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This appeal concerns the application of the Cancellation of Contracts made in a Consumers Home Regulations 2008 (the 2008 Regulations). The respondent, Mr Swift, owns a removal business. The appellant, Dr Robertson, telephoned him on 27 July 2011 to ask for a quotation for moving his furniture from Weybridge to Exmouth on 2 August 2011. Mr Swift visited his home the following day to inspect the items to be moved and while he was there the two men agreed a price of 7,595.40. Mr Swift then sent a removal acceptance document by email, which Dr Robertson signed and handed to Mr Swift on his second visit to the house that day to deliver packing materials. This document provided for charges in the event of cancellation of the contract less than 10 days before the removal was due to start. Dr Robertson paid a deposit of 1,000. Over the following days Dr Robertson made enquiries of other removal firms and found one which could undertake the work for 3,490. He telephoned Mr Swift to tell him he wished to cancel the contract, and sent him a letter giving notice of cancellation on 1 August 2011. He refused to pay the cancellation charges on the ground that he had been entitled to cancel the contract by virtue of the 2008 Regulations, and when Mr Swift issued proceedings, he denied liability and counterclaimed for the return of his deposit. Dr Robertsons submissions failed at trial, and on appeal in the Exeter County Court, but the Court of Appeal found that the 2008 Regulations did apply in the circumstances of his case. It held that they prevented Mr Swift from enforcing the contract against Dr Robertson. However, Dr Robertson had not been entitled to cancel the contract because Mr Swift had failed to give him the required notice of his right to cancel. The contract had remained alive and Dr Robertson could not therefore recover his deposit. Dr Robertson appealed against the dismissal of his counterclaim to the Supreme Court. The Supreme Court unanimously allows Dr Robertsons appeal. It holds that the 2008 Regulations give consumers the right to cancel contracts made in their homes before and for 7 days after notice of the right to cancel is served, and Dr Robertson was therefore entitled to exercise this right and to recover the deposit he had paid. Lord Kerr, with whom the other judges all agree, gives the only judgment. The 2008 Regulations gave effect to Council Directive (85/577/EEC) (the Directive). The Directive was designed to protect consumers against the risks inherent in the conclusion of contracts away from business premises. It requires traders to give consumers written notice of their right to cancel the contract at the time the contract is concluded and asks member states to ensure through national legislation that appropriate consumer protection measures are put in place for cases where this notice is not given [8 12]. The Court of Appeal was correct to conclude that the 2008 Regulations applied in the circumstances of this case, and that the contract was therefore unenforceable by Mr Swift, even though there had been two visits to Dr Robertsons home at his express invitation. It had been open to member states to adopt provisions that were more favourable to consumers than those required by the Directive [17 19]. The Court of Appeal had, however, erred when it found that Dr Robertson was not entitled to cancel the contract unless and until he had been served with notice of his right to cancel. The 2008 Regulations should be interpreted in the light of the wording and purpose of the Directive [20 22, 28]. The right to cancel contracts made at home was central to the protection afforded to consumers under the Directive and the requirement to give notice of the right to cancel was not a technical prerequisite to the exercise of the right [23 24]. To hold that it could be nullified by a failure or refusal of a trader to give written notice of the right to cancel to a consumer would run directly counter to the overall purpose of the Directive and create a considerable gap in the level of protection provided [25]. Accordingly the cancellation period referred to in Regulation 2 (1) should be interpreted to mean the period commencing from when the trader is required to give the consumer a written notice of his right to cancel pursuant to regulation 7(2) and expiring 7 days after receipt by the consumer of a notice of the right to cancel [32]. On this basis Dr Robertson was within the cancellation period provided by the 2008 Regulations when he sent his letter of 1 August 2011 and he was entitled to recover his deposit [34]. |
This test case raises a question about the jurisdictional boundary between the specialist tax tribunal and the ordinary courts, as well as an underlying issue as to the approach taken by the Revenue to enquire into a claim for loss relief made as part of a tax avoidance scheme used by some 200 taxpayers [1]. On 31 October 2008, Maurice David Cotter filed a tax return for the 2007/08 year of assessment. He made no claim for loss relief in the return, and let the Revenue calculate his tax for that tax year. This resulted in a calculation of income and capital gains tax of 211,927.77 [2]. In January 2009, Mr Cotters accountants wrote to the Revenue enclosing a provisional 2007/08 loss relief claim and amendments to his 2007/08 return. These added various entries to boxes in the return intimating that Mr Cotter had sustained an employment related loss of 710,000 in the tax year 2008/09 for which he claimed relief in tax year 2007/08 under the Income Tax Act 2007 [3 4]. He acknowledged that his interpretation of the applicable tax law might not accord with that of the Revenue and stated, for these reasons I assume you will open an enquiry [5]. His accountants then sent a copy of the loss relief claim to a Revenue recovery office, stating: As a result of this claim no further 2007/08 taxes will be payable by Mr Cotter [6]. The Revenue wrote to Mr Cotters accountants to confirm that the tax return had been amended and that enquiries would be opened into the claim and the tax return. It indicated that it did not intend to give effect to any credit for the loss until those enquires were complete. On the same day, it issued a fresh tax calculation of 211,927.77. The Revenue then wrote to Mr Cotter intimating that it was enquiring into the amendment and the loss claim under Schedule 1A to the Taxes Management Act (TMA). His accountants informed the recovery office that they had asked the Revenue to amend the self assessment calculation [7]. They asserted that (i) no further taxes were payable for 2007/08 because of the loss claim which was the subject of enquiry and (ii) that if tax were due as a result of an enquiry under section 9A TMA, it was not payable until the enquiry had been completed. Meanwhile, advisors acting for Mr Cotter wrote to the Revenue arguing that legal proceedings against him would be unlawful because his self assessment showed that no tax was payable as at 31 January 2009, and the Revenue had not amended his self assessment return [8]. On 22 June 2009, the Revenue issued proceedings in the county court seeking recovery of 203,243, namely the income and capital gains tax for 2007/08 and the first payment of account for 2008/09. Mr Cotter argued that he was entitled to use his loss claim to reduce to nil the tax otherwise payable for 2007/08 and that the First tier Tribunal (Tax Chamber) had exclusive jurisdiction to determine whether that was the case [9]. The proceedings were transferred to the High Court (Chancery Division) and on 14 April 2011 David Richards J held that the court had jurisdiction and that Mr Cotter was not entitled to rely on his claim for loss relief as a defence to the Revenues claim [10]. This was overturned in the Court of Appeal. Lady Justice Arden (with whom Lords Justices Richards and Patten agreed) held that if the Revenue wished to dispute an item contained in a tax return it had to follow the procedure set out in section 9A TMA, which would have given Mr Cotter a right to appeal to the tribunal [11]. The Supreme Court unanimously allows the Revenues appeal, restoring the relevant provisions of the High Courts order [35]. The central question is whether the Revenue was correct to have carried out its enquiry under Schedule 1A to TMA (allowing postponement of relief until completion of the enquiry), or whether any enquiry ought to have been made under section 9A (with effect given to the claim meantime). Section 9A allows an officer to enquire into anything contained in the return, or required to be contained in the return, including any claim or election included in the return [19]. Part of the appeal therefore involved a consideration of the meaning of a return in the relevant legislation. Delivering the Courts judgment, Lord Hodge provides guidance as to how the system works [33 36]. In summary, where a taxpayer makes a claim for relief in a tax return form which is, on its face, relevant to that particular year of assessment, or where he chooses to calculate the amount payable and allows for the relief in his calculation, the Revenue may correct the tax return if it disagrees with the claim for relief. If the taxpayer rejects the amendment, the Revenue may institute a section 9A enquiry. Upon the closure of that enquiry, the taxpayer will have a right of appeal to the tribunal. In the meantime, effect is given to the loss relief claim [27; 34]. If, by contrast, the taxpayer chooses to let the Revenue calculate his tax but includes a claim for relief in a tax return form which is clearly not relevant to the calculation of tax for that particular year of assessment, the Revenue may ignore the claim in its calculation. In other words, it may treat the claim as made otherwise than in a return, and Schedule 1A TMA shall apply. The Court considers that, in the present context, a return refers to the information in the tax return form which is submitted for for the purpose of establishing the amounts in which a person is chargeable to income tax and capital gains tax for the relevant year of assessment and the amount payable by him by way of income tax for that year (section 8(1) TMA) [24 25; 35]. Lord Hodge notes that whilst treating everything on the tax return form as the tax return is attractive in its simplicity, it would expose the Revenue to irrelevant claims made in the form which have no merit and which serve only to postpone the payment of tax due [20 21]. Having concluded, correctly, that the claim in respect of losses incurred in 2008/09 did not alter the tax chargeable or payable in relation to 2007/08, the Revenue was entitled indeed obliged to use Schedule 1A as the vehicle for its enquiry (section 42(11)(a) TMA) [26]. The county court and the High Court had jurisdiction in this case as it was not an appeal against an assessment to tax in respect of a particular year of assessment (the exclusive jurisdiction of the tribunal [29]) but a question of whether a claim for relief for losses incurred in 2008/09, which the taxpayer had made in his tax return form for 2007/08, constituted a defence to the Revenues claim for immediate payment of the tax it had calculated as payable in respect of 2007/08 [29 32]. |
This appeal concerns the imposition of two types of indeterminate sentences of imprisonment. The first is a sentence of life imprisonment, under which a prisoner is entitled to be considered by the Parole Board for release on licence once he has served a fixed term of imprisonment specified by the sentencing judge. The second is a sentence of imprisonment for public protection (IPP) which a judge can impose on a defendant convicted of a serious offence pursuant to s 225 Criminal Justice Act 2003 (as amended), where he finds that there is a significant risk that the defendant will commit further offences that will cause serious harm to members of the public. Again, the sentencing judge will specify a minimum term to be served before the prisoner will be entitled to be considered by the Parole Board for release on licence. The test applied by the Parole Board is the same in the case of both sentences. It must be satisfied that it is no longer necessary for the protection of the public that the prisoner be confined. Mr Smith has numerous convictions for robbery related offences. On 24 January 2000 he received a mandatory sentence of life imprisonment upon further such convictions, with a minimum term of four years. He satisfied the Parole Board that he should be released on 25 September 2004 but was arrested in 2008 on suspicion of having committed eight armed robberies between 2006 and 2007. His arrest resulted in his recall to prison under his life sentence for breach of his licence conditions. He pleaded guilty to the offences and was sentenced on 10 October 2008 to a sentence of IPP with a minimum term to be served of six years. Mr Smith appealed against the imposition of the sentence of IPP on two alternative grounds. The first was that it was unlawful because the judge could not have been satisfied for the purposes of s 225 that he represented a significant risk to the public, given that he had been recalled to prison under his life sentence and would have to satisfy the requirements of the Parole Board before he could be released. The second was that the judge should not have exercised his discretion under s 225 to impose the sentence of IPP when it would achieve no additional benefit. The Supreme Court unanimously dismisses the appeal. It holds that the imposition of the sentence of IPP on Mr Smith was both lawful and open to the sentencing judge in the exercise of his discretion. Lord Phillips gives the judgment of the court. On the lawfulness issue, the wording of s 225(1)(b) is in the present tense and requires the sentencing judge to impose a sentence of IPP if there is a significant risk of harm to the public. It would place an unrealistic burden on the judge to require him to form a view of the position at the end of the minimum term of imprisonment. It is implicit that the risk must be assessed on the premise that the defendant is at large at the moment the sentence is passed [15]. On the exercise of discretion, although it was not sensible to impose a sentence of IPP in circumstances where it will achieve no benefit, in this case it enabled the sentencing court on the most recent occasion to express its finding that Mr Smith did in fact satisfy the dangerousness provisions of the Criminal Justice Act 2003. Given that the Parole Board had earlier released him on the basis that he did not pose a risk of serious harm to the public, the judge could not be criticised for imposing a sentence that demonstrated that the contrary was the case [19]. |
The appellant was employed as a home carer by the respondents. Her work involved visiting clients in their homes and providing personal care. On 18 December 2010, at around 8pm, she was required to visit an elderly lady. There had been severe wintry conditions in central Scotland for several weeks, with snow and ice lying on the ground. The appellant was driven to the house by a colleague, who parked her car close to a public footpath leading to the house. The footpath was on a slope, and was covered with fresh snow overlying ice. It had not been gritted or salted. The appellant was wearing flat boots with ridged soles. After taking a few steps, she slipped and fell, injuring her wrist. The Lord Ordinary, relying on expert evidence, found the respondents liable for the appellants injury on the basis that they did not provide her with protective footwear. The Lord Ordinarys decision was reversed by an Extra Division of the Inner House. The appellants appeal to the Supreme Court concerned the admissibility of evidence given by the expert witness, and whether the respondents had been in breach of their statutory duties or negligent. The Supreme Court unanimously allows Ms Kennedys appeal. Lord Reed and Lord Hodge (with whom Lady Hale, Lord Wilson and Lord Toulson agree) give the judgment of the court. Lord Reed and Lord Hodge provide guidance on the evidence of skilled witnesses under Scots law, addressing (i) admissibility [39 56]; (ii) the responsibilities of a partys legal team [57]; (iii) the courts policing of the performance of the experts duties [58 59]; and (iv) economy in litigation [60 61]. In the present case, the expert witness had experience and qualifications in health and safety [9]. His evidence on factual matters was relevant and admissible. He had the necessary experience and qualifications to explain how anti slip attachments reduced the risk of slipping [62 63]. His evidence on health and safety practice was relevant [64]. Whilst some of his statements might appear to be inadmissible expressions of opinion on the respondents legal duties, an experienced judge could treat the statements as opinions as to health and safety practice, and make up his own mind on the legal questions [66]. The witnesss evidence provided a basis for the Lord Ordinary to determine whether the defenders had suitably and sufficiently evaluated the risks and identified the measures needed to protect health and safety [67]. The statutory case was based first on the Management of Health and Safety at Work Regulations 1999 (the Management Regulations), which implement Directive 89/391/EEC (the Framework Directive), and under regulation 3(1) require a suitable and sufficient risk assessment to be carried out [85 89], and secondly on the Personal Protective Equipment at Work Regulations 1992 (the PPE Regulations), which implement Directive 89/656/EEC (the PPE Directive), and under regulation 4(1) require suitable personal protective equipment to be provided to employees who may be exposed to a risk to their health or safety while at work except to the extent that such risk has been adequately controlled by other means which are equally or more effective [93 97]. The most logical way to approach the issues was through a consideration of the suitability and sufficiency of the risk assessment [89]. The appellant was exposed to a risk of slipping and falling on snow and ice which was obvious and was within the knowledge of the respondents, who had previous experience of home carers suffering such accidents each year. The risk had been identified in a 2005 assessment, and risks of that general nature were also identified in a 2010 assessment [90]. No consideration had been given to the possibility of personal protective equipment. The precautions taken, in the form of advice to wear appropriate footwear, did not specify what might be appropriate. The Lord Ordinary was entitled to conclude that there had been a breach of regulation 3(1) of the Management Regulations [92]. The appellant was at work whilst she was travelling between the home of one client and that of another in order to provide them with care. Contrary to the view of the Extra Division, the words while at work in regulation 4(1) of the PPE Regulations, and whilst they are at work in regulation 3(1) of the Management Regulations, mean that the employee must be exposed to the risk during the time when she is at work. They do not refer to the cause of the risk [100]. The Directives encompass not only risks arising specifically from the nature of the activities which the worker carries out, but also risks arising from the natural environment to which the worker is exposed whilst at work [102]. The Lord Ordinary found that anti slip attachments were available which would have been suitable to reduce the risk of home carers slipping and falling on ice, and that the risk was not adequately controlled by other means which were equally or more effective. He was therefore entitled to conclude that there had been a breach of regulation 4(1) of the PPE Regulations [106]. In relation to the common law case, it was a mistake to view the appellant as being in the same position as an ordinary member of the public. She was required to visit clients in their homes in hazardous weather conditions, whether or not the roads and footpaths in question had been treated. Her employers were able (and obliged by statute) to consider the risks to her safety and the means by which those risks could be reduced [108]. A reasonably prudent employer would conduct a risk assessment so as to take suitable precautions to avoid injury to its employees. The duty to carry out a risk assessment was logically anterior to determining what precautions a reasonable employer would take to fulfil its common law duty of care [110]. The respondents were aware of a history of accidents each year and were aware that the consequences were potentially serious. Those circumstances were sufficient to require an employer taking reasonable care for the safety of its employees to inquire into possible means of reducing the risk. Upon such inquiry, or the carrying out of a proper risk assessment, on the evidence accepted by the Lord Ordinary the respondents would have learnt that attachments were available at a modest cost to reduce the risk, and had been used by other employers in a similar position. The Lord Ordinary was entitled to conclude that the respondents were negligent in failing to provide the appellant with such attachments [112 113]. The Lord Ordinary made no express findings as to causation, other than that the appellant would have used attachments if they had been provided. The concept of suitability, under regulation 4(1) of the PPE Regulations, contained a causal component: the equipment must adequately control the risk so far as was practicable. A risk would not be adequately controlled unless injury was highly unlikely [118]. In the circumstances, it was reasonable to infer that the failure to provide the anti slip attachments caused or materially contributed to the accident [119]. |
Parliament has conferred statutory rights on employees, including through legislation giving effect to EU law. Most employment rights can only be enforced in employment tribunals (ETs) and the employment appeal tribunal (EAT). Until the coming into force of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, SI 2013/1893 (the Fees Order) on 29 July 2013, a claimant could bring and pursue proceedings in an ET and appeal to the EAT without paying any fees. The stated aims of the Fees Order were to transfer part of the cost burden of the tribunals from taxpayers to users of their services, to deter unmeritorious claims, and to encourage earlier settlement. The Fees Order requires an issue fee to be paid when a claim form is presented to an ET, and a hearing fee prior to the hearing of the claim. The amounts depend on whether the claim is brought by a single claimant or a group, and whether the claim is classified as type A or type B. Type A claims are specified, and generally require little or no pre hearing work and very short hearings. All other claims are type B, including unfair dismissal, equal pay and discrimination claims. For a single claimant, the fees total 390 for a type A claim and 1200 for a type B claim. In the EAT fees are also payable in two stages, but without distinction between different types of appeal, or between single and group appellants. The Fees Order also makes provision for the full or partial remission of fees if a claimants disposable capital, together with their partners, is below a specified amount (in most cases, 3,000). The amount of remission depends on the claimants gross monthly income, together with their partners, and the number of children they have. A fee may also be remitted if the Lord Chancellor is satisfied that there are exceptional circumstances. A claim or appeal must be rejected unless it is accompanied by a fee or a remission application. This appeal arises out of proceedings for judicial review in which the trade union UNISON (the appellant) argued that the making of the Fees Order was not a lawful exercise of the Lord Chancellors statutory powers, because the prescribed fees interfere unjustifiably with the right of access to justice under both the common law and EU law, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups. The Supreme Court unanimously allows the appeal. Lord Reed gives the lead judgment, with which the rest of the Court agrees, dealing with all issues except for discrimination. Lady Hale gives judgment on the discrimination issue, with which the rest of the Court agrees. The Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice. Since it had that effect as soon as it was made, it was therefore unlawful and must be quashed. The constitutional right of access to the courts is inherent in the rule of law: it is needed to ensure that the laws created by Parliament and the courts are applied and enforced. Tribunals are more than merely the providers of a service which is only of value to those who bring claims before them [65 85]. As a matter of domestic law, the Fees Order is unlawful if there is a real risk that persons will effectively be prevented from having access to justice, or if the degree of intrusion into access to justice is greater than is justified by the purposes of the Fees Order [86 89]. While court fees for small claims are related to the value of the claim, the ET and EAT fees bear no direct relation to the amount sought and can therefore be expected to act as a deterrent to claims for modest amounts or non monetary remedies (which together form the majority of ET claims). The recoverability of costs upon success cannot be decisive of the question of access to justice as that right is not restricted to the ability to bring successful claims [20 37]. Indeed the evidence before the Court shows that the effect of the Fees Order was a dramatic and persistent fall in the number of claims brought in ETs, with a greater fall in the number of lower value claims and claims in which a financial remedy was not sought. Fees were the most frequently cited reason for not submitting a claim. Worked examples of the impact of fees on hypothetical claimants indicated that in order to meet the fees they would have to restrict expenditure that was ordinary and reasonable for maintaining living standards [38 55]. The question of whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees must be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by forgoing an acceptable standard of living, the fees cannot be regarded as affordable. Even where fees are affordable, they prevent access to justice where they render it futile or irrational to bring a claim, for example where in claims for modest or no financial awards no sensible claimant will bring a claim unless he can be virtually certain he will succeed, that the award will include recovery of fees, and that the award will be satisfied in full [90 98]. Further, although the stated purposes of the Fees Order are legitimate aims, it has not been shown that the Fees Order was the least intrusive means of achieving those aims [99 103]. The Fees Order is also unlawful because it contravenes the EU law guarantee of an effective remedy before a tribunal: it imposes disproportionate limitations on the enforcement of EU employment rights [105 117]. The Fees Order is indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage, because a higher proportion of women bring type B than bring type A claims. The charging of higher fees was not a proportionate means of achieving the stated aims of the Fees Order. It had not been shown to be more effective at transferring the cost of the service from taxpayers to users, and in some type B cases (such as pregnancy dismissal) the higher fee did not correspond to a greater workload placed on the tribunal. Further, meritorious as well as unmeritorious claims might be deterred by the higher price, and there was no correlation between the higher fee and the merits of the case or incentives to settle [121 134]. |
In October 2014, PST Energy 7 Shipping LLC and Product Shipping and Trading S.A., the owners and managers of the vessel Res Cogitans, (collectively, the Owners) ordered a quantity of marine fuel, (the bunkers) from OW Bunker Malta Ltd (OWB). The contract between OWB and the Owners provided for payment 60 days after delivery and included a clause under which property was not to pass to the Owners until payment for the bunkers had been made. It also entitled the Owners to use the bunkers for the propulsion of Res Cogitans from the moment of delivery. OWB obtained the bunkers from its parent company, OW Bunker & Trading A/S (OWBAS). OWBAS obtained the bunkers from Rosneft Marines (UK) Ltd (RMUK), which obtained them from RN Bunker Ltd (RNB). In November 2014 OWBAS announced that it was applying to the Danish courts for restructuring and subsequently became insolvent. ING Bank NV (ING) became the assignee of OWBs rights against the Owners. The Owners consumed all of the bunkers in the vessels propulsion, without making payment to OWB, which did not make payment to OWBAS, which in turn did not make payment to RMUK. RMUK paid RNB and demanded payment from the Owners, asserting that it remained the owner of the bunkers. The Owners commenced arbitration against OWB and ING, seeking a declaration that they were not bound to pay for the bunkers, or damages for breach of contract, on the grounds that OWB had been unable to pass title to them, owing to the application of section 2(1) and s.49 of the Sale of Goods Act 1979 (SoGA). The arbitrators determined that OWB did not undertake to transfer property in the bunkers to the Owners under the Contract and that the Owners therefore remained liable to pay OWB/ING. Males J agreed and the Court of Appeal dismissed a further appeal by the Owners. The Supreme Court unanimously dismisses the appeal by the Owners, PST Energy. Lord Mance gives the only judgment, with which the other Justices agree. There are three issues before the Supreme Court: (1) Was the contract a contract of sale within the meaning of section 2(1) of SoGA? (2) If not, was it subject to any implied term that OWB would perform or had performed its obligations to its supplier, in particular by paying for the bunkers timeously? (3) Should the Court of Appeal decision F G Wilson (Engineering) Ltd v John Holt & Co (Ltd) [2014] 1 WLR 2365 (known as Caterpillar) be overruled? [22, 24] Was the contract a contract of sale under section 2(1) the Sale of Goods Act 1979? section 2(1) of SoGA defines a contract of sale of goods as one by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price. OWB argues that this was a contract of sale within that definition. But bunker suppliers know that bunkers are for use prior to payment [27]. OWBs contract with the Owners therefore cannot be regarded as a straightforward agreement to transfer the property in the bunkers to the Owners for a price under section 2(1). It was a sui generis (unique) agreement, with two aspects: first, to permit consumption prior to any payment and without any property ever passing in the bunkers consumed; and second, if and so far as bunkers remained unconsumed, to transfer the property in the bunkers remaining to the Owners in return for the Owners paying the price for all of the bunkers, whether consumed before or remaining at the time of payment [28, 34]. Even if the contract were to be analysed as a contract of sale, in that it contemplated the transfer of property in any bunkers unused at the date of payment, OWB could not owe any obligation to transfer property in bunkers consumed before payment. It would cease to be a contract of sale if and when all such bunkers were consumed before payment [36 37]. Was there an implied term that OWB would pay timeously? In consequence of his conclusion at [28] Lord Mance finds that OWBs only implied undertaking as regards the bunkers which it permitted to be used, and which were used by the Owners in propulsion prior to payment, was that OWB had the legal entitlement to give such permission [39, 59]. Should Caterpillar be overruled? The Court of Appeal held in Caterpillar that where goods are delivered under a contract of sale but title is reserved pending payment of the price, the seller cannot enforce payment of the price by an action [42]. section 49(1) of SoGA enables an action for the price where the seller has transferred property, with or without delivery, and the buyer has failed to pay the price due [44]. Lord Mance considers that section 49(2) reflects an established common law exception to the rule in section 49(1) [45]. The question of principle is whether section 49 excludes any claim to recovery of a price outside its express terms. section 49(2) relaxes only partially the strictness of section 49(1). The 1893 Act which introduced the wording now found in section 49(2) reflected the common law in an era when freedom of contract and trade were axiomatically accepted as beneficial. Therefore a court should be cautious about recognising claims to the price of goods in cases not falling within section 49 but this leaves at least some room for claims for the price in other circumstances [53]. For instance, the price may be recovered in respect of goods undelivered which remain the sellers property but are at the buyers risk and are destroyed by perils of the seas or by fire. The present situation is an even stronger example [57]. Lord Mance declined to set the precise limits for the circumstances in which the price may be recoverable outside section 49. Had the contract between OWB and the Owners been one of sale, Lord Mance would have held, over ruling the Caterpillar case on this point, that section 49 is not a complete code of situations in which the price may be recoverable under a contract of sale. In the present case the price was recoverable by virtue of its express terms in the event which has occurred, namely the complete consumption of the bunkers supplied [58, 60]. |
