Case Facts
Four associated Burmah Oil companies — Burmah Oil Company (Burma Trading) Ltd, Burmah Oil Company (Burma Concessions) Ltd, Burmah Oil Company (Overseas) Ltd, and Burmah Oil Company (Pipe Lines) Ltd — each with registered offices in Glasgow, Scotland, brought separate actions against the Lord Advocate under the Crown Suits Act 1857. The actions were commenced in 1961, approximately nineteen years after the events giving rise to them.
In February 1942, during the Second World War, HM Government issued directives and the General Officer Commanding Burma issued instructions on 3 February 1942 to destroy oil installations and stocks throughout Burma in order to prevent them from falling into the hands of advancing Japanese forces. A specialist, Mr W L Forster, was dispatched from Britain by the Government to supervise the preparations for destruction.
General Sir Harold Alexander, as General Officer Commanding Army in Burma, ordered the destruction of the first company's property on 6 March 1942. The destruction was carried out on 7 March 1942, the day before Japanese forces occupied Rangoon on 8 March 1942. Orders for the destruction of the oilfields — comprising the second company's property at Yenangyaung, Singu, Palanyon and Minbu — were subsequently issued by General Alexander on 14 April 1942, with the demolitions carried out between 15 and 19 April 1942. The last British forces withdrew from Burma on 20 May 1942.
The property destroyed was extensive, including producing wells, buildings, plant, machinery, storage tanks, stores, floating craft, rolling stock, refineries, pipelines and pumping stations across multiple locations. It was admitted by both parties that the demolitions had been carried out lawfully.
The First Division of the Court of Session sustained the Lord Advocate's pleas that the appellants' averments were irrelevant and dismissed the actions. The appellants appealed to the House of Lords.
Held
The House of Lords, by a majority (Viscount Radcliffe and Lord Hodson dissenting on this point), held that the circumstances of the destruction gave the appellants a right to claim compensation from the Crown. There is no general rule that the royal prerogative can be exercised, even in time of war or imminent danger, by taking or destroying private property without making payment for it.
The House further held unanimously that the action was not barred by the Public Authorities Protection Act 1893.
The decision of the First Division of the Court of Session was reversed.
Parliament subsequently responded to the decision by enacting the War Damage Act 1965, which retrospectively extinguished any right to compensation for war damage to property destroyed by Crown forces, thereby nullifying the effect of the judgement.
Ratio Decidendi
The ratio of the case rests on a critical distinction between two categories of property destruction carried out under the royal prerogative in wartime. Taking or destroying property in the course of actually fighting the enemy — commonly described as battle damage — does not give rise to any right to compensation, as such destruction arises directly out of the military operations themselves. However, the deliberate, pre-planned demolition of private property, carried out not as an immediate consequence of combat but as a calculated measure to deny resources to the enemy, falls outside this exception.
In the present case, although Japanese forces were advancing, the demolitions were planned and executed as a deliberate act of policy on the instructions of HM Government and senior military command. They did not arise out of the military operations themselves in the sense required to constitute battle damage. Accordingly, the prerogative could not be exercised to destroy the appellants' property without an obligation to compensate.
The House applied A-G v De Keyser's Royal Hotel [1920] in support of the principle that the Crown's prerogative powers must be exercised consistently with the established legal position that subjects are entitled to compensation when their property is taken or destroyed for the public benefit. The unanimous rejection of the limitation defence under the Public Authorities Protection Act 1893 confirmed that no procedural bar prevented the appellants from pursuing their claims.
Obiter Dicta
The majority judgements contain broader observations regarding the scope of the royal prerogative in wartime. It was noted that the existence of a state of war or national emergency does not, of itself, confer upon the Crown an unlimited power to deprive subjects of their private property rights without compensation. The prerogative, although broad, is not unconfined, and courts retain the function of examining whether a particular exercise of it falls within its recognised boundaries.
It was further observed that the position as to compensation could be altered by Parliament, and Parliament duly exercised that power by passing the War Damage Act 1965 with retrospective effect — a response that itself generated significant constitutional commentary regarding the use of retroactive legislation to nullify a judicial decision in the subject's favour.