose
behind the section by juxtaposing it with the old section. Lord Atkins does not ask the four
questions of the mischief rule in their. While he considers the change in the process brought
about by the section he does not consider it as the remedy that the statute intended to bring. He
concluded that there was nothing in the statute that could lead to the interpretation as argued
by the respondents.

8
Supra Note 1.
9
Supra note 1, at pg. 1031.
10
Id, at pg. 1033

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Lord Romer
Lord Romer begins his judgment by identifying the question as merely a question of whether
section 154 empowers the court to transfer non assignable contracts to the transferee company.
Lord Romer primarily concerns himself with the language of the section. After a detailed
description of the history of the section and the also considering the previous law and what
changes have been brought, Lord Romer identifies the question as whether the transfer
mentioned in section 154 includes contract of service as well.11 After turning his attention to
the section Lord Romer understands the section to mean to include transfer of contract of
service. This he holds because in the preceeding section’s sub section 4, also relates to
amalgamation and it includes property to mean property of every description.12 Furthermore,
he is of the belief that the wording of the section itself plainly means transfer of all kinds of
rights liabilities and properties.

This shows that Lord Romer’s judgment lacks clarity about what rule to apply in interpretation.
He obviously tries to give effect to plain and ordinary meaning of the words. However, he is at
the same time looking to aids outside the section in interpreting what he would call his plain
meaning of the section. Thus, his judgment is not consistent.

CONCLUSION
All the opinions that we have discussed applied different rules to interpret statutes. Lord
Romer’s approach was to give the most straightforward meaning to the words in order to get
to the legislature’s intention. However, as discussed above, his whole attempt was marred by
his own bias of what the transfer entailed given the reliance he placed on the history of the
section and factors external to the section.

I find it difficult to agree with Lord Atkins’ reasoning as well. Lord Atkins leans heavily
towards the purposive approach, and as per this approach he analyses the history of the section
and its need. However, he bases his final decision on the simple fact that contracts of service
were not explicitly mentioned in the section and refuses to expand on the word ‘transfer’. This
is inconsistent with his own rule of interpretation. Further, Lord Atkins does not explain why
the purposive approach should be preferred over a plain rule.

11
At pg. 1040.
12
1043

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Lord Viscount’s judgment is the most coherent of all. Lord Viscount clearly lays out his golden
rule of interpretation. One advantage of the said rule is that it does not interfere with a section
as long as it makes sense of itself. Such a rule limits the judiciary’s overreach and limits its
interference on basis of subjective policy considerations. Further, he also makes space for an
absurd situation as well as an ambiguous situation. In that regard he lays down when to depart
from the narrower construction of a statute. However, upon analyzing the provision he finds
no need to do so in the particular case.

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