Ahava was a shop in Covent Garden, London, which mainly sold beauty products processed from Dead Sea mineral materials. The products were factory produced by an Israeli company, in an Israeli settlement located in the West Bank and therefore within the Occupied Palestinian Territory (OPT). It was said that the factory was staffed by Israeli citizens encouraged by the Government of Israel to settle there. Mr Richardson and Ms Wilkinson (the Defendants) sought to disrupt the activities of Ahava. On 2 October 2010 they entered the shop (together with other helpers) carrying a concrete tube. They connected their arms through the tube anchored by a chain, secured by a padlock to which they claimed to have no key. They were asked to leave the shop by an Ahava employee, but failed to do so. The employee called the police and, after some time, closed the shop. Tools were used to release the Defendants from the tube. On their release, they were arrested for aggravated trespass contrary to section 68 Criminal Justice and Public Order Act 1994 (the 1994 Act). That offence criminalises the conduct of a person A who (i) trespasses on land, (ii) where there is a person or persons B lawfully on the land who is engaged in or about to engage in a lawful activity, (iii) and A does an act on the land, (iv) intended by A to intimidate all or some Bs from engaging in that activity, or to obstruct or disrupt that activity. In the magistrates court, the Defendants contested the charge on point (ii). They argued that Ahavas activities were not lawful since they involved the commission of one or more of four criminal offences. Firstly, they said that Ahava was guilty of aiding and abetting the transfer by Israeli authorities of Israeli citizens to the OPT, a territory under belligerent occupation. This was argued to be contrary to Article 49 of the Fourth Geneva Convention 1949, which constituted a war crime. Ahavas actions in aiding and abetting the transfer, if true, would constitute an offence under sections 51 52 of the International Criminal Court Act 2001 (the war crimes offence). Secondly, they said that since Ahava was aiding and abetting a war crime, Ahava must know or suspect that the products sold in the shop were the products of that offence. Ahava was therefore, they argued, guilty of the offence of using or possessing criminal property (the criminal property offence). Thirdly, they argued that the products had been imported into the UK purportedly under the EC Israeli Association Agreement, which conferred tax or excise advantages. However, since the Court of Justice of the European Union has ruled that products originating in the OPT do not fall under this Agreement, they asserted that Ahava was guilty of the offence of cheating the revenue (the revenue offence). Fourthly, they emphasised that the products sold were labelled Made by Dead Sea Laboratories Ltd, Dead Sea, Israel. The OPT is not recognised as part of Israel. Therefore, they argued, Ahava was guilty of labelling offences under the Consumer Protection from Unfair Trading Regulations 2008 and the Cosmetic Products (Safety) Regulations 2008 (the labelling offences). The district judge in the magistrates court convicted the Defendants. They appealed, on the grounds above, to the Divisional Court. The Divisional Court upheld the conviction, but certified as a matter of general public importance the question whether the words lawful activity in section 68 of the 1994 Act should be limited to acts or events integral to the activities at the premises in question. The Supreme Court unanimously dismisses the appeal. An activity is unlawful for the purposes of section 68 only if it involves a criminal offence integral to the core activity carried on, not when any criminality is only incidental, collateral to, or remote from the activity. Applying that to the facts of this case, none of the offences alleged by the Defendants are integral to Ahavas activities. The judgment of the Court is given by Lord Hughes. The effect of section 68 of the 1994 Act is to add the sanction of the criminal law to particular acts which already constitute the civil wrong of trespass. It is not specifically aimed at individuals wishing to protest, and is to be construed in accordance with the normal rules of statutes creating criminal offences [2 4]. In order to argue that an activity is not lawful, the Defendant has to show a specific criminal offence against the law of England and Wales, which is properly raised on the evidence before the court. Once that evidential burden has been satisfied, the burden of proof lies on the Crown to disprove that offence to the criminal standard [9]. The Defendants had accepted that a merely collateral offence would not suffice to prove the defence. They argued that the activity could be defined as the particular feature of Bs acts against which A was protesting or objecting: if that particular feature was unlawful, this would suffice for section 68. This, however, turns the section upside down. To apply the section, it is necessary first to consider what Bs lawful activity is, and then to ask whether that is the activity which A intends to disrupt. The Defendants argument involves considering As motive, rather than As intent: A intends to disrupt the whole activity [12]. The true purpose of section 68 is to add the sanction of the criminal law to a trespass where A disrupts an activity that B is entitled to pursue. The no lawful activity defence must therefore apply when the criminal offence is integral to the core activity carried on, not merely incidental or collateral to that activity [13]. However, if a criminal offence integral to the core activity is raised, the court must consider that question even if it involves assessing extraneous facts, or the conduct of third parties [14 15]. Applying those principles to this case, none of the offences raised by the Defendants are made out. The war crimes offence: The only evidence raised by the Defendants was that a different company (the manufacturing company) had employed Israeli citizens at a West Bank factory and that the local community, which held a minority shareholding in that manufacturing company, had advertised the settlement to prospective settlers. It is very doubtful that the manufacturing companys actions could amount to aiding and abetting the transfer of Israeli citizens to the OPT, but even if it did, this could not amount to an offence by Ahavas retailing arm. Moreover, any such assistance is not an integral part of the activity carried out by Ahava, which was retail selling [17]. The criminal property offence: If, for the reasons above, there is no aiding and abetting of any unlawful movement of population, the products cannot be the products of a criminal offence. In any event, the criminal property offence cannot be said to be integral to the activity of selling [18]. The revenue offence: This is a purely collateral offence. Even if proven, the importer is only liable to repay to the Revenue duty which should have been paid [19]. The labelling offences: These are the principal offences relied on. The first Regulation criminalises misleading commercial practices, including labelling. However, it is necessary to show that, as a result of the misleading labelling, the average consumer would buy something that he/she otherwise would not have done. In this case the district judge had found that a consumer willing to buy Israeli products would be very unlikely not to buy Israeli products because they were produced in the OPT. Therefore, the offence could not have been committed [20 22]. The second Regulation criminalises the supply of cosmetic products which do not state (among other things) the country of origin. The aim of this is clearly to protect consumers, and stating that the products derive from the Dead Sea is sufficient: the Regulation is not aimed to reflect disputed questions of territoriality. Even if an offence had been shown, it would not have been integral to the sale activity [23]. |
The Serious Organised Crime Agency (SOCA) obtained an order under Part 5 of the Proceeds of Crime Act 2002 (POCA) for the recovery of property to the value of 2m from the appellants. The order was made on the basis that the court was satisfied pursuant to section 241(3) of POCA on the balance of probabilities (the civil standard of proof) that the property was derived from criminal activity in the form of drug trafficking, money laundering and tax evasion, offences for which the appellants had not been convicted. Mr Gale had been acquitted of drug trafficking in Portugal and criminal proceedings in Spain against him were discontinued. The appellants argued that the application of the civil standard of proof, rather than the criminal standard of beyond reasonable doubt, breached their right to a fair trial under article 6 of the European Convention on Human Rights. They asked the court either to interpret s 241 to require the application of the criminal standard of proof, or to make a declaration of incompatibility pursuant to section 4 of the Human Rights Act 1998. The judge, Griffith Williams J, refused to do so and the appellants appeal to the Court of Appeal on this issue was dismissed. The appellants also objected to the making of an order under section 246 of POCA that they should bear the costs of the report made by the Interim Receiver appointed by the court in connection with the recovery proceedings against them. The High Court had refused to make such an order, but this decision was reversed by the Court of Appeal. The Supreme Court unanimously dismisses the appeal on the article 6 and the costs issues. Lord Phillips gives the main judgment on the first issue and Lord Clarke on the second. Lord Brown and Lord Dyson add concurring judgments on the first issue. The article 6 issue The appellants case was that an essential stepping stone towards proving that the relevant property was the product of crime was proof that the appellants were guilty of criminal conduct. In these circumstances it was argued that they were entitled to the presumption of innocence afforded by article 6(2), and that rebutting this required proof of guilt to the criminal standard. Further, it was said that no adverse finding could be made which implicated the first appellant in the conduct of which he had been acquitted in the Portuguese criminal proceedings [14]. Having reviewed the case law of the European Court of Human Rights at Strasbourg on the application of article 6(2) after a person has been acquitted in criminal proceedings, Lord Phillips observed that some of the decisions were mutually inconsistent. However, a common factor in cases involving subsequent proceedings was that the court required a procedural connection between the two sets of proceedings before article 6(2) applied to civil claims [21]. In this case, the link between the Portuguese proceedings and the English civil proceedings was not there. The English court was not precluded from considering the evidence which formed the basis of the charges in Portugal [35]. In the absence of such a link, there was no reason in principle why confiscation should not be based on evidence which satisfied the civil standard of proof, notwithstanding that such evidence had proved insufficiently compelling to found a conviction on the application of the criminal standard [44]. The starting point was possession of property by the appellants for whose provenance they were unable to provide a legitimate explanation. There was an abundance of evidence which implicated them in criminal activity that provided the explanation for the property that they owned [55]. Lord Brown remarked that an authoritative Grand Chamber decision from Strasbourg clarifying and rationalising this whole confusing area of the courts case law was required [117]. Lord Clarke agreed [60]. Lord Dyson was less critical of the Strasbourg case law than Lord Phillips [131] but agreed that in this case there was no sufficient link between the two sets of proceedings. The English civil proceedings were not a direct sequel or consequence of any criminal proceedings and none of the judges findings specifically called into question the correctness of the first appellants acquittal in Portugal [142]. The costs order Lord Clarke stated that the costs issue raised a single question of principle: whether an order for costs in favour of SOCA made against a person for whom a recovery order has been made can include the investigation costs incurred by the interim receiver appointed under POCA. In this case, the receivers investigation took over three years and culminated in a final report of over 400 pages, in part because of a failure of the first appellant to cooperate with the receiver. The costs paid by SOCA totalled some 1m [72]. The jurisdiction to award costs was governed by section 51 of the Senior Courts Act 1981 which makes the costs of or incidental to proceedings recoverable at the discretion of the court, subject to any express rules [76]. The investigative costs in this case were plainly costs of or incidental to the proceedings. Investigative work was an essential part of civil recovery proceedings [79]. Nothing in POCA or in the Civil Procedural Rules precluded the court from making the order [81]. The position of a receiver appointed under Part 5 of POCA was significantly different from an ordinary receiver. As well as the duty to investigate, he had no power to sell the assets nor did he have a lien over them for his costs. There was a much closer relationship between the parties and an interim receiver. The Supreme Court agreed with the Court of Appeal that it would decline to follow the decision of the Court of Appeal in Northern Ireland in SOCA v Wilson [2009] NI 28, and dismissed the appeal [109]. |
The case concerns a challenge by way of judicial review by the respondent, Mr Wright, to the grant of planning permission by the second appellant (the Council) to the first appellant (Resilient) for the change of use of land at a farm in Gloucestershire from agriculture to the erection of a wind turbine. In its application for planning permission, Resilient proposed that the turbine would be built and run by a community benefit society and that an annual donation would be made to a local community fund. The Council took this donation into account in granting planning permission and made the permission conditional on the development being undertaken by the community benefit society and the provision of the donation. In doing so, the Council had regard to government policy to encourage community led wind turbine developments. Mr Wright challenged the grant of permission on the grounds that the donation was not a material planning consideration and the Council had acted unlawfully by taking it into account. He succeeded at first instance and in the Court of Appeal. Resilient and the Council now appeal to this court. The Secretary of State for Housing, Communities and Local Government was given permission to intervene and made submissions in support of the appeal. The issue on the appeal is whether the promise to provide a community fund donation qualifies as a material consideration for the purposes of section 70(2) of the Town and Country Planning Act 1990 as amended (the 1990 Act) and section 38(6) of the Planning and Compulsory Purchase Act 2004 (the 2004 Act). The Supreme Court unanimously dismisses the appeal. Lord Sales gives the judgment, with which all members of the Court agree. Planning permission is required for development of land, which includes the making of any material change in use (sections 57(1) and 55(1) of the 1990 Act). The planning authority must have regard to the development plan and any other considerations material to the proposed change of use (section 70(2) of the 1990 Act and section 38(6) of the 2004 Act) [31]. A three fold test for material considerations is found in Newbury District Council v Secretary of State for the Environment [1981] AC 578 (Newbury). This requires that the conditions imposed: (1) be for a planning purpose and not for any ulterior purpose; (2) fairly and reasonably relate to the development; and (3) must not be so unreasonable that no reasonable planning authority could have imposed them [32 33]. It is logical to equate the ambit of material considerations with the scope of the power to impose planning conditions, because if the planning authority has the power to impose a condition it follows that it could treat the imposition of that condition as a material factor in favour of granting permission. The relevance of the Newbury criteria to determine the ambit of material considerations in the 1990 and 2004 Acts is well established and is not in contention on this appeal [34]. It is a fundamental principle of the planning system that planning permission cannot be bought or sold. A principled approach to identifying material considerations in line with the Newbury criteria is important to protect landowners and the public interest, since it prevents a planning authority from extracting money or other benefits unrelated to the proposed use of the land as a condition for granting permission and from deciding whether to grant permission by reference to such matters rather than by reference to the planning merits of the proposed development in issue [39]. This protection has been established by Parliament through statute, as interpreted by the courts, and cannot be overridden by general policies laid down by central government [42]. In the present case, the community benefits promised by Resilient did not satisfy the Newbury criteria and therefore did not qualify as a material consideration under either the 1990 or the 2004 Act. The benefits were not proposed to pursue a proper planning purpose, but rather for the ulterior purpose of providing general benefits to the community. They did not fairly and reasonably relate to the development for which permission was sought; the community benefits did not affect the use of the land but were instead proffered as a general inducement to the Council to grant planning permission, in breach of the principle that planning permission cannot be bought or sold [44]. The statutory concept of a material consideration as interpreted by the courts does not vary according to government guidance and policy statements [45 49]. On the other hand, a change in national policy can affect the issue of whether a decision satisfies the third limb of the Newbury test, by making it clear that a reasonable local planning authority can properly consider that a particular condition is justified in terms of planning policy [53]. |
The main issue in this appeal is whether, and if so which and in what circumstances, breaches of public law are capable of rendering unlawful the detention of foreign national prisoners (FNPs) pending their deportation. Section 3(5)(a) of the Immigration Act 1971 (the 1971 Act) confers on the Secretary of State for the Home Department a power to deport foreign nationals. Schedule 3 of the 1971 Act empowers the Secretary of State, in certain specified circumstances, to detain foreign nationals pending deportation. From at least 1991, the Secretary of State had maintained a published policy on the application of the power to detain. This policy presumed in favour of release whilst justifying detention in some circumstances. However, following adverse publicity in April 2006, the Secretary of State adopted a new policy which was not published. Between April 2006 and September 2008, the Secretary of State applied this unpublished policy which imposed a near blanket ban on release of FNPs. On 9 September 2008, the Secretary of State amended the published policy to replace all references to a presumption of release with a presumption of detention. However, on 22 January 2009, following the decision of Davis J in the current proceedings, the published policy was amended again to omit references to a presumption of detention. Walumba Lumba is a citizen of the Democratic Republic of Congo. He entered the UK unlawfully in April 1994. He was later convicted of a number of offences and was sentenced to 4 years imprisonment for wounding with intent on 12 January 2004. On 3 April 2006, the Secretary of State informed Mr Lumba of the intention to deport him. He was due to be released from prison in June 2006, but was informed that he was to be detained pending deportation. He left the United Kingdom voluntarily on 13 February 2011. Kadian Mighty is a citizen of Jamaica. He was granted indefinite leave to remain in the UK in February 2003. On 27 June 2003 he was sentenced to 42 months imprisonment for possession of a Class A drug with intent to supply. On 10 May 2006, the Secretary of State informed Mr Mighty of the intention to deport him. On 19 May 2006, he was detained pending deportation. However, he was released on bail on 28 July 2008. Mr Lumba issued proceedings on 18 October 2007 claiming a declaration that his detention was unlawful and damages. His case was joined with that of Mr Mighty who had issued proceedings on 29 May 2008. In addition, Mr Lumba, who remained in detention until his departure from the United Kingdom, challenged the reasonableness of the duration of his detention and sought a mandatory order that he be released. At first instance ([2008] EWHC 3166 (Admin)), Davis J granted declarations to the effect that it was unlawful for the Secretary of State to operate an unpublished policy which presumed in favour of detention. He dismissed the other claims, including the claims for damages for unlawful detention. The appellants appealed and the Secretary of State cross appealed on the issue of the presumption of detention. The Court of Appeal (Lord Neuberger MR, Carnwath and Stanley Burnton LJJ) allowed the cross appeal but otherwise dismissed the appeals ([2010] 1 WLR 2168). The Supreme Court, by a majority, allows the appeals. Lord Dyson gives the lead judgment. The majority hold that the Secretary of State is liable to both appellants in the tort of false imprisonment as the statutory power to detain them was exercised in breach of public law duties (Lords Phillips, Brown and Rodger dissenting). The appellants are, however, only entitled to nominal damages assessed at 1 (Lords Hope, Walker and Lady Hale dissenting). They are not entitled to exemplary damages. The court remits to the High Court the question whether Mr Lumba was detained for longer than a reasonable period in breach of the principles in R v Governor of Durham Prison, Ex p Hardial Singh [1984] 1 WLR 704 (the Hardial Singh principles). The court considers five issues: (1) whether the unpublished policy maintained by the Secretary of State between April 2006 and September 2008 is unlawful on grounds of public law error; (2) if so, whether detention on the basis of such a policy is unlawful in circumstances where the appellants would have been lawfully detained in any event; (3) if so, whether the appellants are entitled to recover more than nominal damages; (4) whether the appellants are entitled to an award of exemplary damages; and (5) in the case of Walumba Lumba, whether there has been a breach of the Hardial Singh principles. The requirements of public law The court holds unanimously that it is lawful for the Secretary of State to operate a policy which sets out the practice that she will normally follow in deciding whether or not to detain FNPs pending their deportation, provided that the requirements of public law, Hardial Singh and Article 5(1)(f) of the ECHR are respected: [40] [55]. However, as regards the application of the statutory power to detain, it is unlawful in public law for the Secretary of State to maintain an unpublished policy which is inconsistent with her published policy and which applies a near blanket ban on the release of FNPs: [26] [38]. Such a policy was applied to the appellants between April 2006 and September 2008: [21]. Liability in false imprisonment Breach of a public law duty on the part of the person authorising detention is capable of rendering that detention unlawful and did render it unlawful in this case: [62] [88], [198] [207], [221]. Trespassory torts (such as false imprisonment) are actionable per se regardless of whether the victim suffers any harm. Accordingly, by a majority, the court holds that the fact that the appellants would have lawfully been detained in any event does not affect the Secretary of States liability in false imprisonment: [62], [64] [88], [197], [208] [211], [221], [239] [247]. Lords Phillips and Brown (with whom Lord Rodger agrees) dissent and hold that because the appellants would have been lawfully detained the Secretary of State is not liable to them in false imprisonment: [319] [334], [343] [360]. Damages By a majority, the court holds that the fact that the appellants would have been lawfully detained is relevant to damages rather than to liability. Since the appellants have suffered no loss they should recover no more than nominal damages of 1: [90] [96]. They are not additionally entitled to damages to vindicate the importance of the right and the seriousness of the infringement: [97] [101], [222] [237], [253] [256] (Lords Hope, Walker and Lady Hale dissenting: [176] [180], [195], [212] [217]). Further, the court holds unanimously that the appellants are not entitled to exemplary damages: [150] [169]. Reasonableness of the length of detention under the Hardial Singh principles As regards the assessment of whether a reasonable period of detention has elapsed, the court unanimously holds that the risk of reoffending and the legal challenges pursued by the detainee are relevant. The relevance of a refusal to voluntarily return is limited: [106] [128]. It is for a court of first instance to decide whether Mr Lumbas detention for almost 56 months was in breach of the Hardial Singh principles. Accordingly, his claim is remitted to the High Court: [129] [148]. |
The appellant (Melissa Menelaou) is the owner of a property, 2 Great Oak Court (the Property), bought by her parents in 2008 (in her name as a gift to her) as a family home for her, her siblings and her parents. The respondent Bank had two charges, securing the parents borrowing, totalling about 2.2 million over the previous family home owned by the parents, which was sold. The Bank agreed to release those charges, in return for a lump sum payment of 750,000 discharging part of the debt, and a fresh charge over the Property to secure the remaining indebtedness of 1.45 million. This left 875,000 to be used out of the sale proceeds for the purchase of the Property in Melissas name. Melissa was eventually registered as the proprietor of the Property, and the Bank as purported chargee. Melissa only became aware of the existence of the charge in 2010. She then discovered that the charge had not been properly executed and was in fact void, because she had not signed it and it had been altered without consulting her. She sought rectification of the register. The Bank invoked the unpaid vendors lien (namely the charge which the law gave to the vendor over the Property to secure the payment of the 875,000 which the purchasers were contractually due to pay him). It counterclaimed that, because the 875,000 used to pay the vendor effectively originated from its release of the charges over the previous property, and was intended to be secured on the Property, the law entitled it to be subrogated to the unpaid vendors lien, and thereby to claim a charge over the Property in the sum of 875,000. That counterclaim was the only issue at trial. It was dismissed by the judge at first instance, but granted by the Court of Appeal. The Supreme Court dismisses the appeal. Lord Clarke (with whom Lord Kerr and Lord Wilson agree) delivers the judgment. Lord Neuberger writes a concurring judgment, with which Lord Kerr and Lord Wilson also agree. Lord Carnwath writes a judgment dismissing the appeal, but on different reasoning. This is a case of unjust enrichment. Melissa was enriched. The critical question is whether she was enriched at the expense of the Bank [19 22], because if so that enrichment was clearly unjust. The answer is plainly yes: she became owner of the Property (subject to the charge) thanks to the Banks agreement to release a part of the debt in return for that charge. Since the charge was void, the value of the Property to Melissa was considerably greater, at the expense of the Bank which was left without the security that was central to the overall scheme [24]. There was one overall scheme, and a sufficient causal connection between the Banks loss and Melissas benefit, adopting either a narrow approach (with exceptions) or broad approach to the causal test [25 35]. There are no other defences available to Melissa [36]. The appropriate equitable remedy is that the Bank is subrogated to the unpaid sellers lien. This has the effect of reinstating Melissas liability under the charge, reversing her unjust enrichment, and allowing the Bank to enforce its equitable interest in the Property by sale [49]. Although this is a complex remedy, it has been rationalised by the development of the doctrine of unjust enrichment, and may now be applied flexibly to the facts of any particular case [37 48; 50]. Lord Neuberger agrees. The Bank can establish an unjust enrichment claim against Melissa. The first step is that she was enriched, because she received the freehold of the Property for nothing (or more accurately, received the freehold free of the intended charge) [62 64]. The second step is that Melissa was enriched at the Banks expense, both because the Bank could have prevented the purchase of the Property proceeding until it had been granted a charge, and because there was one overall scheme [65 68]. Thirdly, Melissas enrichment was unjust, since she (as a donee) could not be placed in a better position than her parents, who were not entitled to transfer the freehold free of the intended charge, and since she directly benefited from the scheme [69 73]. Fourthly, Melissa cannot point to any facts which give her a defence, even though she did not know of the charge and the Bank might have an alternative claim [73 77]. Lord Neuberger further notes that it is hard to identify a more appropriate remedy than subrogating the Bank to the lien over the freehold [79 82, 106]. The remedy is broad and flexible, and justified here on analysis of the decision of the House of Lords in Orakpo v Manson Investments Ltd [1978] AC 95, 104 and Lord Hoffmans observations in Banque Financire de la Cit v Parc (Battersea) Ltd [1999] 1 AC 221 [83 93]. Melissas case is by contrast pure formalism [95, 99]. This remedy could probably also be justified on the basis that the Bank had a proprietary interest in the 875,000 used to purchase the Property, and that either the Bank or Melissas parents were the beneficial owners of that sum [100 104, 106]. Lord Carnwath concurs, reaching the same conclusion, but by strict application of the traditional rules of subrogation. The proprietary restitutionary remedy is justified in this case by principles of tracing and subrogation as expressed in Boscawen v Bajwa [1996] 1 WLR 328, not because of any tenuous relationship with a vendors lien, said to subsist by way of analogy [109, 117 121]. The remedy requires that the claimant establish that its money was used to discharge the security through the process of tracing; the looser test of economic reality or simple causation (applied by the Court of Appeal in this case) is insufficient [132]. Here, there was a clear tracing link between the Bank and the money used to purchase the Property. The Banks interest in the purchase money was clear and direct. [134 140]. |
The appellant (Iceland) is a well known supermarket operator, specialising in refrigerated goods. Its premises include a retail warehouse at Penketh Drive, Liverpool (the Property). The issue in the appeal is whether the services provided by an air handling system (AHS), used in connection with refrigerated goods at the Property, are manufacturing operations or trade processes under the Valuation for Rating (Plant and Machinery) (England) Regulations 2000 (the 2000 Regulations). If they are, then the AHS is to be ignored in calculating the rateable value of the Property. The issue arises because Iceland unsuccessfully applied to the Valuation Officer in 2010 to reduce the rateable value of the Property on that basis. Iceland then appealed to Valuation Tribunal, which decided the issue in Icelands favour. That finding was reversed by the Upper Tribunal, whose decision was upheld by the Court of Appeal. Iceland appealed to the Supreme Court on the issue. The Supreme Court unanimously allows the appeal. Lord Carnwath gives the judgment, with which Lord Kerr, Lord Reed, Lord Hughes and Lady Black agree. Under paragraph 2(1) of Schedule 6 to the Local Government Finance Act 1988, the rateable value of a non domestic hereditament is taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on the basis of certain prescribed assumptions. Prescribed assumptions are set out in the 2000 Regulations [6]. The 2000 Regulations are derived from the recommendations of a report by an Expert Advisory Committee under the chairmanship of Mr Derek Wood QC (the Wood Report) published in 1993. The Committee reviewed the law and practice relating to the rating of plant and machinery, with a view to updating and harmonising it throughout the United Kingdom [7]. The prescribed assumptions under paragraph 2 of the 2000 Regulations include the assumption that any plant or machinery, if it belongs to any class listed in the Schedule to the 2000 Regulations, is assumed to be part of the hereditament in or on which it is situated. The classes in the Schedule are in effect exceptions to the general rule that the value of plant and machinery cannot affect the estimated value of the hereditament for rating purposes. [8]. Class 2 in the Schedule consists of: Plant and machinery specified in Table 2 below which is used or intended to be used in connection with services to the hereditament or part of it, other than any such plant or machinery which is in or on the hereditament and is used or intended to be used in connection with services mainly or exclusively as part of manufacturing operations or trade processes. (Emphasis added.) It is common ground that the AHS is covered by Table 2 and that it is used in connection with services to the hereditament. The only issue is whether the AHS is excluded from Class 2 by the wording italicised above (the Proviso) [9 10]. The history of the legislation provides useful background to the law as it stood at the time of the Wood Report. Historically, it has been difficult to draw a defensible line between, on the one hand, plant and machinery properly treated as part of the hereditament when assessing its hypothetical letting value, and plant and machinery more fairly attributable to the tenants business within it (the tools of the trade). Lord Carnwath traces the development of the law on the issue in England and in Scotland, where the law developed differently, up to the time of the review by the Wood Committee [12 19]. The Wood Report accepted the validity up to a point of a tools of the trade exemption, subject to qualification in the interests of fairness between ratepayers. The Committee accepted the underlying conceptual approach of the regulations in each part of the UK as soundly based. It recommended, amongst other things, that future regulations be based on the principle that process plant and machinery which can fairly be described as tools of the trade should be exempt within certain limits [20 22]. The Committee commented specifically on the predecessor in the English regulations to Class 2, describing it as not free from ambiguity. They concluded that, despite such difficulties, the law as we understand it in both England and Scotland should remain unaltered but that the draftsmanship should be improved to eliminate the difficulties inherent in the English Regulations. Annex L to the Report also contained various examples, including that of refrigeration plant. The Committee concluded that this was exempted and should remain so under their recommendations [23 24]. In the Supreme Court the respondent advanced a broader case than that adopted by the lower courts. This broader argument was that the Proviso concerned productive activities in industry only and not other commercial activities, such as Icelands retail activities. This contention was impossible in view of (i) the wording of the 2000 Regulations and (ii) the background of the Wood Report. As to the first, the draftsman could have easily restricted the Proviso to industrial activities, but the inclusion of trade processes, as an alternative to manufacturing operations, instead widens it. The word trade naturally extends to Icelands retail activities. Subject to the meaning of the word process, nothing in the Proviso or its context justifies a narrower approach [34]. As to the second, the respondents broad contention was inconsistent with the Wood Report, which emphasised the principle of fairness between ratepayers. No such limitation was proposed in the discussion of what became Class 2. Its proposed rules included a the tools of the trade exemption, without limiting the nature of that trade. Its proposed rule dealing with the need to draw lines between service and process functions was expressed in general terms [35]. The respondents contention was even harder to reconcile with the Scottish legislation, which referred to any trade, business or manufacturing process and which the Wood Report criticised for not going far enough [36]. Turning to the reasoning of the Court of Appeal and the Upper Tribunal, both saw the Proviso as an exception to be construed narrowly; and as referring to a process designed to bring about a transition from one state to another. That pays insufficient regard to the place of the Proviso within the scheme of the regulations as a whole: it is and always was an exception to an exception. It brings items of plant back into the scope of the general rule. The rationale is that, although they may provide a service to the building, their main or exclusive function is to provide a service to the activities of the trader within it. They are therefore more fairly considered as tools of the trade [37]. Nothing in the Wood Report suggests that changes of language in the relevant provisions over time were intended to signal any substantive change. On the contrary, the intention was to retain the law substantially without alteration, while improving its draftsmanship [38]. There is nothing in the word process itself implying a transition or change. It has various meanings. In its widest sense, it includes anything done to goods and materials. A trade process is simply a process (in that wide sense) carried on for the purposes of a trade [39]. In the context of Icelands trade, the word is apt to cover the continuous freezing or refrigeration of goods to preserve them artificially. Since the services provided by the relevant plant have been held to be used mainly or exclusively as part of that trade process, they should be left out of account for rating purposes [40]. |
