Tesco Supermarkets Ltd v Nattrass
For criminal offences requiring a state of mind, a company is identified only with those who represent its directing mind and will, not with a store manager.
Facts
A Tesco supermarket advertised washing powder at a reduced price. The shop assistant put full price packets on the shelves when the reduced price packets ran out, and the manager failed to check. A customer was charged the full price, and Tesco was prosecuted under the Trade Descriptions Act 1968. Tesco relied on the defence that the offence was due to the act or default of another person, the store manager, and that it had taken all reasonable precautions and exercised all due diligence.
Legal principle
The House of Lords held that Tesco was entitled to rely on the defence. Lord Reid said that a company can only be liable for an offence requiring a state of mind if the person who committed it was one of those who represent the directing mind and will of the company and control what it does, such as the board of directors, the managing director and perhaps other superior officers. The store manager was not part of Tesco's directing mind and will, so he was another person for the purposes of the defence, and Tesco had taken all reasonable precautions by having a proper system of supervision.
Related cases on corporate contracts, agency and attribution
- Bilta (UK) Ltd v Nazir (No 2) [2015] UKSC 23, [2016] AC 1
- Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
- Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
- Kelner v Baxter (1866) LR 2 CP 174
- Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705
- Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500
- Newborne v Sensolid (Great Britain) Ltd [1954] 1 QB 45
- Phonogram Ltd v Lane [1982] QB 938
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