In response to various incidents of international terrorism, including the attacks on 9/11, the UN Security Council (the UNSC) passed resolutions (UNSCRs) requiring member states to take steps to freeze the assets of: (i) Usama Bin Laden, the Taliban and their associates; and (ii) those involved in international terrorism. The UNSC established a list of persons whose assets member states were obliged to freeze (the Consolidated List). Those included in the Consolidated List are not informed of the basis for their inclusion or afforded the right to challenge the decision before an independent and impartial judge. The Appeals concern the legality of the Terrorism (United Nations Measures) Order 2006 (the TO) and the Al Qaida and Taliban (United Nations Measures) Order 2006 (the AQO). The TO and AQO were made by Her Majestys Treasury (the Treasury) pursuant to s.1 of the United Nations Act 1946 (the 1946 Act), which authorises the making of such Orders in Council as are necessary or expedient to give effect to UNSCRs. The TO goes beyond the requirements imposed by the relevant UNSCRs by providing that a persons assets can be frozen on the basis of a reasonable suspicion. The AQO transposes the UNSCRs concerning the Taliban into domestic law. Crucially, if a person is named in the Consolidated List, the AQO provides that his assets in the UK will automatically be frozen. A person whose name is on the list has no right to challenge his listing before a court. Freezing measures under the TO and AQO, which are not subject to any time limit, place very severe limitations on the ability of persons who have been designated to deal with their property. They have an extremely grave effect upon their freedom of movement, their liberty and private and family lives, and those of their families and their associates. A, K and M were the subject of asset freezes under the TO. The effect on them and their families has been severe. G and HAY are named in the Consolidated List and so were both automatically designated as subject to asset freezing by the AQO. G was included in the Consolidated List at the request of the UK, which continues to support his listing. HAY was added at the behest of an undisclosed UN member state. The UK opposes his inclusion in the Consolidated List and is engaged, to date unsuccessfully, in efforts to de list him. The issue before the Court was whether s.1(1) of the 1946 Act gave the Treasury the power to make the TO and AQO, having regard to: (i) the gravity of the interference with fundamental rights which the asset freezes bring about; (ii) the fact that the TO allowed asset freezing on grounds of reasonable suspicion; and (iii) the fact that the AQO entirely deprived those named in the Consolidated List of any right of access to a court. Following the hearing in the case, the Treasury issued new designations in respect of A, K, M and G under the authority of the Terrorism Order (United Nations Measures) 2009 (the TO 2009). The terms of the TO 2009 are substantially similar to those of the TO. The Supreme Court has unanimously held that the TO should be quashed as ultra vires s.1(1) of the 1946 Act. It also held by a majority of six to one (Lord Brown dissenting) that Article 3(1)(b) of the AQO must also be quashed as ultra vires. It was noted that if the designations in respect of A, K, M and G imposed subsequent to the hearing pursuant to the TO 2009 had been before the Supreme Court these too would have been quashed. General Remarks Lord Hope (with the agreement of Lord Walker and Lady Hale) giving the leading judgment, noted the far reaching and serious effect of the asset freezing measures on the individuals concerned and their families [paras [4], [38], [39] and [60]]. s.1(1) of the 1946 Act allows Orders in Council to be made without even the most basic Parliamentary scrutiny [paras [48] [50]]. In the absence of Parliamentary control the Court must carefully examine such drastic measures [paras [5], [6] and [53]]. Australia and New Zealand gave effect to their UNSCR obligations by primary legislation that was subjected to the scrutiny and approval of their respective legislatures. Also, the Anti terrorism, Crime and Security Act 2001 enacted an asset freezing regime that is significantly less onerous and attended by greater safeguards than the system established by the TO and AQO [paras [51] [54]]. The legislative history of the 1946 Act demonstrates that Parliament did not intend that the 1946 Act should be used to introduce coercive measures which interfere with UK citizens fundamental rights [paras [16] and [44]]. The principle of legality requires that general or ambiguous statutory words should not be interpreted in a manner that infringes fundamental rights [paras [45] and [46]], and s.1(1) of the 1946 Act must be interpreted in this light. Orders made under s.1(1) would therefore only be legitimate when the interference with fundamental rights to which they give rise is no greater than that which the underlying UNSCR requires [para [47]]. The TO The relevant UNSCRs did not address the standard of proof for imposing asset freezes. The reasonable suspicion standard in the TO must be assessed in light of the entire system that the TO establishes, particularly the seriousness of the interferences with fundamental rights that it effects [paras [58] [60]]. By introducing a test of reasonable suspicion the Treasury exceeded the power conferred by s.1(1) of the 1946 Act [para [61]]. The AQO Lord Hope noted that the effect of the AQO, in this case, did not rely upon a reasonable suspicion criterion and that in contrast to the TO the AQO does not go beyond the relevant UNSCRs [para [64]]. But there are no means whereby G or HAY can challenge the decision to list them as terrorists, with the consequence that their assets are frozen automatically, before an independent and impartial judge [paras [77] [80]]. Article 3(1)(b) of the AQO must therefore be quashed [paras [81] and [82]]. The Status of the Designations Against A, K, M and G pursuant to the TO 2009 The principal criticisms directed against the TO apply equally to the TO 2009 [paras [28]]. Had the TO 2009 been before the Court it would have been quashed [para [83]]. Other Comments Nobody should form the impression that in quashing the TO and the operative provision of the AQO the Court displaces the will of Parliament. On the contrary, the Courts judgment vindicates the primacy of Parliament, as opposed to the Executive, in determining in what circumstances fundamental rights may legitimately be restricted [para [157] per Lord Phillips]. The features of the AQO that are characterised as objectionable are the ineluctable consequence of giving effect to the relevant UNSCRs the same apparent deficiency would apply to primary legislation. Accordingly, the AQO should be upheld [paras [203] [204] per Lord Brown (dissenting)]. |
Mr and Mrs Agbaje were married for 38 years. Both Nigerian by birth, they had met in England in the 1960s and acquired UK citizenship in 1972. All five of their children were born (and all but one educated) in England, and in 1975 Mr Agbaje bought a property in England called Lytton Road in which their children stayed with a nanny. But for the majority of their married life Mr and Mrs Agbaje lived in Nigeria. They separated in 1999, at which point Mrs Agbaje came to live in Lytton Road. She has lived here ever since. In 2003 Mr Agbaje issued divorce proceedings in the Nigerian courts in which Mrs Agbaje sought ancillary relief. The Nigerian court awarded her a life interest in a property in Lagos (with a capital value of about 86,000) and a lump sum equivalent to about 21,000. Part III of the Matrimonial and Family Proceedings Act 1984 was enacted to give the English court the power to grant financial relief after a marriage has been dissolved (or annulled) in a foreign country. Mrs Agbaje sought such relief. The High Court granted her leave (as required under Part III) and ultimately ordered that she should receive a lump sum equal to 65% of the sale proceeds of Lytton Road (equivalent to about 275,000) on condition that she relinquish her life interest in the Lagos property. The award represented 39% of the total assets. The Court of Appeal set aside the whole of the English award principally on the ground that the High Court had given insufficient weight to the connections of the case with Nigeria. Put broadly, the overarching issue for the Supreme Court was: what is the proper approach for courts to take when considering applications made under Part III? The Supreme Court unanimously allowed the wifes appeal and restored the order of the High Court. The judgment of the Court was delivered by Lord Collins. The Court held that Part III is to be applied in light of the purpose of the Act, which was the alleviation of the adverse consequences of no, or no adequate, financial provision being made by a foreign court in a situation where the parties had substantial connections with England ([71]). In applying Part III, the English courts should not be deciding whether it would be appropriate for an order to be made by a court in England or Wales as opposed to a foreign court. The whole point of Part III is to allow for relief in circumstances where there have already been proceedings in a foreign country ([50]). Relevant to the question of whether an order should be made and, if so, what order, will be a number of factors such as the financial benefit which the applicant has already received, or whether the applicant has failed to take advantage of a right under the foreign law to claim financial relief. The hardship or the injustice which would result if no award were made will be relevant factors, although neither are pre conditions to an award under Part III ([41] [44] and [60] [61]). Although there was no principle that an English court could only make an award that was the minimum necessary to remedy the injustice which would otherwise occur, it was equally not the intention of the legislation to allow a simple top up of the foreign award so as to equate with an English award in every case ([62] [65]; [72]). If the connection with England is not strong and a spouse has received adequate provision from the foreign court, it will not be appropriate for Part III to be used to top up the award. If the English connections are strong, however, it may be appropriate to do so ([70]). The amount of financial provision awarded under Part III will depend on all the circumstances of the case. But three general principles should be applied. First, primary consideration should be given to the welfare of any child of the marriage. Second, it will never be appropriate to make an order which gives the claimant more than she or he would have been awarded had all proceedings taken place within this jurisdiction. Third, where possible the order should have the result that provision is made for the reasonable needs of each spouse ([73]). |
The Appellant, Mrs Owens, and the Respondent, Mr Owens, were married in 1978 and have two adult children. Mrs Owens had been contemplating a divorce since 2012 (when she consulted solicitors who prepared a draft divorce petition for her) but it was not until February 2015 that she left the matrimonial home. The parties have not lived together since her departure. In May 2015 Mrs Owens issued the divorce petition which is the subject of the current proceedings. It was based on s.1(2)(b) of the Matrimonial Causes Act 1973, and alleged that the marriage had broken down irretrievably and that Mr Owens had behaved in such a way that Mrs Owens could not reasonably be expected to live with him. It was drafted in anodyne terms but when it was served on Mr Owens he nevertheless indicated an intention to defend the suit, arguing that the marriage had largely been successful. In October 2015 the matter came before a recorder for a case management hearing. In light of Mr Owens defence, the recorder granted Mrs Owens permission to amend her petition so as to expand her allegations of behaviour. The recorder also directed that the substantive hearing of the dispute would take place over the course of a day (Mrs Owens had originally suggested a half day would suffice) and that there would be no witnesses other than the parties themselves. Mrs Owens duly amended her petition so as to include 27 individual examples of Mr Owens being moody, argumentative, and disparaging her in front of others, but at the one day hearing her counsel ultimately focussed on only a very few of these. The judge found that the marriage had broken down, but that Mrs Owens 27 examples were flimsy and exaggerated, and that those relied on at the hearing were isolated incidents. Accordingly, the test under s.1(2)(b) was not met and Mrs Owens petition for divorce was dismissed. Mrs Owens appealed against this decision to the Court of Appeal, but her appeal was also dismissed. She now appeals against the Court of Appeals decision to the Supreme Court. The Supreme Court unanimously dismisses the appeal, with the result that Mrs Owens must remain married to Mr Owens for the time being. Lord Wilson gives the majority judgment, with whom Lord Hodge and Lady Black agree. Lady Hale and Lord Mance each give a concurring judgment. It is important to bear in mind the legal context to this dispute, namely that defended suits for divorce are exceedingly rare. While the family court recognises that s.1 of the Matrimonial Causes Act 1973 must be conscientiously applied, it takes no satisfaction when obliged to rule that a marriage which has broken down must nevertheless continue in being [15]. The expectations are that almost every petition under section 1(2)(b) will succeed, that the evidence before any contested hearing will be brief, and that the judgment of the court in such a hearing will almost certainly result in the pronouncement of a decree [17]. This is the background to the contested hearing in this case, and explains why Mrs Owens advisors agreed to a short hearing with no external witnesses to corroborate her evidence [14 15]. When applying section 1(2)(b) the correct inquiry is: (i) by reference to the allegations of behaviour in the petition, to determine what the respondent did or did not do; (ii) to assess the effect which the behaviour had upon this particular petitioner in light of all the circumstances in which it occurred; and (iii) to make an evaluation as to whether, as a result of the respondents behaviour and in the light of its effect on the petitioner, an expectation that the petitioner should continue to live with the respondent would be unreasonable [28]. This test has been applied for many years but the application of the test to the facts of an individual case is likely to change over time, in line with changes in wider social and moral values [30 32]. The most relevant change over the past forty years is the recognition of equality between the sexes, and of marriage as a partnership of equals [34]. At the hearing, the judge gave himself the correct self direction; he understood he was applying an objective test, but with subjective elements [39]. The majority nevertheless have concerns about other aspects of the judges analysis. In particular, they have an uneasy feeling about the summary despatch of a suit which was said to depend on an authoritarian course of conduct, when the judge had scrutinised only a few individual incidents of Mr Owens behaviour [42]. However, uneasy feelings are of no consequence in an appellate court. A first instance judge has many advantages in reaching the relevant conclusions, and Mrs Owens complaints about the judgment have already been rehearsed and dismissed by the Court of Appeal. In such circumstances it is most unlikely for it to be appropriate for the Supreme Court to intervene [43]. However, the majority invite Parliament to consider replacing a law which denies Mrs Owens a divorce in the present circumstances [44 45]. Concurring judgments Lady Hale agrees with Lord Wilson as to the legal analysis, but has several misgivings about the judges judgment [47 48]. Her gravest misgiving relates to the fact that this was a case which depended upon the cumulative effect of a great many small incidents (which were said to be indicative of authoritarian and demeaning conduct over a period of time), yet the hearing before the judge was not set up or conducted in a way which would enable the full flavour of such conduct to be properly evaluated [50]. In light of her misgivings, she considers that the proper disposal is to allow the appeal, and send the case back to the first instance court to be tried again. However, this is not a disposal which Mrs Owens is actually seeking, and Lady Hale is therefore reluctantly persuaded that the appeal should be dismissed [53 54]. Lord Mance also agrees with Lord Wilson as to the wider legal analysis, however he does not share the concerns expressed by Lord Wilson and Lady Hale about the judges judgment. Lord Mance considers that the judge did not misdirect himself at any stage, and that the judge properly concluded that there was nothing in the case overall [57, 59]. Moreover, although the hearing of the defended divorce petition was listed for a relatively short period, this was how the judge was invited to decide the matter. It would be inappropriate for the Supreme Court to interfere at this stage and say it was not possible in the circumstances for the judge to have reached a fair determination [58]. |
Under the Scottish Independence Referendum (Franchise) Act 2013 (the Franchise Act), convicted prisoners were not eligible to vote in the Scottish independence referendum on 18 September 2014 [2]. The Appellants were Scottish prisoners who challenged that exclusion through judicial review proceedings [1]. They relied on previous case law establishing that a general and automatic prohibition that bars prisoners from participating in general elections will violate article 3 of Protocol No 1 (A3P1) of the European Convention on Human Rights (ECHR) [3]. A3P1 is entitled Right to free elections and reads: The High Contracting Parties undertake to hold free elections at reasonable intervals by secret ballot, under conditions which will ensure the free expression of the opinion of the people in the choice of the legislature. The appellants judicial review applications were refused by Lord Glennie in the Outer House of the Court of Session on 19 December 2013. The First Division of the Inner House of the Court of Session refused a reclaiming motion on 2 July 2014 [4]. The Supreme Court heard and decided the appellants appeal on 24 July 2014, in order that the matter be resolved promptly in advance of the then imminent referendum [1]. This judgment sets out the reasons for that decision. The Supreme Court dismisses the appeal by a majority of five to two. It holds that the statutory disenfranchisement of convicted prisoners from voting in the Scottish referendum was lawful. Lord Hodge gives the substantive judgment of the majority (comprising himself, Lord Neuberger, Lady Hale, Lord Clarke and Lord Reed). In their view, the words of A3P1 on their ordinary meaning refer to an obligation to hold periodic elections to a democratically elected legislature. However, the requirement that such elections take place at reasonable intervals suggests that the drafters did not have referendums in mind [8]. There is unequivocal case law from the European Court of Human Rights (ECtHR) to show that the reach of A3P1 is limited to periodic general elections to the legislature [14]. Four cases are cited as examples of referendums not covered by A3P1: the UKs 1975 referendum on whether to remain in the EEC in X v United Kingdom (Application No 7096/75, 3 October 1975); referendums on accession to the EU by Latvia ( v Latvia (Application No 14755/03, 26 January 2006)) and Poland (Niedwied v Poland (2008) 47 EHRR SE6) [10]; and the UKs nationwide referendum on the alternative vote (McLean & Cole v United Kingdom (2013) 57 EHRR SE95) [11]. Although the Supreme Court is not bound to follow ECtHR authority, it will ordinarily do so when, as here, there is a clear and constant line of decisions delineating the scope of a Convention right [13]. These cases also show that the political importance of a democratic decision is the not the criterion for its inclusion within A3P1 [17]. The appellants advanced several arguments as to why the Franchise Act was unlawful, which are not accepted. Article 10 of the ECHR, protecting freedom of expression, does not confer any wider right to vote than is provided by A3P1 [19]. The prohibition on prisoners voting does not breach EU law because: (i) the outcome of the referendum would not in itself have been determinative of voters EU citizenship [23]; and (ii) EU law does not incorporate any right to vote [24]. The appellants relied on Article 25 of the International Covenant on Civil and Political Rights (ICCPR), which protects the right to participate in referendums on self determination, both as an aid to interpreting A3P1 and as a free standing international law obligation [26]. Neither point succeeded. Article 25 ICCPR is different in wording and scope from and does not inform the interpretation of A3P1 [28]. The ICCPR is not incorporated into UK domestic law and therefore Article 25 does not affect the legislative competence of the Scottish Parliament [30]. The right to vote is a basic or constitutional right [33] but the common law has not developed so as to recognise a right of universal and equal suffrage from which any derogation must be provided for by law and proportionate [34]. Neither is the right to vote inherent in the rule of law on a separate basis from a statutory franchise [38]. Lord Neuberger gives a concurring judgment focussing on the natural meaning of the words of A3P1 [44 46]. Lady Hale gives a concurring judgment expressing her view that A3P1 does not require the holding of a referendum, even on such an important issue as Scottish independence [54] and hence does not have a bearing on the right to vote in such a referendum [55]. Lord Kerr and Lord Wilson dissent from the majority. Lord Kerr, with whom Lord Wilson agrees [90], considers that the natural meaning of the words of A3P1 not only encompasses elections to the legislature but also elections that will determine the form of the legislature [65]. The ECHR is a living instrument and A3P1 may apply to situations which were not in the contemplation of its original drafters [67]. A fundamental purpose of the ECHR is to guarantee an effective political democracy; that purpose would be frustrated by preventing the safeguards applicable to ordinary legislative elections from applying to this most fundamental of votes [68]. The requirement to hold elections at regular intervals is secondary to the primary aim of A3P1 which is to ensure that citizens should have a full participative role in the selection of those who will govern them [69]. The ECtHR case law has not, so far, considered a referendum that will determine the type of legislature that a countrys people will have [71]. Lord Wilson adds that the words ensure the free expression of the opinion of the people in the choice of the legislature are dominant in A3P1 (and particularly apt to describe the Scottish independence referendum) [93] while the words at regular intervals are subservient [94] and must not be interpreted to contrary effect to the object and purpose of the provision [96]. The ECtHR authorities on referendums are not directly on point [103] and it is open to the Supreme Court to go further than the Strasbourg case law in developing a Convention right [105]. |
The question in this appeal is whether extraditing Mr Kapri to Albania would breach his right to a fair trial under article 6 of the European Convention on Human Rights (the Convention). Mr Kapri is an Albanian national. In 2001 he was present in the UK as an illegal immigrant. He is alleged to have been responsible for the murder of another Albanian national in London on 7 April 2001. The Metropolitan Police were unable to locate Mr Kapri, who had left the day after the murder for Glasgow and assumed a false Macedonian identity. They invited the Albanian authorities to prosecute him, since Albania has jurisdiction to prosecute in cases of homicide committed abroad where the victim and the alleged perpetrator are both Albanian. Mr Kapri was tried in his absence in Albania, convicted, and sentenced to 22 years imprisonment. On 3 January 2003 the decision against Mr Kapri became final. His whereabouts remained unknown to the Albanian authorities. In May 2010, the UK police became aware that he was living in Glasgow. On 22 June 2010, the Albanian authorities formally requested his extradition to Albania. Mr Kapri was arrested in Glasgow on 24 June 2010 and has been in custody ever since. On 20 January 2011, the Sheriff decided that there were no bars to extradition and ordered that the case be sent to the Scottish Ministers. The Scottish Ministers decided that they were not prohibited from ordering his extradition and on 15 March 2011 an extradition order was served on him. Mr Kapri appealed and lodged a devolution minute explaining the nature of his Convention rights challenge under the Scotland Act 1998. He was allowed to amend his Note of Appeal such that only two grounds of appeal were before the Appeal Court: ground (iv) (relating to the likelihood of a retrial in Albania) and a new ground (v) (relating to the alleged systemic corruption in the Albanian judicial system). He also lodged a devolution minute in relation to ground (v). However, on 2 February 2012, the Appeal Court refused to admit certain new evidence which arose under ground (v), effectively excluding that ground. Following a hearing on ground (iv), on 1 June 2012 the Appeal Court dismissed the appeal. It later granted permission to appeal to the Supreme Court. At the appeal hearing in the Supreme Court, Mr Kapri only relied on ground (v). The Supreme Court unanimously allows Mr Kapris appeal. The case will be returned to the Appeal Court for consideration of the question whether Mr Kapri would suffer a flagrant denial of justice if he were to be extradited to Albania [33, 34]. Lord Hope gives the judgment of the Court. The question is whether Mr Kapri would suffer a flagrant denial of justice if he were to be extradited to Albania. This threshold test is stringent. In a recent case, the European Court of Human Rights observed that until now it has been or would be met only in certain very exceptional circumstances. It will require a breach of the relevant right in the country to which the person is to be extradited which is so fundamental that it nullifies, or destroys the very essence of, the right. None of the cases in which the test has been described was concerned with a complaint of systemic judicial corruption as in the present case. It is not apparent that the only way it can be met, as it was in those cases, is by pointing to particular facts or circumstances affecting the case of the particular individual [29, 32]. It is hard to get at the true facts, but where allegations of corruption are widespread they must be taken seriously. When corruption affects the whole system, it may involve simple bribery of judges and court officials, or it may involve interference with the judicial system for political reasons of a much more insidious kind. Unjust convictions may result, just to keep the system going and keep prices up. Those who are familiar with the system may know what they need to do or pay to obtain a favourable decision but be quite unable to come up with what is needed. Those who are not familiar with it will be at an even greater disadvantage. Systemic corruption in a judicial system affects everyone who is subjected to it. No tribunal that operates within it can be relied upon to be independent and impartial. It is impossible to say that any individual who is returned to such a system will receive the right to a fair trial under article 6 of the Convention [28, 32]. The allegations that Mr Kapri makes in relation to the corruption of the Albanian judicial system are sufficiently serious for it to be necessary to have a closer look at the evidence on which Mr Kapri attempted to rely before the Appeal Court. The Supreme Court is not in a position to determine how systemic or widespread the problem now is. The evidence may not reflect the current position and further studies have since been conducted for the Lord Advocate. The case should be returned to the Appeal Court so that it can be provided with up to date information and reach a properly informed decision as to whether or not the threshold test is satisfied. The further delay that will result is regrettable, but it is plain that the matters must be properly investigated before a decision is taken as to whether the appellants extradition should go ahead. For the time being he must remain in custody [33 35]. A preliminary issue arose as to whether the question in this appeal raises a devolution issue in terms of the Scotland Act 1998 or a compatibility issue in terms of the Criminal Procedure (Scotland) Act 1995 as recently amended. The Court holds that it raises a devolution issue. The Lord Advocate does not act in his capacity as head of the prosecution service in Scotland when he performs functions under the Extradition Act 2003. Since the question in this appeal is not a question that arises in criminal proceedings it cannot raise a compatibility issue [23]. |
Mrs Sheila Davies and Mrs Maureen Mowat operate a childrens nursery known as All Stars Nursery in Aberdeen which was registered in 2004 by the Scottish Commission for the Regulation of Care (the Commission) under the Regulation of Care (Scotland) Act 2001 (the 2001 Act). The Commission became concerned at the way the nursery was being operated and in 2008 and again in 2009 it gave notice to the nursery under the 2001 Act of its decisions to implement its proposals to cancel the nurserys registration. The nursery disputed the factual basis for the Commissions concerns and appealed to the sheriff against the decisions. The appeals proceeded together before the sheriff, who, at a particular point in the proceedings, made a decision against the nursery on an evidential issue. The nursery appealed that decision to the Sheriff Principal [1 3, 5 7]. In the meantime, provisions of the Public Services Reform (Scotland) Act 2010 (the 2010 Act) had been enacted. The 2010 Act provided, among other things, that a new body, Social Care and Social Work Improvement Scotland (SCSWIS), would take over from the Commission the responsibility for the regulation of the day care of children. By virtue of a commencement order, as from 1 April 2011, SCSWIS was established, the Commission was dissolved, all the Commissions staff and property were transferred to SCSWIS, and Part 1 of the 2001 Act (which dealt with the regulation by the Commission of care services such as the nursery) was repealed. Two transitional orders (the No 1 Order and the No 2 Order) dealt with what was to happen to various outstanding actions and proceedings as a result of the handover. Article 2(1) of the No 2 Order dealt with appeals (such as the present) outstanding at 1 April 2011 and directed that Part 1 of the 2001 Act continued to apply for the purposes of the care services involved until the appeals had been finally determined [7, 8, 14 22]. At the appeal hearing on 12 April 2011 the nursery argued that the Commission could no longer be a party to the appeals, as it had been dissolved and replaced by SCSWIS. But SCSWIS had no title or interest to enter the proceedings, as the proceedings were concerned only with things that had been done under the 2001 Act before it came into existence. Therefore each of the Commissions decisions notified under the 2001 Act was a nullity. The Sheriff Principal held that, as the Commission had ceased to exist and there was no provision in either of the transitional orders that the Commissions decisions were to be treated as if they had been made by SCSWIS, those decisions could no longer have any meaning or effect [9, 11]. The Commission appealed to the Inner House of the Court of Session. In January 2012, by a majority, the First Division allowed the appeals on the basis that the effect of the transitional provisions was that the proceedings were still governed by the 2001 Act, that the Commission continued in existence for the purposes of the proceedings and that it was the proper respondent. Lord Marnoch, dissenting, thought that SCSWIS should be held to have taken over the conduct of the proceedings and be considered as the respondent as from 1 April 2011. Further notices were served on the nursery in 2012, culminating in parallel notices under the 2001 Act and the 2010 Act issued in December 2012 of decisions to implement proposals to cancel the nurserys registration. The nursery have challenged the validity of the notices and appealed against the decisions [12, 24]. The issues in the appeal are as follows. (1) Whether the Commission remains in existence for the purpose of conducting these proceedings, or whether SCSWIS took its place for that purpose after 1 April 2011. (2) validity of the 2012 notices. (3) The future conduct of these proceedings, given the lapse of time since the 2008 and 2009 decisions and the fact that the 2012 decisions are now also under appeal [23, 25]. The Supreme Court unanimously affirms the orders of the Inner House to the extent that they allowed the appeals against the Sheriff Principals orders and remits the case to the Inner House for any further orders that may be required [48]. The No 2 Order on its own leaves issue (1) unsolved. However, article 15 of the No 1 Order directs that, where an application for registration of a care service under the 2001 Act had not been determined by the Commission before 1 April 2011, the application is to be decided under the 2001 Act and that all references to the Commission are to be read as references to SCSWIS. This is echoed by the direction in article 9 of the No 1 Order that, where there is an outstanding complaint against the Commission or a care service as at 1 April 2011, the investigation of the complaint is to be carried out by SCSWIS. The reason for these directions must be that it was appreciated that, as the Commission was to be dissolved and all its staff and resources transferred to SCSWIS on 1 April 2011, the logical consequence was to transfer responsibility for the performance of the relevant functions after 1 April 2011 to SCSWIS [18, 20, 33, 34]. The gap in the No 2 Order can be filled by adopting the formula that article 15 of the No 1 Order uses and by then reading it into the direction given in the No 2 Order, so that it says that until the final determination of the appeal proceedings all references to the Commission in Part 1 of the 2001 Act are to be read as references to SCSWIS. There is here clearly a case of inadvertence. The No 2 Order needed to say how the provisions of Part 1 of the 2001 Act were to be put into effect after the Commission was dissolved. The intended solution, and the substance of the provision that would have been written in if the draftsman had spotted the point, is to be found in article 15(2) of the No 1 Order. There is a template there that is apt for use in this context too. To do otherwise would leave the dissolved Commission in existence for some of the purposes of Part 1 of the 2001 Act and require a reference to the Commission to be read as a reference to SCSWIS for others, which would be very untidy. It can safely be assumed that, if the draftsman had considered the point, he would have written the words he used in article 15(2) into article 2(1). This solution is also supported by article 19 of the No 1 Order, because its effect is that an appeal taken prior to 1 April 2011 against a decision notified by the Commission within 14 days prior to that date is thereafter to be treated as taken under the 2010 Act. It follows that the respondent in the appeal should be SCSWIS [36, 37]. On issue (2), in light of the decision on issue (1) and on a correct construction of the relevant provisions, the December 2012 notice that was issued by SCSWIS (albeit unnecessarily in the name of the Commission) under the 2001 Act is valid. The notice issued under the 2010 Act is invalid [41, 42]. On issue (3), there was considerable delay in the sheriff court and it has taken almost two years for issue (1) to be argued out in the appeal courts. The fact that the question whether decisions to cancel the registration of the nursery are the subject of two parallel appeal proceedings directed to the state of affairs in the nursery on significantly different dates is a cause for real concern. The time has come for the Supreme Court to intervene in order to minimise further delay and expense. In the very unusual circumstances of this case it is open to it to proceed on the basis that, if SCSWIS were to adhere to its 2008 and 2009 decisions, that would be an abuse of process and, in the interests of appropriate case management, to take steps now to prevent such an abuse. It would normally only be open to the Supreme Court to direct that a decision by the Commission shall not have effect after considering the merits of the appeal. But where a procedural sanction is being imposed for an abuse of process a consideration of the merits is unnecessary. The Supreme Court therefore directs that the 2008 and 2009 decisions shall not have effect. This means that the appeal proceedings against those decisions have been finally determined, and that the nursery must now be treated for all purposes as if it had been registered under the 2010 Act. The December 2012 decision notified under the 2001 Act must therefore be treated as if it had been notified under the 2010 Act. The appeal against the decision must now proceed under the 2010 Act and the aim should be to bring it to a conclusion as expeditiously as the administration of justice will allow [16, 43, 44, 46 48]. |
The appellant was born in Gaza in 1985. Having lived in Libya until about 2002, he then spent time in mainland Europe before arriving in the UK in April 2007. He subsequently claimed asylum and humanitarian protection. On 24 May 2007, the Home Secretary refused the appellants asylum and human rights claims. The letter sent by the Home Secretary recorded that a decision had been taken to remove the appellant from the UK and stated: If you do not appeal, or you appeal and the appeal is unsuccessful, you must leave the United Kingdom. If you do not leave voluntarily, directions will be given for your removal from the United Kingdom to Palestine National Authority. The appellant appealed the decision under section 82 (2) (h) of the Nationality, Immigration and Asylum Act 2002 (the 2002 Act). He did so on the grounds that the decision was not in accordance with the law within the meaning of section 84 (1) (e) of the 2002 Act. The appellant argued that this was so because directions for his removal to the Palestinian Territories could not lawfully be given under Schedule 2 of the Immigration Act 1971 (the 1971 Act), since paragraph 8 (1) (c) of Schedule 2 required that there was reason to believe that he would be admitted to the country chosen. The immigration judge accepted the evidence given in support of the appellant that, owing to his lack of documents and the fact that he did not have any living parents, he would not be admitted to the Palestinian Territories. However, the immigration judge rejected the appellants argument that this meant that the decision was not in accordance with the law under section 84 of the 2002 Act. The Immigration Tribunal and the Court of Appeal agreed with the immigration judge. The appellant appealed to the Supreme Court. The Supreme Court unanimously dismissed the appeal. The Court held that there is no right of appeal against an immigration decision under section 82 (2) (h) of the 2002 Act on the ground that the country or territory stated in the notice of the decision is not one that would satisfy the requirements of paragraph 8 (1) (c) of Schedule 2 to the 1971 Act. Sir John Dyson SCJ gave the courts judgment. Central to the appeal was the question of whether the proposal, in a notice of an immigration decision, of a particular country to which the appellant was to be removed was an integral part of that decision [para 21]. A clear distinction was drawn in section 84 of the 2002 Act between the decision that a person is to be removed from the United Kingdom and removal under removal directions [22]. This was a strong indication that the proposal of a destination country in an immigration decision was not an integral part of the decision itself. Section 82 of the 2002 Act referred to decisions that a person is to be removed from the United Kingdom. None of the decisions referred to mentioned a country of destination [24]. The fact that one type of decision mentioned in section 82 (2) (h) of the 2002 Act referred to a decision that an illegal entrant is to be removed from the United Kingdom by way of directions under paragraphs 8 to 10 of Schedule 2 to the Immigration Act 1971 (emphasis added) did not mean that an immigration decision must comply with Schedule 2 of the 1971 Act. The reference to the 1971 Act was merely descriptive of the type of decision appealed [25]. Not all of the decisions mentioned in section 82 required a proposed destination to be indicated to an applicant when the decision was communicated to him/her. If the proposal of a destination was an integral part of an immigration decision under section 82 (2) (h), it was difficult to see why Parliament did not provide that the proposal of a destination country should not also be an integral part of any decision from which removal directions will result [26]. It was acknowledged by both parties that there was no right of appeal against removal directions under the 2002 Act. The power to make removal directions was granted by Schedule 2 to the 1971 Act. The Appellant had acknowledged that there was no right of appeal against directions of a technical nature such as the specification of a particular ship or aircraft to be used for removal, but submitted that the specification of a particular destination was of a different character to these types of directions. It was, however, impossible to make the distinction sought by the Appellant [27]. The legislative background and explanatory notes to the 2002 Act supported the Courts conclusion [28 29]. There were also policy reasons which prevented the kind of challenge put forward by the Appellant [30 34]. The ability of the Secretary of State to give removal directions frequently depended on practical and operational issues that were inherently unsuitable for resolution at the time of the appeal against the decision. In the unlikely event that removal directions were given which could not be implemented as the person concerned could not enter the country of destination, judicial review was available. Regulation 5 (1)(b)(i) of the Immigration (Notices) Regulations 2003 (the Regulations), which stated that the notice of an immigration decision should state the country or territory to which it is proposed to remove the person, did not assist the Appellant [35 38]. The Appellant had submitted that the Regulations shed light on the meaning of the 2002 Act. However, the meaning of section 82 (2) (h) was clear and unambiguous and there was no need to use the Regulations to discern its meaning. The reason for the requirement in regulation 5 was that the proposed destination was needed in order to provide a focus for the issues which might arise under an applicants asylum and human rights claims. |
The Respondent (LMUK) operates the Nectar loyalty card scheme (the scheme). As part of the scheme, it enters into contracts with certain retailers (redeemers). Under such contracts, each redeemer is required to provide customers (collectors) with goods and services wholly or partly in exchange for Nectar points. That they do so is essential to the functioning of the scheme. The collectors earn such points through purchases made from other retailers (sponsors), who pay LMUK for allowing them to do so. Those payments are subject to VAT, on the basis that LMUK provides a taxable supply of services. The Respondent pays each redeemer a service charge for allowing customers to exchange points for goods or services. LMUK sought to deduct the VAT element of the service charge as input tax on the basis that, under the relevant EU legislation, the service charge was paid by LMUK to the redeemers for a service supplied to it for the purpose of its business. The Appellant (the Commissioners) maintained that under that legislation the service charge constituted third party consideration for the redeemers supply of goods and services to collectors, and that therefore LMUK could not deduct input tax. When the issue came before the House of Lords, it referred the question of how to characterise the service charge under EU law to the Court of Justice of the European Union (CJEU). The CJEU concluded that the service charges amounted, at least in part, to third party consideration. When the case returned to the Supreme Court, it nevertheless decided ([2013] UKSC 15) by a majority of three to two that LMUK was entitled to deduct the VAT element of the service charge. It did so on the basis that, having regard to the contractual relationships between LMUK, the sponsors, the collectors and the redeemers, the service charge was paid by LMUK to the redeemers for a service supplied to LMUK for the purpose of its business. The Court respectfully declined to follow the CJEUs characterisation of the service charge as third party consideration on the basis that the terms of the reference to it by the House of Lords had precluded the CJEU from considering all relevant aspects of the relationships between the parties involved in the Nectar scheme. The Court allowed the parties an opportunity to make written submissions as to the form of the order it should make. The Commissioners invited the Court to make a further reference to the CJEU on two principal grounds. First, they argued that a national court is obliged under EU law to make a further reference if it finds the ruling of the CJEU on the first reference to be incomplete or unsatisfactory. Second, they argued that there must be an issue of EU law raised in the present appeal on which a decision is necessary and which cannot be considered to be reasonably clear, as the Supreme Court decided the case by a narrow majority. LMUK opposed a further reference and invited the Court to dismiss the appeal. The Supreme Court unanimously refuses the Commissioners request for a further reference to the CJEU and dismisses the appeal. Lord Reed gives the judgment of the Court. The Court rejects the Commissioners first principal argument [4 5]. It notes that its previous judgment had not questioned the CJEUs ruling on any question of EU law, but rather had proceeded on the basis of a more comprehensive account of the facts than the CJEU was afforded. The Courts previous judgment had, first, considered that the CJEUs judgment had identified the relevant principles of law but had applied them to the incomplete factual scenario it had been presented with by the House of Lords and, second, applied those principles to the fuller factual account of which it was apprised. As such, no question of EU law now arises and a further reference is not necessary. The Court also rejects the Commissioners second principal argument [6]. It does so on the basis that, in the Courts previous judgment, the majority considered that the case could be decided by applying well established principles to the facts of the case. Further, the majority and the minority both acknowledged that the CJEU judgment dealt with the case on the basis that it raised no new point of law. The issues raised by the minority in the previous judgment, so far as relating to EU law, are not considered to require or justify a further reference to the CJEU. As a result of the above findings, the Court does not consider a further reference to the CJEU to be necessary. It also notes that it would be unfortunate if the position were otherwise, given that this litigation commenced in 2003 [7]. |
The question in this appeal is whether a person who has been detained by the police in Scotland on suspicion of having committed an offence has the right of access to a lawyer prior to being interviewed. Sections 14 and 15 of the Criminal Procedure (Scotland) Act 1995 allow a police constable to detain a person whom he has reasonable grounds for suspecting has committed or is committing an offence punishable by imprisonment. Detention may last for up to six hours. During detention, the police may put questions to the detainee, although the detainee is under no obligation to answer them and is to be informed at the outset of the detention that he is under no such obligation. The detainee is entitled to have a solicitor informed of his detention. However, in terms of the statute, the detainee has no right of access to a solicitor. The question is whether that is a breach of the right to a fair trial, recognised in Article 6(1) and 6(3)(c) of the European Convention of Human Rights (the ECHR). The Appellant was detained by the police on suspicion of serious assault and cautioned, in line with the statute, that he did not have to answer any question, beyond giving his name, address, date and place of birth and nationality. He was told that he was entitled to have a solicitor informed of his detention but he did not exercise that right. He was interviewed without a lawyer being present. During interview, the Appellant made a number of admissions. At trial the Crown led evidence of the police interview with the Appellant and relied on the admissions. The Appellant was convicted. In Salduz v Turkey (2008) 49 EHRR 421 the Grand Chamber of the European Court of Human Rights unanimously held that there had been a violation of Articles 6(1) and 6(3)(c) ECHR because Salduz had not had the benefit of legal advice when he was in police custody. In Her Majestys Advocate v McLean [2009] HCJAC 97, the High Court of Justiciary (sitting with seven judges) held that, notwithstanding the decision in Salduz, it was not a violation of Articles 6(1) & 6(3)(c) ECHR for the Crown to rely at trial on admissions made by a detainee while being interviewed without having had access to a solicitor. This was because the guarantees otherwise available in the Scottish legal system (and, in particular, the requirement that there be corroborated evidence in order to convict) were sufficient to provide for a fair trial. In the present case, relying on the decision in McLean, the appeal court refused the Appellant leave to appeal against his conviction. In effect, therefore, the present case is an appeal against the decision in McLean. The Supreme Court unanimously grants leave to appeal and then goes on to allow the appeal. The ECHR requires that a person who has been detained by the police has the right to have access to a lawyer prior to being interviewed, unless in the particular circumstances of the case there are compelling reasons to restrict that right. The Supreme Court remits the case to the High Court of Justiciary for further procedure. Lord Hope (Deputy President) delivers the leading judgment, with which Lord Mance agrees. Lord Rodger delivers a separate judgment, agreeing with Lord Hope but adding observations of his own. Lord Walker, Lord Brown, Lord Kerr and Sir John Dyson SCJ agree with the reasons given by both Lord Hope and Lord Rodger. The High Court of Justiciarys decision in McLean was entirely in line with previous domestic authority: [29] That authority cannot, however, survive in light of the European Court of Human Rights decision in Salduz and in subsequent cases. Properly interpreted, Salduz requires a detainee to have had access to a lawyer from the time of the first interview unless there are compelling reasons, in light of the particular circumstances of the case, to restrict that right: [35], [36], [38] & [70]. The exception applies only if there are particular circumstances in the individual case and does not allow a systematic departure from the rule such as that set up by the 1995 Act: [41]. The rule in Salduz is based on the right not to incriminate oneself: [33] & [67]. This court should follow Salduz. Indeed, it has no real option but to do so: [93]. Previous cases have established that the court should follow any clear and consistent jurisprudence of the Strasbourg court: [45]. Salduz is a decision of the Grand Chamber, now firmly established in the European Court of Human Rights case law: [48]. The majority of those member states which prior to Salduz did not afford a right to legal representation at interview (Belgium, France, the Netherlands and Ireland) are reforming their laws to bring them into line with the Conventions requirements: [49]. The guarantees otherwise offered by the Scottish legal system (in particular corroboration) are commendable but are beside the point. They do not address the European Courts concern, which is with self incrimination: [50], [66] & [92]. The system of detention under section 14 and 15 of the 1995 Act was expressly designed to deny an individual, reasonably suspected of committing a crime, a right to obtain legal advice when questioned in the hope that, without legal advice, the individual would be more likely to incriminate himself during questioning: [91]. That view of where the balance is to be struck between the public interest and the rights of the accused is irreconcilable with Convention rights: [51]. There is not the remotest chance that the European Court would hold that, because of the other protections that Scots law provides for accused persons, the Scottish system could omit the safeguard of allowing legal advice prior to interview: [93]. The Lord Advocate could not rely upon section 57(3) of the Scotland Act 1998 to prevent her act of leading the evidence of the interview from being unlawful. Section 57(3) would apply where, because of another provision of legislation, the Lord Advocate could not have acted any differently or where she acted to give effect to another provision which could not be read in a way which complies with Convention rights. Neither applied here because of the drafting of section 14(7) of the 1995 Act: [54] & [55]. This decision does not permit closed cases to be re opened. Although a judicial decision has retrospective effect, it does not affect cases which have been finally determined (namely, where an accused was convicted and did not appeal within the relevant time limits, or did appeal and the appeal has been finally disposed of). The decision will, however, affect cases which have not yet gone to trial, where the trial is still in progress or where an appeal has been brought in time and is not yet concluded. The Scottish Criminal Cases Review Commission, if it is asked to do so, will have to determine whether it is in the public interest for cases which have already been finally determined to be referred to the High Court, which will in turn have to decide how to deal with such cases, if a reference is made: [60] [62]; [99] [103]. |
This appeal raises two issues of tax law. The first (the procedural issue), of general importance to the self assessment regime, concerns the scope of arguments which may be advanced by HMRC in a taxpayers appeal against a closure notice which the HMRC issues to conclude its enquiry into a tax return. The second issue (the expenditure issue) concerns the proper approach to determining whether expenditure has been incurred for the purposes of the Capital Allowances Act 2001. The case concerns the tax consequences of the scheme used by MCashback Limited (MCashback) to raise finance to enable it to roll out M Rewards, a software package which it had developed and which enabled manufacturers to promote products to customers by offering free mobile phone airtime. On the advice of Tower Group plc (Tower), it was decided to raise funds by selling rights to the software, via software licence agreements (SLAs), to four Limited Liability Partnerships to be set up as part of the financing scheme. Tower personnel were founder members of the LLPs and negotiated the SLAs with MCashback. The SLAs provided for each LLP to receive a proportion of the clearing fees which manufacturers would pay in respect of each transaction via the M Rewards system. For the purposes of this litigation, the situation of Tower MCashback 2 LLP (LLP2) has been taken as representative of the other LLPs. LLP 2 entered an SLA with MCashback, under which it was to pay 27.5m for a licence of part of the M Rewards system. LLP2 was entitled to 2.5% of the gross clearance fees received from exploitation of M Rewards. LLP2 obtained the funds required to pay the consideration under the SLA (and the associated professional fees) from investors, who became investor members of LLP2. They contributed 25% from their own funds and obtained the remaining 75% from bank borrowing, on uncommercial terms. Janus Holdings Ltd (Janus) lent the required sum to a special purpose vehicle set up by Tower, which made interest free, non recourse loans to the investor members. MCashback was obliged to deposit approximately 82% of the consideration due to it in terms of the SLA as indirect security for the investor members borrowing from Janus. These sums were placed on security deposit with R&D Investments Ltd (R&D), which R&D in turn deposited with Janus as security for Januss loan to the SPV. LLP2 claimed 27.5m first year capital allowances for the 2004/05 tax year, the amount of consideration set out in the SLA. Because of the way LLPs are taxed, the investor members would take the benefit of these allowances if the claim is successful. One of the conditions for entitlement to capital allowances is that a person incurs qualifying expenditure: section 11 Capital Allowances Act 2001. Expenditure is qualifying expenditure if, amongst other things, it is capital expenditure on the provision of plant or machinery, which includes software or rights to software. On 30 June 2005 HMRC issued a notice of enquiry into LLP 2s partnership return. Attention initially focused on section 45(4) CAA 2001, which withholds first year allowances for expenditure on software rights in certain circumstances. After a lengthy period of enquiry, during which correspondence was exchanged about the application of section 45(4), HMRC issued closure notices (under s28B Taxes Management Act 1970) which stated that, as previously indicated the claim for relief under section 45 CAA 2001 is excessive and amended the partnership return so that the capital allowances claimed, and allowable loss, were nil. The LLPs appealed against the closure notices. Before the Special Commissioner, HMRC abandoned the argument that the claims were disallowed by section 45(4) CAA and sought instead to argue that the full extent of the consideration under the SLAs was not expenditure incurred on software. The Special Commissioner decided the procedural point in favour of the HMRC, allowing them to advance this argument, and, on the expenditure issue, disallowed 75% of LLP2s claims. On appeal, the High Court allowed the LLPs appeals on the procedural issue. It would also have allowed the LLPs appeals on the expenditure issue, had the point arisen for decision. The Court of Appeal, by majority, reversed the High Court on the procedural issue (Arden LJ dissenting), but agreed with the High Court on the expenditure issue. HMRC appeals against the determination of the expenditure issue and the LLPs cross appeal against the determination of the procedural issue. The Supreme Court unanimously allows the HMRCs appeal and dismisses the LLPs cross appeal. Lord Walker issues the leading judgment and Lord Hope a short, concurring judgment. The other members of the Court agree with both. It therefore holds that the HMRC could advance alternative arguments on the expenditure issue, and that all of the consideration provided for in the SLA was not expenditure incurred on the provision of software. The Court directs that the closure notices be amended to allow only 25% of the first year allowances claimed. Procedural issue The Special Commissioners are free to entertain legal arguments which played no part in reaching the conclusions set out in the closure notice. The scope and subject matter of the appeal will, however, be defined by the conclusions stated in the closure notice and any amendments made to the return. The Court emphasises that this is not to be taken as encouragement to HMRC to draft every closure notice in wide and uninformative terms. There is, however, a public interest in taxpayers paying the correct amount of tax and it is one of the duties of the Commissioners to have regard to that public interest. Any potential unfairness to the taxpayer can be avoided by proper exercise of case management powers during the appeal: [15] [18]; [83] [85]. Expenditure issue The court considers two previous decisions of the House of Lords: Ensign Tankers (Leasing) Ltd v Stokes [1992] 1 AC 655 and Barclays Mercantile Business Finance Ltd v Mawson [2004] UKHL 51. Both remain good law: [72] It is not enough for HMRC, in attacking a scheme of this sort, simply to point to money going round in a circle: [77] Nor, however, is it the law as the judge had held that unless one finds the transaction in this case to be a sham, the only possible conclusion is that the whole of the consideration in the SLA was expenditure incurred on the provision of software. In the context of a complex pre ordained transaction, the courts task is to test the facts, realistically viewed, against the statutory test, purposively construed: [67] Entitlement to capital allowances requires there to have been real expenditure for the real purpose of acquiring plant or machinery for use in a trade: [80]. Concerns about the valuation of what is being acquired and the commercial soundness of the transactions are relevant. The fact that rights in the software had been transferred by MCashback to LLP2 demonstrated the reality of some expenditure on acquiring those rights, but did not conclusively show that the whole of consideration in the SLA was expenditure for that purpose. The Special Commissioner found that the market value of the software was very materially below 27.5m. He had also held that there was little chance that the members loan would be repaid in full within ten years as much as 60% might be unpaid, and waived, at the end of that period. These findings justified the conclusion that the money which the investor members borrowed was not used, in any meaningful sense, as expenditure in the acquisition of software rights. Instead, it went in a loop back to the lender in order to enable the LLPs to indulge in a tax avoidance scheme: [75] |
On 25 November 1992, Pearse Jordan was shot and killed by a member of the Royal Ulster Constabulary. In 1994, his father, Hugh Jordan, made an application to the European Court of Human Rights (ECtHR) complaining that the failure to carry out a prompt and effective investigation into his sons death was a violation of article 2 of the European Convention on Human Rights (ECHR). An inquest commenced on 4 January 1995 but was adjourned shortly afterwards. On 4 May 2001, in Jordan v United Kingdom (2003) 37 EHRR 2, the ECtHR upheld the complaint and awarded damages of 10,000. A fresh inquest into Pearse Jordans death commenced on 24 September 2012, and a verdict was delivered on 26 October 2012, but Hugh Jorden then brought proceedings for judicial review, which resulted in the verdict being quashed: In re Jordans Application for Judicial Review [2014] NIQB 11. In 2013, Hugh Jordan brought the present proceedings for judicial review seeking declarations that the Police Service of Northern Ireland (PSNI) and the Coroner had violated his article 2 rights by delaying the commencement of the inquest and an award of damages under section 8 of the Human Rights Act 1998 (HRA) in respect of the delay from 4 May 2001 until 24 September 2012. At first instance, Stephens J upheld the claim against the PSNI and awarded damages of 7,500 but dismissed the claim against the Coroner. The PSNI appealed against the declaration and damages award, and Hugh Jordan cross appealed against the dismissal of his claim against the Coroner. On 22 September 2015, the Court of Appeal ordered that the proceedings should be stayed until after the inquest had been completed. That order was subsequently withdrawn, and an order in similar terms was made on 10 June 2017, which Mr Jordan appealed against. Meanwhile, a further inquest had commenced on 22 February 2016, and a verdict was delivered on 9 November 2016. The stay was lifted on 23 October 2017. The Supreme Court unanimously allows the appeal. Lord Reed, with whom the rest of the Court agrees, delivers the judgment. The Court of Appeal in Northern Ireland held that in so called legacy cases, which concern deaths that occurred in Northern Ireland during the Troubles, the issue of damages against any public authority for breach of the adjectival obligation in article 2 ECHR [i.e. the obligation to investigate the circumstances of the death] ought to be dealt with once the inquest has finally been determined. This appeared to constitute general guidance, and, consistently with this, the Court of Appeal ordered that the claim for damages for breach of the article 2 procedural requirement that an inquest be conducted promptly should not be brought until the inquest has finally been determined. [16] [17] The appeal was against this part of the Court of Appeals order. [20] After the hearing of this appeal, the Court of Appeal, in another legacy case, In Re McCords Application for Judicial Review, clarified the remarks in Jordan, so that it appears that it intends the guidance to be confined to cases where damages are the only outstanding issue and where an inquest can be expected to begin in the near future, if not already under way. Further, the appropriateness of the stay should be kept under review, and it should be lifted if the claim for damages will otherwise not be determined within a reasonable time. [24] Lord Reed states that it must be borne in mind at the outset that, in cases of the present kind, it is the delay itself which constitutes a breach of the claimants Convention rights and that [t]he breach does not crystallise only after the inquest has been concluded. [25] Section 7(1)(a) of the HRA, pursuant to which claims arising from such delay are brought, confers a statutory right on any person to bring proceedings against a public authority that acted in a way which was incompatible with their Convention right. [26] No court can take that statutory right away. [27] However, it can exercise powers of case management, including ordering a stay, but, when doing so, three important aspects of Convention rights must be borne in mind. [28] First, Convention rights must be practical and effective. [29] Second, a stay will be unlawful if it results in a breach of the reasonable time guarantee in article 6 of the Convention. [31] [32] Third, a stay also engages another aspect of article 6, namely the guarantee of an effective right of access to a court. It must therefore pursue a legitimate aim, and there must be a reasonable relationship of proportionality between the means employed and the aim sought to be achieved. [33] This requires an assessment of the weight of the competing interests in the particular case: the risk of a proliferation of litigation, the avoidance of which was the legitimate aim pursued by the stay, against the importance to the claimant of obtaining monetary redress for the violation of his or her Convention rights without avoidable delay. There may be factors in individual cases which make the expeditious determination of the claim particularly important. The present case, for example, illustrates the importance of avoiding delay where proceedings are brought by claimants who are elderly or infirm, since Hugh Jordans health has so deteriorated that his wife had to take over the conduct of these proceedings. [37] On its face, the guidance given by the Court of Appeal in the present case involved no assessment of proportionality or consideration of individual circumstances. It was also liable to render the article 2 procedural right ineffective resulting in breaches of the reasonable time guarantee. [39] However, the McCord judgment resolved this. Nevertheless, it remains necessary to consider whether that general guidance should be applied in the circumstances of an individual case. In the present case, the stay was imposed without any evident consideration of its proportionality. It is uncertain whether it would have been imposed if proportionality had been considered in the light of all the relevant facts, including Hugh Jordans declining health. The appeal is therefore allowed. [41] [42] |
Dr Williams claims to be the victim of a fraud instigated by the Nigerian State Security Services which occurred in 1986. His case is that he was induced to serve as guarantor of a bogus transaction for the importation of foodstuffs into Nigeria. In connection with that transaction, he paid $6,520,190 (USD) to an English solicitor, Mr Reuben Gale, to be held on trust for him on terms that it should not be released until certain funds had been made available to him in Nigeria. Dr Williams says that in fraudulent breach of that trust, Mr Gale, knowing that those funds were not available to him in Nigeria, paid out $6,020,190 of the money to an account held by the Central Bank of Nigeria with Midland Bank in London, and that he pocketed the remaining $500,000. The Central Bank is said to have been party to Mr Gales fraud. Dr. Williams claimed against the Central Bank on the basis that the Bank was a constructive trustee. The Bank was alleged to have dishonestly assisted Mr. Gale to pay away the $6,520,190, and to have received the $6,020,190 knowing that it represented trust funds paid to it in breach of trust. There was also a claim to trace to the latter sum into the Banks assets. The question on this appeal is whether the order permitting Dr Williams to serve the claim form and particulars of claim on the Central Bank in Nigeria should be set aside and a declaration made that the English court lacks, or at any rate should not exercise, jurisdiction in respect of it. That in turn depends on whether there is a serious issue to be tried [1]. This depends on whether Dr. Williams claims are time barred under the Limitation Act 1980. It is common ground that, in so far as any such trust claim is subject to statutory limitation, the limitation period has expired. The issue turns on whether these claims were exempt from statutory limitation by virtue of section 21 of the Limitation Act 1980 [2]. Section 21 provides that no period of limitation shall apply to (a) an action by a beneficiary under a trust, in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy or (b) recovery from the trustee of trust property or the proceeds of trust property [3]. Two questions arose. First, whether a stranger to a trust, who dishonestly assists in a breach of trust or knowingly receives trust property paid out in breach of trust, is a trustee for the purposes of the Act. If the answer to that question is No, then the second question is, whether an action in respect of any fraudulent breach of trust to which the trustee was a party is limited to an action against the trustee or includes an action against the stranger [4]. By a majority the Supreme Court allows the appeal and declares that the English court has no jurisdiction in respect of this action. The order for service out of jurisdiction and the service itself must be set aside [38]. Lord Sumption (with whom Lord Neuberger and Lord Hughes agree), writing the lead judgment, holds that the 1986 trust claims are time barred essentially because section 21 of the Limitation Act is concerned only with actions against true trustees and the Central Bank is not a true trustee. This is because a constructive trust of the kind alleged against the Bank is not a true trust but merely a basis for granting equitable relief [6]. Lord Sumption distinguishes between two categories of constructive trusts, namely one that comprises de facto trustees and cases of ancillary liability [8]. The distinction is relevant because the rationale behind the original rule that trustees are accountable to their beneficiaries without limitation of time will not necessarily apply to every kind of constructive trust. Trust assets are assets lawfully vested in a trustee. If the trustee misapplies the assets, equity ignores the misapplication and simply holds him to account for the assets as if he had acted in accordance with his trust. There is nothing to make time start running against the beneficiary. Persons who are under a purely ancillary liability are in a different position to this. Their acts and their receipt of the assets are at all times adverse to both the true trustees and the beneficiaries. They are liable to account in equity, but as wrongdoers, and not as true trustees. [13 31]. Once the first question is answered in the negative, the second question then arises whether the Central Bank is nevertheless a party sued in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy for the purposes of the Limitation Act. The majority hold that it is not. Section 21(3) is concerned only with actions against trustees on account of their own fraud or fraudulent breach of trust [32 36]. Lord Neuberger (with whom Lord Hughes also agrees) agrees with Lord Sumption that the appeal should be allowed [42]. On the first question Lord Neuberger concludes that a trustee does not include a party who is liable to account in equity simply because he was a dishonest assister and/or a knowing recipient. This is because such a party is not a constructive trustee and a trust and trustee were, pursuant to the legislation, meant to have orthodox meanings [90]. On the second question Lord Neuberger would hold that the narrower meaning of section 21(1)(a) is to be preferred, namely that it only applies to claims brought against the trustee who was a party or privy to the fraud or fraudulent breach of trust [92 & 113]. In a dissenting judgment, Lord Mance considers that the appeal by the Central Bank should be dismissed [163]. Lord Mance takes the view that Dr Williams claim against the Central Bank as an alleged dishonest assister falls within section 21(1)(a) and is not time barred because Parliament intended to treat dishonest assisters as in the same position as regards limitation as the dishonest trustees they assist [157]. As to Dr Williams claim for knowing receipt by the Central Bank, Lord Mance does not agree with Lord Neuberger that the phrases trust and trustee are limited in meaning so as to exclude a knowing receipt [161] and therefore considers that Dr Williams should also succeed on this point. In an additional dissenting judgment, Lord Clarke agrees with the majority that the central Bank is not a trustee within the meaning of section 21(1)(a) [165]. Further, he agrees with Lord Neuberger that a knowing assister is not a constructive trustee [166]. However, with regard to the second question in this appeal, Lord Clarke would hold that the action falls within the ordinary meaning of the language of the statute [171] and would thus dismiss the Central Banks appeal on this point [182]. |
Local housing authorities have statutory obligations under Part VII of the Housing Act 1996 (the 1996 Act) to provide assistance to people who are homeless in certain circumstances. When an application for such assistance is received, the authority will carry out investigations under s.184 of the 1996 Act to ascertain whether the applicant qualifies for local authority housing. Under s.188 of the 1996 Act, the authority must provide the applicant with interim accommodation (s.188 accommodation) during the time it takes to carry out these investigations [1]. The two appellants in this case were children of families provided with s.188 accommodation while their housing applications were considered. CNs mother JN was granted a licence to occupy a privately owned property by the London Borough of Lewisham (Lewisham) in November 2011 [2]. From November 2012, ZH and his mother FI occupied s.188 accommodation, in the form of a flat owned by a private company, under a licence granted by the London Borough of Newham (Newham) [6]. Both JN and FIs substantive housing applications were refused, at which point the obligation on Lewisham and Newham (the authorities) to provide s.188 accommodation ended and JN and FI were told to vacate the properties; JN in May 2012 [5] and FI in March 2013 [6]. CN and ZH commenced separate judicial review proceedings challenging these evictions [9]. They argued that even after the s.188 duty ceased, the authorities could not lawfully evict them from their s.188 accommodation without first giving notice and obtaining a court order. They relied on ss.3(1) and 3(2B) of the Protection from Eviction Act 1977 (PEA) which together provide that in relation to any premises occupied as a dwelling under a licence, other than an excluded licence, where the licence has come to an end but the occupier continues to reside in the premises it shall not be lawful for the owner to enforce against the occupier, otherwise than by proceedings in the court, his right to recover possession of the premises. Section 5(1A) PEA further provides that no less than four weeks written notice must be given to end a periodic licence to occupy premises as a dwelling, other than an excluded licence [19]. The excluded licences not protected by ss.3 and 5 are listed at s.3A PEA; the list does not include s.188 accommodation [18]. The two judicial review claims were given permission in the High Court and transferred to the Court of Appeal, where they were heard together [8]. On 11 July 2013 the Court of Appeal dismissed the claims [9]. The Supreme Court dismisses the appeal by a majority of five to two. It holds that Newham and Lewisham are entitled to evict the appellants from s.188 accommodation without first obtaining a court order. Lord Hodge (with whom Lord Wilson, Lord Clarke and Lord Toulson agree) gives the main judgment. Lord Carnwath gives a concurring judgment. Lord Neuberger and Lady Hale give dissenting judgments. Is s.188 accommodation occupied as a dwelling under a licence for the purposes of ss.3 and 5 PEA? Lord Hodge holds that the word dwelling does not have a technical meaning but suggests a greater degree of settled occupation than residence and can be equated with ones home [45]. It bears the same meaning in PEA as in predecessor legislation (the Rent Acts) [26]. On an assessment of the legal and factual context, a licence to occupy s.188 accommodation is not granted for the purpose of using the premises as a dwelling. First, the statutory context is inconsistent with such a purpose; s.188 imposes a low threshold duty on a local housing authority to provide interim accommodation (not a home or fixed abode) for a short and determinate period only [33]. Secondly, such a licence is granted on a day to day basis allowing the authority to transfer the applicant to alternative accommodation at short notice [34]. Thirdly, (although this is not of itself determinative) to hold otherwise would hamper the operation of the 1996 Act by introducing delays for court proceedings to effect evictions from accommodation needed for other homeless applicants [35]. Further, the absence of an express exclusion in s.3A PEA for s.188 accommodation does not mean that such accommodation falls within s.3 PEA [49]. Parliament sought confirm excluded tenancies and licences for the avoidance of doubt but did not intend to thereby extend protection to accommodation that would not have classified as a dwelling under the Rent Acts [47]. Lord Carnwath adds that settled practice may, in appropriate circumstances, be an aid to statutory interpretation [95]; were the issues more finely balanced, the fact that the Court of Appeals statutory interpretation in Mohammed v Manek (1995) 27 HLR 439 has been adopted in departmental guidance would be an additional reason to dismiss the appeal [98]. In dissenting judgments, Lord Neuberger [128] and Lady Hale [158] hold that in the context of PEA 1977 dwelling has at least as broad a meaning as residence. Lord Neuberger considers that Sections 3 and 5 PEA should be accorded a wide rather than a narrow effect as they reflect a policy that people who have been lawfully living in premises should not be summarily evicted [135]. Premises may be occupied as a dwelling notwithstanding said occupation is short term, provisional or precarious [136]. This interpretation is supported by the absence of a specific exclusion in s.3A PEA [139]. Does Article 8 ECHR require the authorities to obtain court orders before carrying out evictions? The parties were in agreement that the appellants Article 8 rights were engaged [60]. Lord Hodge (with whom Lord Neuberger, Lord Wilson, Lord Clarke, Lord Carnwath and Lord Toulson agree) holds that the interference with the appellants Article 8 rights was objectively justified. The termination of an unsuccessful applicants licence to occupy s.188 accommodation is in accordance with the law and pursues the legitimate aim of inter alia accommodating other homeless applicants [67]. Recovery of possession is proportionate to that aim because in the context of limited resources there can generally be no justification for preferring those whose claims have been investigated and rejected [68]. The procedural safeguards contained in the 1996 Act, the Children Act 1989, and by way of judicial review, together afford fair procedure such as to comply with the requirements of Article 8 [64]; there is no need to impose the additional hurdle of obtaining a court order [68]. (As Lady Hale finds for the appellants as a matter of statutory interpretation, in her judgment the Article 8 issue does not arise [168].) |
These appeals relate to the proper interpretation of paragraph 49 of the National Planning Policy Framework (NPPF), as well as the NPPFs relationship with the statutory development plan. Part 2 of the Planning and Compulsory Purchase Act 2004 requires local planning authorities to prepare a development plan. In preparing local development documents authorities must have regard to national policies and advice issued by the Secretary of State, pursuant to section 19(2). Section 38(6) of the 2004 Act and section 70(2) of the Town and Country Planning Act 1990 provide for the development plan to be taken into account in the handling of planning applications. The NPPF was published on 27 March 2012. Paragraph 14 of the Framework deals with the presumption in favour of sustainable development, and includes the tilted balance provision: that where the development plan is silent or policies out of date, permission should be granted unless any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole. Paragraph 49 adds that: Relevant policies for the supply of housing should not be considered up to date if the local planning authority cannot demonstrate a five year supply of deliverable housing sites. In Suffolk Coastal the council refused planning permission for a development of 26 houses in Yoxford, upheld by the inspector on appeal. The inspector considered which local policies were relevant policies for the supply of housing within the meaning of paragraph 49 of the NPPF. The High Court held that he had erred in thinking that paragraph 49 only applied to policies dealing with the positive provision of housing and so quashed his refusal. Its decision was confirmed by the Court of Appeal. In Richborough Estates the council failed to determine the application, and Richborough Estates appeal was allowed by the inspector. The council succeeded in the High Court on the basis that the inspector erred in treating one of the local policies as a relevant policy under paragraph 49 and in seeking to divide the policy, so as to apply it in part only. That decision was reversed by the Court of Appeal. The Supreme Court unanimously dismisses both councils appeals. Lord Carnwath gives the lead judgment, with which Lord Neuberger, Lord Clarke and Lord Hodge agree. Lord Gill gives a concurring judgment, with which Lord Neuberger, Lord Clarke and Lord Hodge agree. The Secretary of States power to issue national policy guidance such as the NPPF derives, expressly or by implication, from the planning Acts which give him overall responsibility for oversight of the planning system. This is reflected both in specific requirements and more generally in his power to intervene in many aspects of the planning process [19 20]. The policy making role should not, however, be overstated: the NPPF itself makes clear that in respect of the determination of planning applications (by contrast with plan making) it is not more than guidance for the purposes of section 70(2) of the 1990 Act. It does not displace the primacy of the statutory development plan [21]. The correct approach to the interpretation of a statutory development plan was discussed by the Supreme Court in Tesco Stores Ltd v Dundee City Council [2012] UKSC 13 [23]. It is important that the role of the court is not overstated: in Tesco Stores Lord Reed identified the interpretation of the word suitable as the short point to determine, and further recognised that some policies in the development plan may be expressed in broader terms and not require the same level of legal analysis [24]. These are statements of policy whether in a development plan or in a non statutory statement such as the NPPF and must be read in that light; they are not statutory texts [74]. Lord Gill adds that the NPPF expresses general principles applied by more specific prescriptions. These must always be interpreted in the overall context of the guidance document [75]. Furthermore, the courts should respect the expertise of the specialist planning inspectors, and start at least from the presumption that they will have understood the policy framework correctly. Their position is in some ways analogous to that of expert tribunals, in respect of which the courts have cautioned against undue intervention by the courts in policy judgments within their areas of specialist competence [25]. Recourse to the courts may sometimes be needed to resolve distinct issues of law, or to ensure consistency of interpretation in relation to specific policies. However, it is important to distinguish clearly between issues of interpretation of policy, appropriate for judicial analysis, and issues of judgement in the application of that policy [26]. Lord Gill describes the proper role of the courts as interpreting a policy or the NPPF where its meaning is contested, while that of the planning authority is to apply the policy or guidance to the facts of the individual case [72, 73]. The primary purpose of paragraph 49 of the NPPF is simply to act as a trigger to the operation of the tilted balance under paragraph 14 [54]. Paragraph 14 unlike paragraph 49 is not concerned solely with housing policy and needs to work for other forms of development covered by the development plan. For example, whether a relevant policy for the supply of employment land becomes out of date is a matter of planning judgment [55]. Housing policies deemed out of date under paragraph 49 must also be read in that light and it is not necessary to label other policies as out of date merely in order to determine the weight to be given to them under paragraph 14 [56]. Paragraph 49 appears in a group of paragraphs dealing with the delivery of housing, with paragraph 47 providing the objective of boosting the housing supply [76, 80]. In that context the words policies for the supply of housing indicate the category of policies with which we are concerned: the word for simply indicates the purpose of the policies in question. There is no justification for substituting the word affecting which has a different emphasis [57, 82]. Although this can be regarded as adopting the narrow meaning, it should not be seen as leading to the need for a legalistic exercise to decide whether individual policies do or do not come within the expression. The important question is not how to define the individual policies, but whether the result is a five year supply in accordance with the objectives set by paragraph 47 [59]. On both appeals the Supreme Court reaches the same result as the Court of Appeal [62, 86]: in Richborough Estates the inspector erred in treating policy NE.2 as a policy for the supply of housing under paragraph 49, but that did not detract materially from the force of his reasoning [63]. In Suffolk Coastal the inspectors approach was open to criticism because his categorisation of SP 19 and SP 27 was inappropriate and unnecessary, rather than erroneous as the Court of Appeal held. It nevertheless gave rise to an error of law insofar as it may have distorted his approach to paragraph 14 [65, 68]. |
Scottish Widows Plc (Scottish Widows) is a life assurance company. It was established in 2000, when it acquired the business of Scottish Widows Fund and Life Assurance Society (the Society) under a scheme of transfer which had been approved by the Court of Session in Scotland. Scottish Widows acquired assets under the scheme which had an approximate value of 25bn, and it became subject to actuarial liabilities of approximately 19bn. Members of the Society received compensation of approximately 5.8bn, which represented the surplus of the Societys assets over its liabilities at the time of the transfer. The compensation was paid by Scottish Widows holding company, in return for the members of the Society giving up their right to participate in the surplus. The scheme provided that Scottish Widows was to establish and maintain a Long Term Business Fund (LTBF) to fund its long term insurance business. It also provided that there was to be a memorandum account within the LTBF, called the Capital Reserve. This was said to represent the value of shareholders capital within the LTBF. Life assurance companies are required to submit annual regulatory returns, in particular to demonstrate solvency. Various forms are prescribed for these returns. One these is known as Form 40, which is a revenue account in respect of the LTBF. In the years following transfer the value of the assets of Scottish Widows LTBF fell substantially, principally because of falls in the stock markets. To cover those losses and to allow for distributions to policyholders, Scottish Widows brought into account amounts on Form 40 for each of the accounting periods 2000, 2001 and 2002. These amounts were recorded in line 15 of the relevant Form 40s. They were described as transfers from the Capital Reserve. Section 83 Finance Act 1989 provides for certain sums to be brought into account in the computation of the profits of an insurance company in respect of its life assurance business for the purposes of corporation tax. In the terms that were in force between 2000 and 2003 section 83(2) provided that: [T]he following items, as brought into account for the period of account (and not otherwise), shall be taken into account as receipts of the period (a) the companys investment income from the assets of its long term business fund, and (b) any increase in value (whether realised or not) of those assets. Section 83(3)(a) made provision for ascertaining whether or to what extent a company had incurred a loss in respect of its life assurance business where an amount was added to an insurance companys long term business fund as part of or in connection with a transfer of business to that company. The Revenue maintained that the amounts to be brought into account as receipts for the computation of profits or losses for tax purposes under section 83(2)(b) or, in the alternative, under section 83(3)(a) were the amounts shown in line 15 on Form 40. It maintained that the reference to a difference in value as brought into account directed attention to the figures that had been entered on Form 40, not the market value of the assets of the LTBF. Scottish Widows argued that the words increase in value in section 83(2)(b) meant an increase in the actual value of actual assets, and that the words as brought into account were concerned with when the increase was brought into account, not the extent of the increase. Here the value of the assets of the LTBF had fallen during each of the relevant periods. So there was no increase which could be brought into account. The parties referred the question whether, in computing the Case I profit or loss of Scottish Widows for the accounting periods ending in 2000, 2001 and 2002, the amounts that fell to be taken into account as receipts to the Special Commissioners were the amounts shown in line 15 of Form 40. It was agreed that, if Scottish Widows argument that it is actual values and not those amounts that should be taken into account is correct, it will have allowable losses in respect of those years of 28.7m, 612.6m and 431.3m. The Special Commissioners answered the question in the affirmative. They held that, although the amounts shown on Form 40 were not to be brought into account by section 83(2), they were covered by section 83(3)(a). The Inner House unanimously dismissed the Revenues appeal against the decision on section 83(2) and by majority (Lord Emslie dissenting) dismissed Scottish Widows cross appeal against the decision in respect of section 83(3)(a). Scottish Widows appealed and the Revenue cross appealed. The Supreme Court unanimously allows the Revenues cross appeal and holds that the amounts that were to be taken into account as receipts by virtue of section 83(2) were the amounts shown on Form 40. It therefore answers the question that was referred to the Special Commissioners in the affirmative. Lord Hope and Lord Walker both give detailed judgments. Lady Hale and Lord Neuberger give shorter judgments, agreeing with each other and with Lord Hope and Lord Walker. Lord Clarke agrees with all of the judgments. Although the applicable statutory provisions had been amended on various occasions, it was not helpful to look at their legislative history. That should only be done where there is an interpretative difficulty which classical methods of construction cannot solve. The proper approach was to concentrate on the wording of sections 83(2) and (3)(a) as they were during the relevant accounting periods: [15], [73], [122] [124]. Lord Walker analyses in detail the regulatory and taxation regime which applies to life assurance companies and the particular features of the demutualisation scheme so as to provide a backdrop to the statutory construction: [40] [71]. There were two particularly important points. One was that when completing regulatory returns, book values could be used, and that an insurer enjoyed a certain freedom in determining what amount of its actuarial surplus to recognise in its returns: [82] [86]. It was also particularly important to appreciate the nature of the Capital Reserve. It was not a fund of particular assets, separate from the LTBF, but was merely an accounting category recording an initial value within the LTBF: [87] [91] [101]. The key to interpreting section 83(2) was the phrase as brought into account and, in particular, the use of the word as: [22], [76], [116], [125]. This demonstrated that the computation must proceed on basis of what was actually entered on the appropriate regulatory account, in this case the form known as Form 40. It was important that, when completing its returns, an insurance company should be permitted to use book values: [20]. The various arguments which were advanced in favour of Scottish Widows construction, based on general principles of interpreting tax legislation ([24] [26], [101] [102]), the statutory scheme and specific aspects of the drafting ([23], [107] [112]), fell to be rejected in the face of this clear statutory language. The Special Commissioners and, to some extent, the Court of Session had attached too much weight to the label Capital Reserve, which had led them to attach undue weight to the notion that capital gains ought not to be taxed under Schedule D, Case I: [26], [101]. Given that the Court allows the Revenues cross appeal, a majority preferred to express no view on section 83(3)(a). Lord Hope indicated that, had it been necessary to decide the point, he would have held in agreement with the majority in the Inner House that the relevant amounts would have been covered by section 83(3)(a): [28] [31]. |
This appeal concerns the right under EU law for family members to move and reside with an EU citizen exercising the right of freedom of movement. The appellant SM, given the name Susana in the judgment, is a citizen of Algeria. She is a young child who has been placed into the legal guardianship of EU citizens under the Islamic kefalah system. Susanas guardians (Mr and Mrs M) are French nationals of Algerian ethnicity, who married in the United Kingdom in 2001. In 2009 they travelled to Algeria, where they were assessed as suitable to become guardians. Susana was abandoned after her birth in June 2010. Mr and Mrs M applied to become her guardians and after three months Susana was placed under their guardianship. A legal custody deed was later issued in Algeria. Mr M returned to the UK in 2011 and resumed his work as a chef. Mrs M remained in Algeria with Susana. In May 2012 Susana applied for entry clearance to the UK, as the adopted child of a EU national, under regulation 12(1) (as a family member) or 12(2) (as an extended family member) of the Immigration (European Economic Area) Regulations 2006 (the Regulations). The Regulations transposed Directive 2004/38/EC (the Directive) into UK law. The respondent refused Susanas application on the basis that the Algerian guardianship was not recognised as an adoption in UK law. Susanas appeal was refused by the First tier Tribunal but allowed by the Upper Tribunal. The Court of Appeal, allowing the respondents appeal, held that member states were permitted to restrict the forms of adoption which they would recognise as falling within the definition of family member, and that those restrictions could not be undermined by recognising the child as an extended family member. Susana appealed to the Supreme Court. Before the hearing, the Upper Tribunal in another case (Sala v Secretary of State for the Home Department [2016] UKUT 00411) held that there was no statutory right of appeal against the refusal of a residence card to a person claiming to be an extended family member, as it was not an EEA decision for the purposes of regulation 26(1) of the Regulations. A further issue therefore arose before the Supreme Court as to whether it had jurisdiction to hear the appeal. The Supreme Court unanimously holds (1) that it does have jurisdiction to hear the appeal, Sala having been wrongly decided; and (2) refers three questions to the Court of Justice of the European Union for a preliminary ruling. Lady Hale, with whom all the other justices agree, gives the only judgment. It was submitted on behalf of Susana that she fell within the definition of family member under article 2.2(c) of the Directive, which referred to direct descendants who are under the age of 21, and as such was entitled to move with and reside with Mr and Mrs M. Alternatively, she came within the discretionary provisions of article 3.2(a) as any other family members, irrespective of their nationality, not falling under the definition in point 2 of article 2 who, in the country from which they have come, are dependants or members of the household of the Union citizen. The transposition of Article 3.2(a) into Regulation 8 of the Regulations dealing with extended family members was inaccurate insofar as it imposed a requirement that the dependant or member of the household be a relative of the EEA national [7]. The Supreme Court had little doubt that Susana would fall within article 3.2(c) if she did not fall within article 2.2(c). The term family member is wide enough to include people who are not related by consanguinity or affinity, and is clearly capable of including a child for whom the Union citizen has parental responsibility under the law of the childs country of origin [17]. UK legislation relating to foreign adoptions was relevant to the examination of whether to exercise the discretion to facilitate entry and residence. Refusal would in principle be justified if there were reason to believe the child was the victim of exploitation, abuse or trafficking, or that the claims of the birth family had not been respected [18], but the fact that the arrangements did not comply in every respect with the stringent requirements of UK adoption law would not be determinative [19]. The best interests of the child were a primary consideration, and would depend on factors such as what would have happened to her if the kefalah arrangement had not been established, the background and how well integrated into the family and household she now was [20]. The purpose of the Directive to strengthen the right of free movement was a further consideration [21]. There was also reason to consider that Susana qualified for automatic rights of entry and residence as a direct descendant. This was an autonomous term in EU law and required a uniform interpretation throughout the Union [25]. It was not clear from existing case law whether a child in Susanas position should fall within article 2.2. The procedural safeguards and provisions against abuse of rights in the Directive might be ineffective to prevent a child being the victim of exploitation, abuse or trafficking [31], whether that child was a third country national or a national of another member state [32]. Accordingly, the Supreme Court refers three questions to the CJEU for a preliminary ruling: (1) Is a child who is in the permanent legal guardianship of a Union citizen or citizens, under kefalah or some equivalent arrangement provided for in the law of his or her country of origin, a direct descendant within the meaning of article 2.2(c) of the Directive? (2) Can other provisions in the Directive, in particular articles 27 and 35, be interpreted so as to deny entry to such children if they are the victims of exploitation, abuse or trafficking or are at risk of such? (3) Is a member state entitled to enquire, before recognising a child who is not the consanguineous descendant of the EEA national as a direct descendant under article 2.2(c), into whether the procedures for placing the child into the guardianship or custody of that EEA national was such as to give sufficient consideration to the best interests of that child? On the question of jurisdiction, Sala had rightly been overruled by the Court of Appeal in a subsequent decision on the interpretation of regulation 26 of the Regulations. Susana did enjoy a right of appeal in respect of both articles 2.2 and 3.2 [34 41]. |
The appellant Shaun Docherty was convicted on 13 November 2012 of serious violent offences under s.18 of the Offences against the Person Act 1861. He had displayed a clear pattern of aggressive offending and posed a high risk of serious further violence. The nature of Dochertys offences was such that he fell under the scheme of preventative sentencing for dangerous offenders, defined by the Criminal Justice Act 2003 (CJA 2003) as those who are convicted of specified offences and who present a significant risk to the public of serious harm from further serious offending. The statutory maximum sentence for the offences of which Docherty was convicted is, and has been for well over a century, life imprisonment. The scheme under the CJA 2003 included inter alia a possible indeterminate sentence of imprisonment for public protection (IPP). This required the judge to specify a minimum period to be served before the IPP prisoner could be eligible for release on licence, providing that the Parole Board was satisfied that it was no longer necessary for the protection of the public that he be detained. The CJA 2003 also provided a form of extended sentence known as an extended sentence for public protection (EPP). That scheme was later replaced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), which introduced new discretionary and mandatory life sentences and a new form of extended determinate sentence (EDS), while abolishing IPP and EPP. A Commencement Order specified the commencement date as 3 December 2012 for the new scheme, and included transitional provisions that IPP and EPP would still be available for anyone convicted but not yet sentenced before 3 December 2012, as in the case of the Appellant. The Appellant was sentenced to IPP on 20 December 2012, with a specified minimum period of five years and four months. The Appellant contended that he ought to have been sentenced instead to EPP, and that the Commencement Order was unlawful to the extent that its transitional provisions preserved IPP for him. He argued the Order was unlawful for three reasons. Firstly, the new scheme was less severe, so to apply the harsher, earlier scheme was contrary to an international principle of lex mitior binding on English courts by virtue of article 7 of the European Convention on Human Rights (ECHR). Secondly, because the purpose of LASPO was to remove IPP as a sentencing option, preserving it to any extent was outside the authority given by LASPO. Thirdly, it was unlawful discrimination contrary to Article 14 ECHR to impose IPP on him but not on a person convicted after the specified commencement date. The Court of Appeal dismissed all of the Appellants arguments and the Appellant appealed to the Supreme Court. The Supreme Court unanimously dismisses Mr Dochertys appeal. Lord Hughes gives the judgment, with which the rest of the Court agrees. The Commencement Order setting out transitional provisions for the introduction of LASPO was lawful. It did not breach Article 7 ECHR, it was legitimately made and was rational, and if it was discriminatory (which was doubtful) then it was justifiably so. With the exception of a mandatory life sentence for murder, English criminal sentencing is a matter for the judge. Statute prescribes the statutory maximum, within which the judge may sentence, taking into account the relevant guidelines. The judge must sentence according to the law and practice prevailing at the time of sentence, regardless of when the offence was committed. Thus if the maximum sentence has been reduced by statute since the offence was committed, the court will sentence within that now current maximum, or if sentencing practice has moved downward, the court should sentence in line with that. Article 7 ECHR requires that there be no punishment without law. This has always said, explicitly, that no sentence may be imposed which exceeds that to which the defendant was exposed at the time of committing the offence (lex gravior). Since the statutory maximum for the Appellants offences was the same at the time of offence and sentence, the principle of lex gravior is not offended. The principle of lex mitior, in contrast, is that if provision is made by law for a lighter penalty, subsequent to the commission of the offence, the offender shall benefit from that lighter penalty. The Strasbourg court has held in 2010 in Scoppola v Italy (No 2) (2010) 51 EHRR 12 that Article 7 also requires compliance with this principle. There are some difficulties in establishing the exact meaning which the court gave to lex mitior, but it is not necessary to resolve them because it is clear that the English practice of sentencing according to current law and practice, subject to the statutory maximum obtaining at the time of the offence (if lower) complies with it. The Strasbourg court cannot have meant that it is necessary to examine all intervening rules or practices between the offence and the sentencing process, and to sentence according to whichever is the most favourable. That would not accord with good reason or with the rationale of lex mitior, or with the English practice. Lex mitior is in any event of no assistance to Docherty because it does not involve anticipating the commencement of a new and more favourable sentencing scheme [42 49]. The reading of the provisions of the Commencement Order, together with the provisions of LASPO is clear: IPP and EPP disappear from the sentencing armoury on 3 December 2012, except for anyone already convicted but not yet sentenced, as in the case of the Appellant. There was no breach of Article 7 ECHR. In any event, the Appellants argument that he should benefit from the accelerated removal of IPP from the old scheme but claim the preservation of another part of it (EPP) is inconsistent [58]. Further, there was nothing contrary to LASPOs statutory purpose in the Commencement Orders transitional provisions. s.151 of LASPO enables such an order to be made, and that it may make transitional provisions. The phased commencement of the new sentencing scheme was both legitimate and rational. The Appellants discrimination argument also fails. It is doubtful whether being subjected to a different sentencing regime to another prisoner, due to a different date of conviction, could amount to a sufficient status to bring it within the anti discrimination provision of Article 14 ECHR. Even if it could, the differential treatment is clearly justified by the need for all sentencing changes to start somewhere [61 63]. |
Richard Durkin visited a PC World store in Aberdeen on 28 December 1998 to purchase a laptop computer, making clear that he wanted one with an internal modem. A sales assistant identified a laptop but said he was unsure whether it had an internal modem. He agreed that Mr Durkin could take the computer home and return it if it did not. Mr Durkin paid a 50 deposit and signed a credit agreement given to him by the sales assistant for the balance of 1,449. The assistant signed the credit agreement on behalf of a lender, HFC Bank plc [2]. On returning home, Mr Durkin found that the computer did not have an internal modem. At about 9am the next day, he returned it and asked for his deposit back and for the credit agreement to be cancelled. A store manager refused to accept his rejection of the goods and took no step to cancel the credit agreement [2]. Mr Durkin eventually raised an action and in March 2008 the sheriff declared he had validly rescinded the contract of sale. This was not challenged on appeal [3]. Mr Durkin did not pay any money to HFC under the credit agreement. In February 1999, he responded by telephone to a request for payment, explaining that he had rejected the laptop and rescinded both his contract with PC World and the credit agreement. The following month, Mr Durkin wrote to the managing director of PC World to explain that he had rejected the computer, that PC Worlds manager had refused to refund the deposit and that HFC was demanding money from him because the manager would not tell HFC the goods had been rejected [4]. HFC wrote again in July 1999 warning Mr Durkin that if he did not resume payments he might have difficulty obtaining credit because HFC made monthly reports to credit reference agencies. It added that if he did not respond to the letter, HFC would serve a default notice on him under the Consumer Credit Act 1974. Mr Durkin telephoned HFC to re affirm his position [5]. Without making any enquiries about his claim to have rescinded both agreements, HFC issued a default notice and intimated to credit reference agencies that Mr Durkin had been in default of his obligations under the credit agreement since 14 January 1999. Entries remained on their registers until 2005 or 2006 [6]. Mr Durkin recovered his deposit out of court, but found that the credit register entries prevented him from opening new accounts with other lenders, meaning he could not continue to take advantage of offers of 0% credit on transferred balances to minimise the costs of his borrowing by transferring from one credit card company to another [7]. He raised an action in the Sheriff Court in 2004 seeking a declarator that he had validly rescinded both the contract of sale and the credit agreement. He claimed damages of 250,000 from HFC for its negligence in representing to the credit reference agencies that he had defaulted. He did so under three heads: (i) damage to his financial credit, (ii) loss from interest charges caused by his inability to exploit offers of 0% credit and (iii) loss of a capital gain caused by his inability to put down a 30% deposit on a Spanish property in 2003 [8]. In March 2008, the sheriff held that section 75 of the 1974 Act meant that Mr Durkin had been entitled to rescind and had rescinded the sale contract and the credit agreement. He awarded 8,000 for injury to credit, 6,880 for additional interest Mr Durkin had to pay, and 101,794 for the loss in respect of the Spanish property [9]. In June 2010 Mr Durkins appeal against the sheriffs assessment of damages was refused by the First Division of the Inner House of the Court of Session and HFC successfully cross appealed the findings that section 75 allowed him to rescind the credit agreement and that it had breached its duty of care. The First Division also held that the evidence did not entitle the sheriff to find that a breach of duty by HFC had caused the alleged interest charges and Spanish property losses [10 11]. Lord Hodge delivers the unanimous judgment of the Court, allowing Mr Durkins appeal. Lord Hodge finds that Mr Durkin was entitled to rescind the credit agreement and validly did so by giving notice to HFC in about February 1999 [27]. He sets out the legal framework, explaining that the agreement was a regulated consumer credit agreement and a debtor creditor supplier agreement under the 1974 Act [13 17]. The key provision is section 75(1), which provides that if the debtor under a debtor creditor supplier agreement has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor [18]. Lord Hodge explains that the purpose of the restricted use credit agreement is to finance a transaction between the consumer and the supplier. Where, as here, the contract is tied to a particular transaction, it has no other purpose [22 23]. The rescission of the supply agreement excuses the innocent party from further performance of any obligations he has under it [24]. It is inherent in a debtor creditor supplier agreement under the 1974 Act, which is also tied into a specific supply transaction, that if the supply transaction it financed is brought to an end by the suppliers repudiatory breach of contract, the debtor must repay the borrowed funds recovered from the supplier. In order to reflect that reality, the law implies a term into such a credit agreement that it is conditional upon the survival of the supply agreement. The debtor on rejecting the goods and thereby rescinding the supply agreement for breach of contract may also rescind the credit agreement by invoking this condition [26]. Knowing of Mr Durkins assertion that the credit agreement had been rescinded, HFC was under a delictual duty to investigate that assertion in order reasonably to satisfy itself that the credit agreement remained enforceable before reporting to the credit reference agencies that he was in default. HFC made no such enquiries, accepting without question DSGs position that Mr Durkin had not been entitled to rescind the contract of sale [29 33]. HFC did not contest the award of 8,000 for damage to credit if breach of duty were established. However, the Supreme Court rejects Mr Durkins attempt to restore the sheriffs award of damages for the extra interest he paid and for the loss of the capital gain on the Spanish property. Appeals like the present may only be made on matters of law, meaning the Supreme Court cannot go behind the First Divisions findings of fact on these alleged heads of loss [36 39]. |
B is an Algerian national whose true identity has not been revealed. He was sentenced to four months imprisonment by the Special Immigration Appeals Commission (SIAC) on 26 November 2010 for contempt of court. That sentence was imposed because of what was found to be Bs deliberate refusal to obey an order of SIAC on 19 July 2007. This had required B to disclose his true identity, to give certain particulars and to provide a DNA sample. B had provided the sample but had not revealed his identity. B appealed the order committing him for contempt. He argued that the sentence of imprisonment gave rise to breaches of articles 3 and 8 of the European Convention on Human Rights (ECHR). SIAC had found that B was unlikely to relapse into paranoid psychosis if committed to prison. He had suffered from that condition previously and there was medical evidence that, if imprisoned, he was likely to react by refusing medication and consequently reverting to a psychotic state. B argued that SIAC had failed to give reasons for finding that B would continue to take his medication if imprisoned. He also argued that the sentence of four months was excessive. The Court of Appeal held that SIAC had erred in rejecting the evidence of two psychiatrists that B would refuse to take his medication and that, in consequence, the onset of a psychotic state was likely. A majority of the Court of Appeal (Laws LJ and Longmore LJ) held that, notwithstanding SIACs error, the appeal should be dismissed. They rejected arguments on articles 3 and 8, finding that there would be no breach of article 3 as arrangements would be in place for Bs treatment in hospital if he were to suffer a relapse. The majority was also of the view that the sentence imposed was not excessive. Etherton LJ agreed with the majority that SIAC had erred but was of the view that the case should be remitted to SIAC for reconsideration. Permission to appeal was granted by the Supreme Court on two certified questions: 1) Whether the Court of Appeal is correct that it should adopt the approach of the Court of Appeal (Criminal Division) and only allow an appeal where a sentence is manifestly excessive or whether section 13 of the Administration of Justice Act 1960 gives it a broader discretion that enables it to remit a case where a first instance judgment regarding sentence was flawed and/or procedurally unfair? 2) Whether the Court of Appeal must remit a case where a first instance judgment regarding sentence imposed in a contempt case was flawed and/or procedurally unfair unless it concludes that the court below would have reached the same conclusion even if it had not fallen into error? The Supreme Court unanimously dismisses the appeal. Lord Kerr gives the judgment of the court. The affirmation of the original sentence does not necessarily entail an endorsement of the reasons for which the decision was made. Where it has been determined that the basis for the original sentence of imprisonment is wrong, an assessment must indeed be carried out afresh [11]. It is not essential that this be done by the first instance court. Where an appellate court is in possession of all the relevant facts, the proper course is to determine what the sentence for contempt should be based on the true facts. Where a fresh investigation into the facts is required this should be undertaken by the first instance court. This was not such a case, however [12]. Committal is appropriate where it can reasonably be expected to induce the subject to comply with the order and/or for the purposes of punishment. It is unlikely that the fact the person subject to committal already has substantial restrictions on his liberty (the appellant is subject to stringent SIAC bail conditions) will be material where the court thinks imprisonment will induce compliance with the order. Such restrictions are also unlikely to be of much relevance where the intention of the court is to punish. [14]. There was nothing in the judgments of the Court of Appeal remotely suggestive of the view that sending the appellant to prison would bring about a change of heart on his part. The judgments make it clear that the object was to punish the contempt, not to induce compliance with the order. [16 19]. The Court of Appeal clearly dealt with the case by carrying out a fresh assessment. Its conclusions were premised on a different basis from that of SIAC in that the court had accepted that there was a real risk that B would relapse into paranoid psychosis. [20]. In this case, the sentence imposed by SIAC was not determined on the basis that it had concluded imprisonment was appropriate. It was not influenced by a consideration that B would not relapse into paranoid psychosis. It was chosen to reflect the seriousness of the contempt. It was therefore not inappropriate for the Court of Appeal to consider whether the sentence imposed was manifestly excessive. There was nothing untoward about the Court of Appeal testing its decision against the sentence SIAC had chosen [23 24] In answer to the second certified question, an appellate court need only remit a case where a first instance judgment regarding sentence imposed in a contempt case was flawed and/or procedurally unfair if it considers that a fresh investigation of new facts is required and it is necessary or desirable that this be undertaken by the first instance court [24]. |
This case raises a fundamental dilemma over the use of land. On the one side, there is a property company which seeks to ensure that 13 new affordable houses do not go to waste. On the other, there is a charitable childrens trust which seeks to ensure that terminally ill children in a hospice can enjoy, in privacy, the use of the hospice grounds without being overlooked, or otherwise detrimentally affected, by the new houses. The legal issues concern restrictive covenants over land and the procedure, under section 84 of the Law of Property Act 1925 (the 1925 Act), by which an application may be made to a tribunal for the discharge of a restrictive covenant. It is the first time that the highest court (whether the House of Lords or the Supreme Court) has been required to decide an appeal on section 84. In July 1972 a farmer sold part of his land (the application land) to a company (SSPC) that already owned the land next door (the unencumbered land). The application land and the unencumbered land together form a rectangular plot (the Exchange House site). As part of the sale, SSPC covenanted that at all times thereafter: (i) no building structure would be built on the application land; and (ii) the application land would only be used for car parking (the restrictive covenants). The farmers son, Mr Barty Smith, later inherited the land adjacent to the Exchange House site. In 2012 he made a gift of part of this land (the hospice land) to the Alexander Devine Childrens Cancer Trust (the Trust) for the construction of a childrens hospice. Soon afterwards, and with knowledge of the restrictive covenants, Millgate Developments Ltd (Millgate) acquired the Exchange House site. In July 2013 Millgate applied for planning permission to build 23 affordable houses on the site, in line with its affordable housing planning obligations. Thirteen of these houses were to be built on the application land, in breach of the restrictive covenants. Some of them would overlook the hospices planned gardens and wheelchair walk. Planning permission was granted in March 2014 and Millgate began construction in July 2014. In September 2014 Mr Barty Smith wrote to Millgate objecting to them building on the application land. Millgate continued regardless and in May 2015 agreed to sell the development at the Exchange House site to Housing Solutions Ltd (Housing Solutions). In July 2015, after completing the development, Millgate applied to the Upper Tribunal (the UT) seeking modification of the restrictive covenants, pursuant to section 84 of the 1925 Act. Mr Barty Smith and the Trust objected to this application. Shortly afterwards, in September 2015, construction of the hospice began. On 18 November 2016 the UT allowed Millgates application to modify the restrictive covenants, on the condition that it paid 150,000 to the Trust as compensation. On 28 November 2018 the Court of Appeal overturned the UTs decision. Housing Solutions now appeals to the Supreme Court. The Supreme Court unanimously dismisses the appeal, though for different reasons to those given by the Court of Appeal. Lord Burrows writes the judgment. The application to modify the restrictive covenants is refused. Section 84 of the 1925 Act, as amended, confers upon the UT the power to discharge or modify restrictive covenants on five grounds. The exercise of this power has two stages. At least one of the grounds must be satisfied (the jurisdictional stage) before the UT can then decide whether to exercise its discretion to discharge or modify the restrictive covenants (the discretionary stage). The ground relevant to this appeal is whether the restrictive covenants, by impeding a reasonable user of land, are contrary to the public interest: sections 84(1)(aa) and 84(1A)(b) [31 33]. The first issue is whether Millgates deliberate and cynical breach of the restrictive covenants is relevant at the jurisdictional stage [41]. The Court of Appeal found that it was [47]. The Supreme Court finds that it is not. The contrary to the public interest ground requires a narrow interpretation. Its focus is on the impeding of a reasonable user of the land and whether that impediment, by continuation of the restrictive covenant, is contrary to the public interest. The question is not the wider one of whether in all the circumstances it would be contrary to the public interest to maintain the restrictive covenant [42]. This narrow interpretation requires weighing the public interest in 13 affordable housing units not going to waste against the public interest in the hospice providing a sanctuary for children dying of cancer. [43]. The good or bad conduct of the applicant is irrelevant at the jurisdictional stage. It tells us nothing about the merits of what the land in question is being or will be used for [44]. This narrow interpretation is also in line with the other four grounds under section 84, accords with the purpose of section 84, and reflects the fact that the applicants conduct can still be considered at the discretionary stage [45]. The second issue is whether the UT failed properly to consider, at the discretionary stage, Millgates cynical conduct. The Court of Appeal found that it did [54]. The Supreme Court agrees, but for different reasons [53]. It is only appropriate for an appellate court to interfere in a discretionary decision of a specialist tribunal if that tribunal has made an error of law [51]. In this case, however, even though the UT took into account Millgates conduct, it did make an error of law [53]. The UT failed to consider two relevant factors at the discretionary stage: (i) Millgate could have built on the unencumbered land, not the application land; and (ii) Millgate would have been unlikely to satisfy the contrary to the public interest ground had it applied to modify the restrictive covenants prior to building on the application land. Millgate could not be rewarded for presenting the UT with a fait accompli [57 62]. This is sufficient to dismiss the appeal. But, having heard full submissions on two further issues, the Court considers them briefly [63]. First, the UT did not rely on Lord Sumptions comments in Coventry v Lawrence [2014] UKSC 13 and so any dispute about whether or not it had been correct to do so does not arise [64 66]. Second, the UT correctly considered at both stages the fact that Millgate had built on the application land in order to fulfil its affordable housing planning obligations [70 73]. The Court therefore upholds the Court of Appeals decision, but for different reasons [74]. The UTs decision is re made and the application to modify the restrictive covenants refused [77]. |
The issue in this appeal is whether the court should exercise its discretion to strike out the equal pay claims of the respondents, which have been brought in the High Court, on the ground that they could more conveniently be disposed of in an employment tribunal, notwithstanding the fact that the claims there would be time barred. The respondents are former employees of the appellant council (Birmingham), 170 of them women and 4 men. They left their employment on various dates between 2004 and 2008. They allege that Birmingham was in breach of the equality clause inserted into their contracts of employment by section 1(1) of the Equal Pay Act 1970 (the Act), as substituted by section 8(1) of the Sex Discrimination Act 1975, by failing to provide certain benefits and other payments which were payable to workers of the opposite sex employed on work rated as equivalent. The respondents could have brought their claims in the employment tribunal, provided that they did so within the time limit applicable to them of up to six months after leaving their employment. They did not do so, however, and instead issued the claims later in the High Court, for which the time limit was six years from the date their cause of action accrued. Birmingham asked the High Court to exercise the discretion provided by s 2(3) of the Act (as amended) to strike out the claims on the ground that they could more conveniently be disposed of separately by an employment tribunal. Birminghams application was dismissed by the High Court. Its appeal to the Court of Appeal was also dismissed. The Supreme Court by a majority (Lord Sumption and Lord Carnwath dissenting) dismisses the appeal. The judgment of the majority is given by Lord Wilson; the judgment of the minority by Lord Sumption. Birmingham contended that, although the High Court did have concurrent jurisdiction under the Act to determine the respondents claims, those claims should have been presented to the employment tribunal. It invited the court to rule that, except where respondents could provide a reasonable explanation for their failure to do so, their claims should be struck out. It argued that there would be no purpose in providing a strict time limit for the presentation of claims to the tribunal under the Act, if those who failed to comply with it could have their claims heard elsewhere [11 13]. In reviewing the history of s 2 of the Act since its enactment, Lord Wilson observed that it was a striking feature of the six month limitation period set by the Act for claims in the employment tribunal that Parliament had never made it extendable. This suggested that Parliament recognised the availability of an alternative claim in court [20]. The statutory objective of s 2(3) was the distribution of judicial business for resolution in the forum more fitted for it. In most cases it would be more convenient for an employment tribunal to dispose of a claim in respect of the operation of an equality clause, provided that it could still be brought there, rather than for the court to do so. The reasons for the failure of a claimant to bring the claim in the tribunal were not, however, relevant in any way to the notion of convenience [26], nor was a multi factorial inquiry into the interests of justice required [27]. Such claims, barring an abuse of process, could never be more conveniently disposed of by the tribunal if they would there be dismissed for being out of time [29]. Parliament might wish to consider introducing a relaxation of the usual limitation period for such cases in order to allow their convenient disposal in the tribunal in future [31]. In these circumstances there was no need to consider whether the procedural rules might infringe the EU principle of equivalence, by which the rules for proceedings in respect of rights afforded to individuals through the direct effect of Community law should not be less favourable than those governing similar domestic actions. This was a point linked to the proper exercise of the discretion under s 2(3) and would have been unlikely to succeed in this case [32 33]. Lord Sumption, dissenting, considered that allowing the claims to proceed in court frustrated the policy underlying the provisions of the Act relating to limitation [36]. It was difficult to resolve the construction of s 2(3) by reference to the mere language of the Act and therefore important to examine Parliaments underlying purpose in conferring jurisdiction on employment tribunals over equal treatment claims and providing special periods of limitation to apply to such claims in those tribunals [39]. There were substantial advantages for both the parties and for the broader interests of justice in having claims heard in employment tribunals [40]. Limitation was a particularly important defence for employers facing equal treatment claims [41], and this point more plausibly explained the absence of any provision to defer the running of time [44]. Lord Sumption would have held that convenience under s 2(3) went further than the narrow question of the more efficient distribution of judicial business. The fact that a claim would be time barred in the employment tribunal was a highly relevant but not conclusive factor [47]. |
This appeal concerns the meaning of the words rights of custody in article 3 of the Hague Convention on the Civil Aspects of International Child Abduction (the Convention), and in the Brussels II Revised Regulation (EC) No 2201/2003 (the Regulation) which complements and takes precedence over the Convention between most member states of the European Union. A child is wrongfully removed or retained in a country under the Convention if such removal or retention is in breach of rights of custody. The issue is whether the rights of custody must already be legally recognised and enforceable, or include informal rights (termed inchoate rights), the existence of which would have been legally recognised had the question arisen before the removal or retention in question. The proceedings concern a boy (K) born in Lithuania in March 2005. From the time of his birth until 2012 he lived with and was cared for by his maternal grandparents. His father separated from his mother before he was born and has played no part in his life. His mother moved to Northern Ireland without K in May 2006 and has lived there ever since. A month after Ks birth she authorised her mother to seek medical assistance for K and, before she left for Northern Ireland, executed a notarised consent for her mother to deal with all institutions in relation to K on her behalf. In 2007 a court order was made in Lithuania putting K under the temporary care of his grandmother. This order terminated when Ks mother returned in February 2012 seeking to take K into her own care. Ks mother also applied to withdraw the notarised consents. Meetings were held at the Childrens Rights Division of the local authority where orders were made for her to have weekly contact with K. She was advised that legal proceedings against her mother to obtain custody of K would be costly and protracted and decided instead to seize K forcibly in the street while he was walking home from school with his grandmother on 12 March 2012, and to travel immediately back to Northern Ireland with him by car and ferry. The grandparents were told by the Lithuanian authorities that they had no right to demand the return of K. However, in February 2013 they issued an originating summons in Northern Ireland seeking a declaration that K was being wrongfully retained in breach of their rights of custody. Maguire J refused their application, and their appeal against his decision was dismissed by the Northern Ireland Court of Appeal. The Supreme Court by a majority (Lord Wilson dissenting) allows the appeal, finding that the grandmother did enjoy rights of custody such that Ks removal from Lithuania was wrongful. It orders that K should be returned to Lithuania forthwith. If Ks mother wishes to apply for permission to argue at this very late stage that any of the exceptions to the courts obligation to return K found in article 13 of the Convention apply, this order will be stayed if she makes her application within 21 days. Lady Hale gives the only judgment of the majority. Lord Wilson gives a dissenting judgment. The courts of states parties to the Convention have on several occasions dealt with applications based on inchoate rights of custody [23 42]. In England and Wales such rights have been recognised where the person with legal rights of custody had abandoned the child or delegated his primary care to others [44], but other countries have taken a less expansive view. The Convention is not concerned with the merits of custody rights but it will only characterise a removal of a child as wrongful if it interferes with a right of custody which gives legal content to the situation altered by the removal. Thus it is not enough that Ks removal was a classic example of the sort of conduct which the Convention was designed to prevent and to remedy, given the harmful effects on K of wresting him from the person he regarded as his mother and taking him without notice to a country where he knew no one and did not speak the language [50 51]. The rights relied on by Ks grandparents must amount to rights of custody for the purposes of the Convention. The majority considered that the English courts should continue to recognise inchoate rights as rights of custody under the Convention and the Regulation, provided that the important distinction between rights of custody and rights of access was maintained, and provided that (a) the person asserting the rights was undertaking the responsibilities and enjoying the powers entailed in the primary care of the child; (b) they were not sharing them with the person with a legally recognised right to determine where the child should live and how he should be brought up; (c) that person had abandoned the child or delegated his primary care to them; (d) there was some form of legal or official recognition of their position in the country of habitual residence (to distinguish those whose care of the child is lawful and those whose care is not); and (e) there is every reason to believe that, were they to seek the protection of the courts of that country, the status quo would be preserved for the time being while the long term future of the child could be determined in those courts in accordance with his best interests [59]. These conditions applied to the situation of Ks grandparents. The Childrens Rights Division was supervising the situation on the basis that K remained living with his grandparents while having contact with his mother. Taking K out of the country without his grandmothers consent was in breach of her rights of custody [61 62]. It followed that the court was bound under the Convention to make an order to return K to Lithuania forthwith. It may be that the grandparents would be content with legally enforceable contact arrangements and the mother now has every incentive to agree to these. If the mother were to seek permission at this late stage to raise one of the exceptions in article 13 to the courts obligation to order the return of the child within 21 days, the order would be stayed until the hearing on the first available date in the High Court to determine whether such permission should be granted to her [66]. Lord Wilson would have dismissed the appeal. In his view the rights of custody enjoyed by Ks grandmother were terminated on the mothers return [71]. Even if the courts in Lithuania might have maintained the status quo while Ks future was decided, this did not amount to recognition of rights of custody in the grandparents [72]. The Convention application should therefore have been dismissed. As a result, a welfare inquiry into Ks interests could then have been conducted under the Children (Northern Ireland) Order 1995, in which his grandparents might have been granted an order for contact or even residence [84]. |
The Counsel General for Wales (the Applicant) is, by section 99(1) of the Government of Wales Act 2006, empowered to refer the question whether a proposed Act of the Welsh Assembly is within its devolved legislative competence to the Supreme Court for decision. In the present case, the Applicant referred to the Supreme Court the question whether the Welsh Assembly has the legislative competence to enact the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [1]. The Bill has two provisions of particular importance. Section 2 makes persons by whom or on whose behalf compensation payments are made to victims of asbestos related diseases (compensators) liable to Welsh Ministers for the cost of NHS services provided to such victims. Section 14 extended the scope of the compensators liability insurance policies to cover the sums which they would be required to pay under section 2 [2] [8]. In determining this reference, the Supreme Court therefore has to decide two issues: (1) Whether the Bill comes within the legislative competence of the Welsh Assembly concerning the organisation and funding of [the] national health service under the Government of Wales Act 2006 (GOWA 2006) section 108(4) (5) and paragraph 9 of Part 1 of Schedule 7; and (2) Whether the Bill is nonetheless outside the legislative competence of the Welsh Assembly by virtue of section 108(6) of the GOWA 2006, on the grounds that it was incompatible with the rights of compensators and insurers under article 1 of Protocol 1 of the European Convention on Human Rights to the peaceful enjoyment of their possessions (A1P1 rights) [9]. The Supreme Court unanimously finds that the Welsh Assembly lacks legislative competence to enact the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill in its present form. Lord Mance (with whom Lords Neuberger and Hodge agree) gives the lead judgment and holds that the Bill is: (1) Outside the legislative competence of the Welsh Assembly concerning the organisation and funding of [the] national health service [34]; and (2) Incompatible with the A1P1 rights of compensators and insurers to the peaceful enjoyment of their possessions [65] [69]. Lord Thomas (with whom Lady Hale agrees) concurs in the result set out in the judgment of Lord Mance for narrower reasons [71]. The reasoning of the majority in the lead judgment is as follows: (1) The critical phrase, in determining the legislative competency of the Welsh Assembly to enact the Bill, is Organisation of funding of the National Health Service in paragraph 9 of Part 1 of Schedule 7 to the GOWA 2006 [13]. It is common ground that Welsh Ministers do not have general fiscal powers [17] and even assuming (without deciding) that the Welsh Assembly has competence to levy charges for Welsh NHS services, the Bill is not sufficiently related to the organisation of funding of the National Health Service under section 108(4) of the GOWA 2006 to come within that competence. The charges provided for by the Bill are to be imposed on compensators and insurers rather than patients and lack any direct or close connection with the provision of Welsh NHS services. The Bill seeks to impose what are in effect new tortious or statutory duties on third parties to pay for the relevant Welsh NHS treatment [24] and [27]. (2) The Bill also interferes with the A1P1 rights of compensators and insurers to the peaceful enjoyment of their possessions. The new financial liabilities of compensators and insurers would arise from asbestos exposure and liability insurance policies which long pre dated the Bill [36] and [41]. The retrospective effect of the Bill requires special justification, which is absent in the present case [53], [57] and [65] [69]. Lord Thomas and Lady Hale agree that the Bill is beyond the competence of the Welsh Assembly, but on narrower grounds. Section 2 of the Bill is within the competence of the Welsh Assembly, because the organisation of funding of the National Health Service encompasses a general power to raise funds for the Welsh NHS through the imposition of charges on patients, who could recover those charges from an employer who has exposed him to asbestos. The employer could then claim indemnification from its liability insurer [83] and [96]. It is therefore open to the Welsh Assembly to impose charges directly on the employer/compensator [100] [102]. The interference of the Bill with the A1P1 rights of employers/compensators is proportionate to its economic and social purpose of funding Welsh NHS services for asbestos victims [108], [124] and [128]. However, section 14 of the Bill is outside the competence of the Welsh Assembly because its effect is retrospectively to extend or override the provisions of existing liability insurance policies, contrary to section 108(5) of the GOWA 2006 and the A1P1 rights of insurers [133] and [138] [140]. |
The Supreme Court unanimously allows the appeal, holding that the reasonable tolerability test applied by the Court of Appeal is contrary to the Convention and should not be followed in the future. HJ and HTs cases are remitted for reconsideration in light of the detailed guidance provided by the Supreme Court. There is no dispute that homosexuals are protected by the Convention, membership of the relevant social group being defined by the immutable characteristic of its members sexuality [paras [6] and [10] per Lord Hope and para [42] per Lord Rodger]. To compel a homosexual person to pretend that their sexuality does not exist, or that the behaviour by which it manifests itself can be suppressed, is to deny him his fundamental right to be who he is. Homosexuals are as much entitled to freedom of association with others of the same sexual orientation, and to freedom of self expression in matters that affect their sexuality, as people who are straight [paras [11] and [14] per Lord Hope and para [78] per Lord Rodger]. The Convention confers the right to asylum in order to prevent an individual suffering persecution, which has been interpreted to mean treatment such as death, torture or imprisonment. Persecution must be either sponsored or condoned by the home country in order to implicate the Convention [paras [12] and [13] per Lord Hope]. Simple discriminatory treatment on grounds of sexual orientation does not give rise to protection under the Convention. Nor does the risk of family or societal disapproval, even trenchantly expressed [paras [13], [15] and [22] per Lord Hope and para [61] per Lord Rodger]. One of the fundamental purposes of the Convention was to counteract discrimination and the Convention does not permit, or indeed envisage, applicants being returned to their home country on condition that they take steps to avoid offending their persecutors. Persecution does not cease to be persecution for the purposes of the Convention because those persecuted can eliminate the harm by taking avoiding action [paras [14] and [26] per Lord Hope and paras [52] [53] and [65] per Lord Rodger]. The reasonable tolerability test applied by the Court of Appeal must accordingly be rejected [para [29] per Lord Hope and paras [50], [75] and [81] per Lord Rodger]. There may be cases where the fear of persecution is not the only reason that an applicant would hide his sexual orientation, for instance, he may also be concerned about the adverse reaction of family, friends or colleagues. In such cases, the applicant will be entitled to protection if the fear of persecution can be said to be a material reason for the concealment [paras [62], [67] and [82] per Lord Rodger]. Lord Rodger (with whom Lords Walker and Collins and Sir John Dyson SCJ expressly agreed), at para [82] and Lord Hope, at para [35], provided detailed guidance in respect of the test to be applied by the lower tribunals and courts in determining claims for asylum protection based on sexual orientation. |
Farstad Supply A/S owned a vessel called the Far Service. On 4 February 1994, Aberdeen Service Company (North Sea) Ltd (Asco UK Ltd) chartered the Far Service from Farstad. Asco UK Ltd is a wholly owned subsidiary of ASCO plc, a major oil and gas logistics company registered in Scotland. They wished to use the Far Service to supply and service offshore installations. Enviroco Ltd cleans ships on an industrial scale among other things and is also registered in Scotland. Until 1999 it too, like Asco UK Ltd, was a wholly owned subsidiary of ASCO plc. In November 1999, in connection with a joint venture with Stoneyhill Waste Management Ltd, Envirocos shares were converted into equal numbers of A and B ordinary shares. ASCO plc held the A Shares whereas Stoneyhill held the B Shares. By their 1994 contract, known as a charterparty, both Farstad and Asco UK Ltd agreed to indemnify and hold each other harmless in relation to certain liabilities. Importantly, Farstad further agreed to indemnify Asco UK Ltds Affiliates, who were defined by reference to the meaning of subsidiary in section 736 of the Companies Act 1985, including any amendments. On 7 July 2002, Enviroco was employed to clean the oil tanks of the Far Service. While the tanks were being cleaned, a fire occurred causing the death of one of Envirocos employees and substantial damage to the Far Service. Farstad, the owner of the Far Service, brought a claim in Scotland against Enviroco for losses it allegedly suffered as a consequence of the fire. Farstad claimed approximately 2.7 million. Enviroco sought to rely on the indemnity clauses in the 1994 charterparty on the basis that it was an Affiliate of Asco UK Ltd because each of them was a subsidiary of ASCO plc. Prior to the fire, ASCO plc had entered into a Deed of Pledge with the Bank of Scotland in order to secure some of its obligations. By a Scottish share pledge, ASCO plc gave the Bank of Scotland security over the A ordinary shares held by it in Enviroco by re registering the shares in the name of the banks nominee company. Whether or not Enviroco could rely on the indemnity depended on whether the fact that the shares in Enviroco were registered in the nominees name meant that Enviroco was not a subsidiary of ASCO plc at the time of the fire and therefore not an Affiliate for the purposes of the 1994 charterparty. Whether or not Enviroco was a subsidiary of ASCO plc in turn depended on whether ASCO plc was a member of Enviroco at the relevant time. The Court of Appeal decided that because the shares were registered in the name of the banks nominee company at the time of the fire, ASCO plc was not a member of Enviroco. Thus Enviroco was not a subsidiary of ASCO plc so it could not rely upon the indemnity clauses. The Supreme Court unanimously dismisses Envirocos appeal and holds that Enviroco was not a subsidiary because ASCO plc was not a member of Enviroco. Lord Collins gives the main judgment. Lord Hope and Lord Rodger give shorter judgments elucidating the position in Scots law. The legislation makes clear that a member of a company is the person on the register. Where it is necessary to apply the legislation to persons who are not on the register, special provisions are made [35] [39]. This is an unusual case. ASCO plc turned Enviroco into a joint venture company and then charged the shares to a Scottish bank by following the necessary Scots law procedure. However, to find in Envirocos favour would have required the Court to engage in an impermissible form of judicial legislation [49]. |
By this appeal Mr and Mrs Hancock, the appellants, seek to show that the redemption of the loan notes, issued to them in connection with the sale of their shares in their company, Blubeckers Ltd, fell outside the charge to capital gains tax (CGT) by virtue of the exemption in section 115 of the Taxation of Chargeable Gains Act 1992 (TCGA) for disposals of qualifying corporate bonds (QCBs). QCBs are essentially sterling only bonds. The appellants structured the disposal of their Blubeckers Ltd shares in three stages. (1) Stage 1 was the exchange of Blubeckers Ltd shares for notes, which, being convertible into foreign currency, were not QCBs. (2) At Stage 2, the terms of some of those notes were varied so that they became QCBs. (3) At Stage 3, both sets of notes (QCBs and non QCBs) were, together and without distinction, converted into one series of secured discounted loan notes (SLNs), which were QCBs. The SLNs were subsequently redeemed for cash. It is said to be the result of the completion of Stages 2 and 3 that the appellants are not chargeable to CGT. The noteworthy feature for present purposes of the redemption process was that, following the reorganisation, some of the loan notes issued as consideration were converted into QCBs. TCGA confers rollover relief on the disposal of securities as part of a reorganisation; this means it brings securities issued as consideration into charge for CGT purposes but then defers the tax until their subsequent realisation. This is less favourable to the taxpayer than the exemption in TCGA, section 115. The roll over provisions constitute a carve out from the exemption in TCGA, section 115. They extend to certain conversions involving QCBs. The appellants seek to fall outside that carve out (and thus within the exemption in TCGA, section 115). The appellants appealed to the First tier Tribunal regarding the chargeable gain arising on the redemption of the SLNs. The First tier Tribunal held that the conversions were to be treated as a single conversion for the purposes of section 116(1) of the TCGA such that the transaction avoided CGT. HMRC appealed to the Upper Tribunal and the Upper Tribunal allowed HMRCs appeal holding that the conversion of securities at the third stage comprised separate transactions in relation to each share converted. As the First tier Tribunal had pointed out, the relief under section 116 for QCBs had been intended to promote the market in sterling bonds and so the interpretation favoured by the appellants would go well beyond that objective. The appellants appealed to the Court of Appeal and the Court of Appeal dismissed their appeal. The Court of Appeal considered that, although the wording of the carve out could be read literally in favour of the taxpayers, that result would be contrary to Parliaments intention. The issue before the Supreme Court is whether section 116 of the TCGA applies where by a single transaction, both non QCBs (which are within the charge to capital gains tax on redemption) and QCBs (which fall outside the charge to capital gains tax on redemption) are converted into QCBs. The Supreme Court unanimously dismisses the appeal. Lady Arden, with whom the rest of the Court agrees, delivers the judgment. It was common ground that, if the conversion at Stage 3 involved separate conversions of the QCBs and the non QCBs, the appeal must fail. The question whether there was a single conversion, or two separate conversions, must be a question of applying the provisions of TCGA to the facts. The answer is not mandated in the appellants favour by the fact that they utilised a single transaction [19]. Plainly, section 116(1)(b) contemplates the possibility of a single transaction which involves a pre conversion holding of both QCBs and non QCBs, and this, coupled with the fact that the Court of Appeals interpretation renders the words or include appearing in section 116(1)(b) otiose are powerful arguments in support of the appellants construction [20]. However, the appellants interpretation would be inexplicable in terms of the policy expressed in these provisions, which is to enable all relevant reorganisations to benefit from the same rollover relief. Taxpayers could avoid those provisions with extreme ease if the appellants are right [21]. By looking to the fiscal policy behind the scheme, the Court of Appeal applied a purposive approach [22]. The Court of Appeal did not give any meaning to the words or include in section 116(1)(b), but this is appropriate because in section 132(3), as the Upper Tribunal pointed out, it is clear that the intention of Parliament was that each security converted into a QCB should be viewed as a separate conversion. Moreover, it is not an objection that section 127 contemplates a single asset because Parliament has required sections 127 to 131 to be applied with necessary adaptations. In those circumstances the clear words principle is observed in the present case [23]. There are cases where to achieve Parliaments obvious intention a strained interpretation may need to be taken in place of one which would be contrary to the clear intention of Parliament. This principle can apply even to a tax statute. However, the circumstances in which such an approach can be applied must be limited, for example, to those where there is not simply some inconsistency with evident Parliamentary intention but some clear contradiction with it. Moreover, the intention of Parliament must be clearly found on the wording of the legislation [24]. Nothing in Lady Ardens judgment detracts from that principle, but it is unnecessary to consider its application to this case because the construction of the relevant provisions is clear without resort to it [26]. Lady Arden concluded that, in summary, on the true interpretation of TCGA section 116(1)(b), the potential gain within the non QCBs was frozen on conversion and did not (to use Lewison LJs words) disappear in a puff of smoke [27]. |
On 3 May 2006, the vessel Alexandros T sank and became a total loss 300 miles south of Port Elizabeth with considerable loss of life. Her owners were Starlight Shipping Company (Starlight). Starlight made a claim against their insurers, who denied liability on the basis that the vessel was unseaworthy with the privity of Starlight. In response, Starlight made a number of serious allegations against their insurers including allegations of misconduct involving tampering with and bribing of witnesses. On 15 August 2006, Starlight issued proceedings in the Commercial Court against various insurers (the 2006 proceedings). One group of insurers was described as the Company Market Insurers (CMI) and the other group was described as the Lloyds Market Insurers (LMI). Before the hearing, the 2006 proceedings were settled between Starlight and the insurers and the proceedings were stayed by way of a Tomlin Order. In April 2011, nine sets of Greek proceedings, in materially identical form, were issued by Starlight although they were expressed as torts actionable in Greece. The insurers sought to enforce the earlier settlement agreements. Starlight applied for a stay of these proceedings, firstly pursuant to Article 28 then Article 27 of Council Regulation (EC) No 44/2001 (the Regulation) The judge refused to grant a stay under Article 28 and gave summary judgment to the insurers. The Court of Appeal held that it was bound to stay the 2006 proceedings under Article 27, which provides for a mandatory stay, and it was not therefore necessary to reach a final determination of the position under Article 28. Before the Supreme Court, the insurers challenge the correctness of the Court of Appeals conclusion under Article 27 and submit that the judge was correct to refuse a stay under Article 28. Starlight cross appeal on the Article 28 point. Subject to the possibility of a reference to the CJEU on some limited questions, the Supreme Court unanimously allows the CMIs and LMIs appeal. Lord Clarke gives the lead judgment, with which Lord Sumption and Lord Hughes agree. Lord Neuberger agrees adding a short judgment of his own. Lord Mance agrees with the result. Article 27 Article 27 must be construed in its context. The purpose of Article 27 is to prevent the courts of two Member States from giving inconsistent judgments and to preclude, so far as possible, the non recognition of a judgment on the ground that it is irreconcilable with a judgment given by the court of another Member State [23, 27]. In the case of each cause of action relied upon, it is necessary to consider whether the same cause of action is being relied upon in the Greek proceedings. In doing so, the defences advanced in each action must be disregarded [29]. The essential question is whether the claims in England and Greece are mirror images of each other and thus legally irreconcilable [30]. There are three heads of claim in England: indemnity, exclusive jurisdiction and release [32]. None of the causes of action relied upon in the Greek proceedings has identity of cause or identity of object with the CMIs claim for an indemnity. The subject matter of the claims is different. The Greek proceedings are claims in tort (or its Greek equivalent) and the claims in England are claims in contract. As to object, that of the Greek proceedings is to establish a liability under Greek law akin to tort, whereas the object of the CMIs claim is to establish a right to be indemnified in respect of such a liability and to claim damages for breach of the exclusive jurisdiction clauses [34]. The same is true of the CMIs claims in respect of the exclusive jurisdiction clauses in the settlement agreement and/or in the insurance policies [36]. The causes of action based upon an alleged breach of the settlement agreement are not the same causes of action as are advanced in Greece [37]. The same is also true of the claims based on the release provisions in the CMI settlement agreement [40]. The Greek claims are claims in tort and the English proceedings are contractual claims. The factual bases for the two claims are entirely different. Moreover, the object of the two claims is different [41]. The Supreme Court is unanimous that that is the position with regard to the claims for damages for breach of the release provisions in the settlement agreements. However, in so far as the insurers claim declarations, while the majority reaches the same conclusion, Lord Mance reaches a different conclusion on the basis that the claims for declarations in the two jurisdictions are mirror images of each other. The court unanimously decides that, unless the insurers abandon those claims for declarations, the relevant question should be referred to the CJEU for an opinion [59]. In the event, the CMI have now abandoned their claims for declarations based on the release provisions and it is not necessary to refer the question to the CJEU. It follows that the CMIs appeals under Article 27 are allowed. The position of the LMI is essentially the same as in the case of the CMI [55]. If the LMI do the same within the time permitted, their appeals will also be allowed under Article 27. A similar position has been reached in respect of LMIs submission that the appeals under Article 27 should have been rejected by the Court of Appeal as being too late [123]. Article 28 The discretion to stay claims under Article 28 is limited to any court other than the court first seised [74]. On the assumption that the English court is second seised for the purposes of Article 28, the question arises whether the actions should be stayed as a matter of discretion [91]. The circumstances of each case are of particular importance but the aim of Article 28 is to avoid parallel proceedings and conflicting decisions. In a case of doubt it would be appropriate to grant a stay [92]. However, the natural court to consider the issues raised by CMI and LMI is the High Court in England because they raise contractual questions governed by English law and because it is at least arguable that the parties have agreed that they should be decided by the High Court, where the proceedings are more advanced than in Greece [96]. The decision of the judge in refusing a stay under Article 28 is upheld and the cross appeal is dismissed [97, 125]. |
These appeals concern the question whether customs officers have the power to detain goods which they reasonably suspect may be liable to forfeiture. In Eastenders, customs officers entered Eastenders premises and inspected consignments of alcoholic goods. Eastenders' employees were unable to provide documentary evidence that duty had been paid on the goods. The officers decided to detain the goods pending the outcome of further enquiries. The Commissioners subsequently stated that the goods had been detained under section 139 of the Customs and Excise Management Act 1979, which empowers customs officers to seize or detain "anything liable to forfeiture under the customs and excise Acts." [3 4] Eastenders applied for judicial review of the decision to detain those goods that were subsequently returned when the officers' enquiries proved inconclusive. Mr Justice Sales dismissed the application, holding that, where the Commissioners had reasonable grounds to suspect that goods might be liable to forfeiture, they had the power under section 139(1) to detain them for a reasonable time while they made enquiries. The Court of Appeal reversed that decision, holding that section 139(1) applied only where goods were actually liable to forfeiture. [5 7]. The Commissioners appeal to the Supreme Court. In First Stop, customs officers detained alcoholic goods at First Stop's premises, on suspicion that duty had not been paid, while enquiries were made. Written notices were provided stating that the goods had been detained "pending evidence of duty status (CEMA 1979, section 139)". Most of them were subsequently seized and the remainder returned to First Stop [8]. First Stop successfully applied for judicial review of the decision to detain the goods. Mr Justice Singh held that the detention was unlawful as the reason given for it was the need for investigation. The Court of Appeals judgment in Eastenders meant that goods could not lawfully be detained under section 139(1) for that purpose. However, the Court of Appeal disagreed with his interpretation, and decided that the effect of Eastenders was that if goods were in fact "liable to forfeiture", detention for a reasonable time was lawful under section 139(1) irrespective of the reason given for it [9 12]. Mr Justice Singh also held that the Commissioners were not protected from an order for costs by section 144(2) of the 1979 Act (which applies where officers had reasonable grounds for detaining goods) as the reason they gave for detaining the goods was unlawful. The Court of Appeal held that this was inconsistent with Eastenders. First Stop appeal against both decisions [12]. In a judgment delivered by Lord Sumption and Lord Reed, the court unanimously allows the Commissioners' appeal in Eastenders, dismisses First Stop's first appeal and allows its second appeal. The right to seize or detain property under section 139(1) is dependent on the property actually being liable to forfeiture. This turns on objectively ascertained facts; not on beliefs or suspicions, however reasonable. This is apparent when one looks at section 139(1) in the context of other provisions in the Act. For example, other powers are expressly stated to be exercisable on the basis of suspicion or belief [23], whereas the section 139(1) power is not. However, this interpretation would have troubling implications were there no other power to detain goods. It is essential in practice that customs officers should be able to secure goods where, following an examination, it is necessary to carry out further enquiries investigations that might lead to their seizure. If there were no other power of detention, then detention on the basis of suspicion would be unlawful in all cases where the suspicion turned out to be unfounded, and this would be problematic in terms of compliance with EU law and Convention standards on legal certainty [24]. In neither case however had it been argued that the power to detain could have a source other than section 139(1). But customs officers have long had a statutory power to examine goods in order to determine the duty payable or whether the goods are liable to forfeiture. Prior to the enactment in the Customs and Excise Act 1952 of the power to detain goods liable to forfeiture, the courts interpreted customs officers' statutory powers of examination as including, by necessary implication, an authority to detain goods on reasonable suspicion for such time as was reasonably necessary in order to make enquiries allowing officers to make their determination [26 35]. When enacting the 1952 Act, Parliament did not impliedly abolish that power of detention, which is not conditional upon the goods being liable to forfeiture [37; 52]. In Eastenders, the officers were entitled to detain the goods for a reasonable period in order to complete their enquiries; they were carrying out a lawful inspection of the goods for the purpose of determining whether the appropriate duties had been paid, and had reasonable grounds to suspect that they had not been [49]. In First Stop, the officers' examination was not completed until the necessary enquiries had been made, and the power of examination impliedly included an ancillary power of detention for a reasonable time while these enquiries were undertaken [50 51]. Detention in both cases was therefore lawful. The section 144(2) costs protection did not apply as both judicial review applications ought to have been dismissed. The parties are invited to make submissions on costs on the basis that the court possessed its ordinary costs discretion [52 55]. |
This appeal concerns the legislation which governs the Construction Industry Scheme (the CIS), which was introduced in order to counter widespread tax evasion by sub contractors in the construction industry. It requires certain contractors to deduct and pay over to Her Majestys Revenue and Customs (HMRC) a proportion of all payments made to the sub contractor in respect of labour under a sub contract. The amount deducted and paid over is, in due course, allowed as a credit against the sub contractors liability to HMRC. However, sub contractors with statutory certificates of gross payment registration are exempt from those requirements. That tends to make any sub contractor holding a certificate a more attractive party for a contractor to deal with. It also improves the sub contractors cash flow by enabling the sub contractor to receive the contract price without deduction. The appellant company (the company) is a family run business of water well engineers, started in 1972. In around 1984 the company registered for gross payment under the CIS. It then underwent regular reviews to determine whether it ought to retain its registration certificate. It first failed a review in July 2009, when its registration was cancelled. The same occurred in June 2010. On both occasions the registration was reinstated by HMRC following an appeal. Between August 2010 and March 2011 the company was late in making PAYE payments on seven occasions. The delays were generally of a few days, but on one occasion of at least 118 days. It is accepted that the company failed to comply with the requirements of the CIS without reasonable excuse. At that time the company had about 25 employees and an annual turnover of about 4.4m, much of it derived from contracts with a small number of major customers. A further review followed. On 30 May 2011 HMRC, acting under section 66(1) of the Finance Act 2004, cancelled the companys registration. In doing so, HMRC took no account of the consequences for the companys business. The companys appealed to the First tier Tribunal (FTT) which accepted the companys evidence that the cancellation, once it took effect, would have had a seriously detrimental impact on the company. The FTT allowed the companys appeal, holding that HMRC had been wrong not to take account of the likely impact on the companys business. However, that decision was overturned by the Upper Tribunal with which the Court of Appeal agreed. The company now appeals to the Supreme Court. The Supreme Court unanimously dismisses the appeal. Lord Carnwath gives the judgment, with which Lord Mance, Lord Sumption, Lord Lloyd Jones and Lord Briggs agree. The statutory requirements for registration for gross payment are highly prescriptive. They are contained in the Finance Act 2004. They include a requirement that the applicant for registration complied, within the previous 12 months, with various tax obligations subject to an exception for non compliance with reasonable excuse. Section 66(1) of the Act provides that the Board of Inland Revenue may at any time make a determination cancelling a persons registration for gross payment where certain conditions are satisfied. The word may imports an element of discretion. The dispute is as to the scope of that discretion [5 8]. The company makes two arguments. First, that the discretion under section 66 is unfettered in its terms, which do not exclude consideration of the consequences of cancellation for the company. The company argues that, without any indication to the contrary, the impact on the company must be a relevant consideration [16 17]. Second, the company relies on right to protection of property under Article 1 of the First Protocol to the European Convention on Human Rights (A1/P1). It argues that cancellation clearly involves an interference with the possessions represented by (at least) the sub contractors entitlement to the full contract price or the bundle of rights inherent in registration [18]. A1/P1 provides: Every natural or legal person is entitled to the peaceful enjoyment of his possessions No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. HMRC generally adopt the reasoning of the Court of Appeal and do not accept that cancellation involves an interference with a possession for the purposes of A1/P1. Alternatively, HMRC rely on the wide margin afforded to Member States under the Convention in fiscal matters [19 20]. The Supreme Court holds that the Court of Appeal was correct. Apart from the Convention, the companys first argument, that the discretion under section 66 is unfettered, overlooks the basic principle that any statutory discretion must be exercised consistently with the objects and scope of the statutory scheme. The discretion does not extend to consideration of matters which relate neither to the requirements for registration for gross payment, nor to the objective of securing compliance with those requirements. The scheme is highly prescriptive, setting out narrowly defined conditions for registration in the first place, including a record of tax compliance. The same conditions are brought into the cancellation procedure by section 66. The mere fact that the cancellation power is discretionary rather than mandatory is unsurprising. Some element of flexibility allows for cases where the failure is limited, temporary and poses no practical threat to the objectives of the CIS. It is wholly inconsistent with that tightly drawn scheme for there to be implied a general dispensing power [21 22]. Turning to A1/P1, there is force in the argument of HMRC that, even if the rights conferred by registration amount to possessions, they cannot extend beyond the limits set by the legislation by which they are created. However, it is unnecessary to decide the appeal on that basis, since the Court of Appeal correctly held that any interference with A1/P1 rights was proportionate. Once it is accepted that the statute does not in itself require the consideration of the impact on the individual taxpayer, there is nothing in A1/P1 which would justify the court in reading in such a requirement [23]. |
This appeal concerns the scope of the exclusion in a marine insurance policy for loss caused by inherent vice in the subject matter insured. The oil rig Cendor MOPU had been laid up in Galveston, Texas. In May 2005, it was purchased by the Respondents for conversion into a mobile offshore production unit for use off the coast of Malaysia. The Respondents obtained insurance from the Appellant for carriage of the oil rig on a towed barge from Texas to Malaysia. The policy covered all risks of loss or damage to the subject matter insured except as provided in Clauses 4 . Clause 4.4 excluded loss, damage or expense caused by inherent vice or nature of the subject matter insured. The oil rig consisted of a platform and three legs extending down to the seabed. The legs were massive tubular structures, made of welded steel and cylindrically shaped, with a diameter of 12 feet and a length of 312 feet. Each weighed 404 tons. The rig was carried on the barge with its legs in place above the platform, so that the legs extended some 300 feet into the air. The tug and barge set off from Galveston in August 2005 and arrived at Saldanha Bay, just north of Cape Town, in October 2005 where some repairs were made to the legs. The voyage then resumed but on the evening of 4 November 2005 one leg broke off and fell into the sea. The following evening the other two legs fell off. The breakages were the result of metal fatigue caused by the motion of the waves. In addition, the impact of a leg breaking wave was required to generate the final fracture. The weather experienced on the voyage was within the range that could reasonably have been contemplated. The Respondents made a claim under the policy for the loss of the three legs. The Appellant rejected the claim and the matter came for trial before the Commercial Court. The Judge held that the proximate cause of the loss was the fact that the legs were not capable of withstanding the normal incidents of the insured voyage, including the weather reasonably to be expected. Therefore the cause was inherent vice within the meaning of Clause 4.4 and the Appellant was not liable. The Court of Appeal reversed the decision, holding that the proximate cause of the loss was an insured peril in the form of the leg breaking wave. The Appellant appealed to the Supreme Court. The Supreme Court unanimously dismisses the appeal. The Court finds that the cause of the loss was an insured peril rather than inherent vice. The issue before the Supreme Court was whether the proximate cause of the loss was an insured peril, in the form of the stresses put upon the oil rig by the height and direction of the waves encountered on the voyage, or inherent vice in the subject matter insured. The reason for the focus on the proximate cause is to be found in section 55 of the Marine Insurance Act 1906, which provides that an insurer is liable for any loss proximately caused by a peril insured against. The proximate cause is not the cause closest in time to the loss, but that which is proximate in efficiency. The 1906 Act also contains provision regarding inherent vice: section 55(2)(c) provides that an insurer is not liable for inherent vice in the subject matter insured. It was not suggested that the exception in Clause 4.4 for inherent vice bore any different meaning to that in the 1906 Act: [17] [23]. The classic definition of inherent vice is that of Lord Diplock in Soya GmbH Mainz Kommanditgesellschaft v White [1983] 1 Lloyds Rep 122: It means the risk of deterioration of the goods shipped as a result of their natural behaviour in the ordinary course of the contemplated voyage without the intervention of any fortuitous external accident or casualty. The Supreme Court relied and expanded upon that definition. Lord Mance noted that the reference to the ordinary course of the contemplated voyage was not intended to embrace weather conditions foreseeable on such a voyage. Further, there is no apparent limitation in the qualification without the intervention of any fortuitous external accident or casualty. Thus anything that would otherwise count as a fortuitous external accident or casualty will suffice to prevent the loss being attributed to inherent vice: [80]. The Supreme Court also emphasised that the question of the proximate cause is to be answered, as Bingham LJ noted in T M Noten BV v Harding [1990] Lloyds Rep 283, applying the common sense of a business or seafaring man: [19]. Applying these principles, it was not possible to fit the facts of the current case into any normal conception of deterioration of the goods shipped as a result of their natural behaviour in the ordinary course of the contemplated voyage. The loss had many obvious characteristics which one would associate with a fortuitous marine accident or casualty and that was how it should be seen. In particular, the breaking of the legs was neither expected nor contemplated. It only occurred under the influence of a wave of a direction and strength catching the first leg right at the right moment, leading to increased stress on and collapse of the other two legs in turn: [46]; [65]; [84]. The fact that the legs were not capable of withstanding the normal incidents of the insured voyage, in particular the weather reasonably to be expected, did not make inherent vice the proximate cause. If that were the case, the cover would only extend to loss or damage caused by perils of the sea that were exceptional, unforeseen or unforeseeable. That would frustrate the purpose of all risks cargo insurance, which is to provide an indemnity in respect of loss or damage caused by, among other things, all perils of the sea: [35]. The Court therefore held that the proximate cause of the loss was a peril of the sea, for which the insurers were liable, and not inherent vice. |
These cases relate to the cap on housing benefit introduced by the Secretary of State under Regulation B13 of the Housing Benefit Regulations 2006 (SI 2006/2013) (Reg B13), often described as the removal of the spare room subsidy or the bedroom tax. The cap is determined according to a number of factors, including whether the number of bedrooms in the home exceeds the number the claimant is entitled to. The number of bedrooms a claimant is entitled to depends on the number of occupants, their ages and sexes and whether any are a couple. A claimant is entitled to an additional bedroom in some specific situations relating to disability need. There is also a statutory scheme for enabling Discretionary Housing Payments (DHPs) to be made to individuals entitled to housing benefit who may require an extra room. As the title indicates, these are discretionary. The claimants in these appeals all live in social sector housing where the number of bedrooms exceeds the number to which they are entitled to under Reg B13. Their housing benefit has been capped accordingly. They are challenging the validity of Reg B13 as it applies to their individual circumstances on the basis that it violates their right to non discrimination under article 14 of the European Convention on Human Rights (ECHR), in conjunction with their right to family life under article 8 and/or property under article 1 of the First Protocol (there is no dispute that housing benefit falls within the scope of these latter articles). They also contend there has been a breach by the Secretary of State of the Public Sector Equality Duty (PSED) under the Equality Act 2010 (the Equality Act), which obliges public authorities to have due regard to the need to eliminate discrimination and advance equality of opportunity between persons who share protected characteristics and those that do not. Mrs Carmichael, Mr Rourke, Mr Drage, JD and Mr Daly (the MA claimants), all either have disabilities or live with family members who have disabilities (see Appendix 1 for details of the claimants factual circumstances). Their cases were heard together in the Court of Appeal which accepted that Reg B13 had a discriminatory effect on some people with disabilities, but held that the discrimination was justified. The MA claimants needs could be met as necessary though the DHP scheme based on individual assessments. The Court also found that there had been no breach of the PSED. The MA claimants challenge these decisions. The Rutherford family and A had their cases heard together in the Court of Appeal (differently constituted). The Rutherfords succeeded in their claim on the ground of disability discrimination. A lives in a sanctuary scheme house (accommodation specially adapted to provide protection for women under severe risk of domestic violence); her claim succeeded on the grounds of sex discrimination. Both A and the Rutherfords Equality Act claims were rejected. The Secretary of State appeals the Court of Appeals decision to allow the Rutherfords and As discrimination claims. A cross appeals the rejection of her Equality Act claim. In respect of the MA claimants discrimination claims, the Supreme Court unanimously allows the appeal of Mrs Carmichael and dismisses the other claimants appeals. The MA claimants appeals under the Equality Act are unanimously dismissed. The Secretary of States appeal in respect of the Rutherford family is unanimously dismissed. The Secretary of States appeal in respect of A is allowed, and As cross appeal is dismissed, by a majority of 5 to 2. Lord Toulson gives the lead judgment. Lady Hale gives a dissenting judgment in relation to A in respect of both the Secretary of States appeal and As cross appeal, with which Lord Carnwath agrees. The normal test in cases involving questions of economic and social policy is whether the discrimination is manifestly without reasonable foundation. The question of how to deal with the impact of Reg B13 on individuals with disabilities is a clear example of a question of economic and social policy; the housing benefit cap scheme is integral to the structure of the welfare benefit scheme. The Court of Appeal was therefore correct to apply this test [28 38]. In respect of the application of the test, the Court of Appeal was correct that the Secretary of States decision to structure the housing benefit cap scheme as he did was reasonable [40 41]. However, some people with disabilities have a transparent medical need for an additional bedroom. Reg B13 recognises this and entitles claimants to an additional bedroom in the case of children (but not adults) who cannot share a bedroom because of their disabilities or adults (but not children) in need of an overnight carer [42]. Mrs Carmichael, is an adult who cannot share a room with her husband due to her disabilities. The Rutherfords require a regular overnight carer for their grandson with severe disabilities. There appears to be no reason to distinguish between adult partners who cannot share a bedroom because of disability and children who cannot do so because of disability; or between adults and children in need of an overnight carer. The decisions in relation to Mrs Carmichael and the Rutherfords were therefore manifestly without reason [46 49]. In relation to the other MA claimants, their need for an additional bedroom is not connected, or not directly connected, to their/their family members disability. Therefore, whilst there may be good reasons for them to receive state benefits to cover the full rent, it is not unreasonable for their claims to be considered on an individual basis under the DHP scheme [51 54]. A, has a strong case for staying in her current house; it has been adapted under the sanctuary scheme and she feels safe where she is [58]. However, there is no automatic correlation between being in a sanctuary scheme and requiring an extra bedroom: the reason that A currently has an additional bedroom is that no two bedroom properties were available when she moved. The Court has considerable sympathy for A as she has strong social and personal reasons for staying, however, these are unrelated to the property size. The fact that people may have strong reasons unrelated to the number of bedrooms, for wanting to stay in their property is taken account of through the DHPs. It therefore does not follow that A has a valid claim for unlawful sex discrimination [59 64]. Although the state has a positive duty to provide effective protection to victims of gender based violence the means by which such protection is provided is not mandated and A has not established that Reg B13 will deprive her of a safe haven [65]. The PSED is a duty on the part of a public authority to follow a form of due process [67]. On the history of events and the evidence, the Secretary of State properly considered the potential impact of the housing benefit cap scheme on individuals with disabilities [68]. Although the Secretary of State did not specifically consider the impact of Reg B13 on those within sanctuary schemes, he did address the question of gender discrimination [69 70]. The MA claimants appeal, and As cross appeal, under the Equality Act, are therefore dismissed [71]. Lady Hale, with whom Lord Carnwath agrees, would have dismissed the Secretary of States appeal in respect of A. The state has a positive obligation to provide effective protection for victims of domestic violence [73]. A failure to do so constitutes discrimination as it has been internationally recognised that gender based violence is a form of discrimination against women [74]. Sanctuary schemes provide such protection [75]. As reduction in housing benefit puts at risk her ability to stay there and therefore constitutes discrimination [76]. DHPs are not good enough to justify this discrimination; it is not acceptable for A to endure the additional difficulties and uncertainties involved in obtaining them [77]. Lady Hale would also have allowed As cross appeal. The PSED was not properly complied with as there was no assessment of the impact of Reg B13 on victims of gender based violence; a disadvantage suffered by women who share a protected characteristic [79 80]. |
Section 3C of the Immigration Act 1971 extends a persons leave to remain pending determination of an application to vary the period of leave, so long as the application is made before the original leave has expired. All three appeals before the Court raise the issue of how section 3C applies where an application is made in time, but for some reason is procedurally defective. Sections 50 and 51 of the Immigration, Nationality and Asylum Act 2006 enable the Secretary of State to lay down in immigration rules procedural requirements for applications, including provision for the payment of a fee and the consequences of failure to comply. Similarly, sections 5 and 7 of the UK Borders Act 2007 provide the power to make regulations regarding the provision of biometric information and the effect of failure to comply with these. Mr Iqbal was granted entry clearance in January 2007 to come to the UK as a student, later extended to 30 April 2011. On 19 April 2011 he applied for further leave to remain as a student, although unaware that the fee had recently increased, he paid the old, lower fee. His application was rejected as invalid for that reason, and his leave expired. Mr Mirza entered the UK under a student visa which was valid until 31 March 2009. His application to extend leave was rejected for non payment of the fee when the Secretary of State was unable to take the 295 application fee from his bank. In Ms Ehsans case she had entry clearance until 28 December 2011. She applied for further leave on 23 December 2011 and was contacted by the Secretary of State, requesting that she make an appointment to provide certain biometric information. She was told by letter dated 26 March 2012 that her application was returned as invalid because of her failure to make and attend an appointment for providing biometric information. A new application made on 3 April 2012 subsequently failed. All three appellants applied for judicial review of the Secretary of States decisions, and following refusal of permission to apply for judicial review in the High Court/Upper Tribunal, permission to appeal was granted by the Court of Appeal. The Court of Appeal dismissed their joined appeals on the basis that section 3C did not extend to an application which was not validly made in accordance with the rules. The Supreme Court unanimously dismisses the appeals. Lord Carnwath gives the judgment, with which the other Justices agree. The public are entitled to the legislative scheme being underpinned by a coherent view of the meaning of the rules and regulations. The court agrees with the Court of Appeal as to the need for rationalisation and simplification [30]. The approach to the present appeals must be based on the legislation as it stands, since there has been no challenge to the legality or rationality of the rules and regulations. Ordinary principles of statutory interpretation are to be used, starting from the natural meaning of the words in their context. On this basis, the Court of Appeal in respect of Mr Iqbal and Mr Mirza reached the correct conclusion. There is no ambiguity in the words of regulation 37 of the 2011 Regulations: if an application is not accompanied by the specified fee it is not validly made. An application not validly made can have no substantive effect [33]. It does not matter that section 3C was enacted before the provisions of the 2006 Act or the regulations made under it, because the powers given by Parliament in the later Act were made within the same legislative framework as the 2002 Act. This does not equate with permitting the executive to alter the interpretation of primary legislation [34]. The Court of Appeal was also right in rejecting Mr Iqbals ground of appeal based on alleged unfairness. The comments of the Upper Tribunal in Basnet do not lay down a universal rule and although it is unfortunate that he was caught out by a change in fees, there was no failure by the Secretary of State to publicise that change. The problem only arose because the application had been made very close to the expiry of leave [35]. In the case of Ms Ehsan the situation is slightly different. While the obligation to pay fees arises at the time of the application, the requirement to apply for biometric information only arises at a later stage. Thus, while an application without the fee will be invalid from the outset, it is difficult to see why a failure at the biometric information stage should retrospectively invalidate an application from the outset, nullifying any section 3C extension to her leave to remain. There is no reason to read section 7 of the 2007 Act as having retrospective effect. Rather, the natural reading is to give power to invalidate the application from the time of the decision. However this reading would not help Ms Ehsan because even if her leave continued until the date of the Secretary of States decision on 26 March 2012, it would not assist her in respect of her new application made on 3 April 2012 [36 7]. |
By a time charter dated 11 September 2008, on an amended NYPE form, the owners NYK Bulkship (NYK) chartered the vessel Global Santosh to charterers Cargill International (Cargill) for one time charter trip (the charter). Cargill sub chartered the vessel to Sigma Shipping. The vessel carried a cargo of cement from Slite, Sweden to Port Harcourt, Nigeria, pursuant to a contract of sale between Transclear SA (as sellers) and IBG Investments Ltd, which had the ultimate obligation to discharge the cargo. Transclear had probably sub chartered the vessel, but whether this was from Sigma or by a more indirect link was not clear. Under that sale contract, IBG was to pay demurrage to Transclear in the event of delay in discharge beyond the agreed laytime in the contract. If that demurrage was unpaid, Transclear was purportedly granted a lien over the cargo. The vessel arrived at Port Harcourt on 15 October 2008 and tendered notice of readiness. She was instructed to remain at anchorage because of port congestion (caused, at least in part, by the breakdown of IBGs off loader). She proceeded to berth on 18 December 2008, but was ordered back to anchorage and arrested on the basis of a Nigerian court order arising from a claim by Transclear to secure a demurrage claim against IBG. This was an obvious mistake, because the order should have directed the arrest of the cargo, not the vessel. Following an agreement between Transclear and IBG, the vessel finally began discharging on 15 January 2009 and completed discharge on 26 January 2009. Cargill withheld hire for the period of the arrest. It relied on an off hire clause in the charter, clause 49, which stated that the vessel should be off hire during any period of detention or arrest by any authority or legal process during the charter, with the proviso unless such capture or seizure or detention is occasioned by any personal act or omission or default of the Charterers or their agents. Cargill commenced London arbitration claiming hire, but the arbitrators determined that the proviso in clause 49 did not apply during the period of the arrest. On an appeal, the Commercial Court allowed the appeal, holding that IBGs failure to discharge within the laydays under its contract of sale with Transclear and to pay demurrage were omissions in the course of discharging, and remitted the question of causation back to the arbitrators. The Court of Appeal dismissed the appeal, on the basis that the delay to the vessel fell within the charterer sphere of responsibility. Cargill appealed to the Supreme Court. The Supreme Court allows Cargills appeal by a majority of four to one, holding that the vessel was off hire throughout the period of arrest and that the proviso in clause 49 was not engaged. Lord Sumption gives the lead judgment, with which Lord Neuberger, Lord Mance and Lord Toulson agree. Lord Clarke writes a dissenting judgment, and would have dismissed the appeal and held that the vessel was on hire. This appeal raises a question as to the meaning of charterers agents in clause 49 of the charter. If a ship is sub let under a charter, the charter operates as a contract under which rights are enjoyed and obligations performed vicariously [14]. Agents is not used in its strict legal sense, but is used to refer to persons or subcontractors to whom the charterers rights are made available further down the chain, or who satisfy the time charterers obligations that have been delegated to them [19]. Not everything that a subcontractor does can be regarded as the exercise of a right or the performance of an obligation under a time charter. For the purposes of clause 49, there must be a sufficient nexus between the occasion for the arrest and the function which Transclear or IBG were performing as agent of Cargill [21]. The arrest was not occasioned by any personal act or omission or default of the Charterers or their agents. Firstly, Cargill was only responsible for IBGs acts or omissions in the actual performance of cargo handling operations while they were in progress. Cargill had no obligation to procure discharge at any particular time, and no contractual interest in the timing of the operation. In failing to carry out cargo handling operations between 15 October 2008 and 15 January 2009, IBG was not vicariously exercising Cargills rights, nor was it vicariously breaching Cargills obligations under the charter [28]. Secondly, the arrest was occasioned by a dispute between Transclear and IBG about demurrage under the sub charter. That was not the vicarious exercise of any right made available to Cargill under the time charter [30]. The Court of Appeal was wrong to approach the matter by asking in whose sphere of responsibility the matters occasioning the arrest lay. The only sense in which the arrest was occasioned by Cargills trading arrangements concerning the vessel was that Cargills sub charter to Sigma enabled Transclear and IBG to become involved further down the chain, and it was their dispute that caused the arrest. That ignores the need for a sufficient nexus between the acts leading to the arrest and the performance of functions under the charter [31]. Lord Clarke, in a dissenting judgment, would have held that the vessel was on hire during the period of the arrest. The agency extended to the operation of the vessel from the giving of the notice of readiness (or perhaps earlier), until the completion of discharge. An arrest during the period during which she was waiting to discharge is the same as an arrest in the course of the discharging operations [36]. The arrest had nothing to do with NYK, but was linked to Cargills discharge functions delegated to Transclear and IBG. An absence of cargo handling operations is just as much defective performance of them. This solution makes commercial sense, because the parties knew that demurrage might be incurred down the line, because it was common ground that the vessel was not off hire by reason of IBGs earlier failure to provide a working off loader, and because the owners had no control over Cargills delegation to Transclear and IBG [34 58]. |
This judgment deals with two English cases, while a separate judgment deals with the Scottish case Eba v Advocate General for Scotland. The issue common to all three is the scope for judicial review by the High Court or Court of Session of unappealable decisions of the Upper Tribunal established under the Tribunals, Courts and Enforcement Act 2007 (the 2007 Act). In all of them the claimant failed in an appeal to the First tier Tribunal and was refused permission to appeal to the Upper Tribunal against that decision both by the First tier Tribunal and by the Upper Tribunal. In all three the claimant seeks a judicial review of the refusal of permission to appeal by the Upper Tribunal. The tribunal systems with which the three cases are concerned, both before and after their restructuring in the 2007 Act, are common to both parts of the United Kingdom, and in many contexts also to Northern Ireland. Part 1 of the 2007 Act established a new unified tribunal structure, which accommodates a diversity of jurisdictions. There is a right of appeal to the Court of Appeal, in England and Wales or Northern Ireland, or the Court of Session in Scotland, on any point of law arising from a decision made by the Upper Tribunal other than an excluded decision (s 13(1), (2)). Excluded decisions include any decision of the Upper Tribunal on an application for permission or leave to appeal (s 13(8)(c)). Mr Cart appealed to the Social Security and Child Support Tribunal (whose jurisdiction has since been taken over by the First tier Tribunal) against the refusal of the Child Support Agency to revise a variation in the level of child maintenance to be paid to his ex wife. His appeal was dismissed. He applied for permission to appeal to the Child Support Commissioners (whose functions were subsequently taken over by the Administrative Appeals Chamber of the Upper Tribunal). Commissioner Jacobs gave him permission to appeal on three grounds but refused him permission to appeal on a fourth. The Upper Tribunal dismissed his appeal on the first three grounds and declined permission to reopen the fourth. Mr Cart sought judicial review of the Upper Tribunals refusal of permission to appeal on the fourth point. Determining the amenability of the Upper Tribunal to judicial review as a preliminary issue, the Divisional Court dismissed his claim for judicial review, holding that this was only available in exceptional circumstances. The Court of Appeal dismissed his appeal, reaching the same result but by a different route. MR is a native of Pakistan whose application for asylum was refused. His appeal to the Immigration and Asylum chamber of the First tier Tribunal was dismissed. Both the First tier Tribunal and then the Upper Tribunal refused his application for permission to appeal to the Upper Tribunal. MR sought judicial review of the Upper Tribunals refusal of permission to appeal. Sullivan LJ dismissed the judicial review claim in accordance with the decision of the Court of Appeal in Cart. He granted a certificate so that the appeal against his decision could leap frog over the Court of Appeal and be heard by this Court together with the appeals in Cart and Eba. The Supreme Court unanimously dismisses the appeals but on a different basis from that adopted in the Divisional Court and the Court of Appeal. It decides that permission for judicial review should only be granted where the criteria for a second tier appeal apply, that is where there is an important point of principle or practice or some other compelling reason to review the case. Lady Hale gives the leading judgment. The scope of judicial review is an artefact of the common law whose object is to maintain the rule of law. The question is, what machinery is necessary and proportionate to keep mistakes of law to a minimum? What level of independent scrutiny outside the tribunal structure is required by the rule of law? [37], [51] There are three possible approaches which the Court could take. First, that the scope of judicial review should be restricted to the exceptional circumstances identified in the Divisional Court and Court of Appeal, namely pre Anisminic excess of jurisdiction and the denial of fundamental justice (and possibly other exceptional circumstances). Second, that unrestricted judicial review should be available. Third, that judicial review should be limited to the grounds upon which permission to make a second tier appeal to the Court of Appeal would be granted, namely (a) the proposed appeal would raise some important point of principle or practice, or (b) there is some other compelling reason for the court to hear the appeal. [38] While the introduction of the new system may justify a more restricted approach, the exceptional circumstances approach is too narrow, leaving the possibility that serious errors of law affecting large numbers of people will go uncorrected. As regards the second approach, it is well known that the High Court and Court of Appeal were overwhelmed with judicial review applications in immigration and asylum cases until the introduction of statutory reviews. The mere fact that something has been taken for granted without causing practical problems in the social security context until now does not mean that it should be taken for granted forever. [44], [47], [51] The adoption of the second tier appeals criteria would be a rational and proportionate restriction upon the availability of judicial review of the refusal by the Upper Tribunal of permission to appeal to itself. It would recognise that the new and in many ways enhanced tribunal structure deserves a more restrained approach to judicial review than has previously been the case, while ensuring that important errors can still be corrected. It is a test which the courts are now very used to applying. It is capable of encompassing both the important point of principle affecting large numbers of similar claims and the compelling reasons presented by the extremity of the consequences for the individual. There is clearly nothing in Mr Cart or MRs cases to bring them within the second tier appeal criteria. [57], [59], [128], [130], [131], [133] Per Lord Phillips. Where statute provides a structure under which a superior court or tribunal reviews decisions of an inferior court or tribunal, common law judicial review should be restricted so as to ensure, in the interest of making the best use of limited judicial resources, that this does not result in a duplication of judicial process that cannot be justified by the demands of the rule of law. [89] |
Following a referendum, various provisions of the Government of Wales Act 2006 (the 2006 Act) came into force on 5 May 2011. These provisions gave the National Assembly for Wales (the Assembly) primary legislative competence in certain areas [5]. If there is an issue as to whether a Bill, or a provision in a Bill, passed by the Assembly exceeds legislative competence, the issue can be referred to the Supreme Court [6]. The Local Government Byelaws (Wales) Bill 2012 (the Bill) was the first Bill to be enacted by the Assembly under these new powers. The aim of the Bill is to simplify procedures for making and enforcing local authority byelaws in Wales [7]. Certain provisions of the Bill are intended to remove the need for the confirmation of byelaws by the Welsh Ministers and by the Secretary of State [8]. This need arises by virtue of the Local Government Act 1972 (the 1972 Act) and the National Assembly for Wales (Transfer of Functions) Order 1999 (the 1999 Order). The effect of section 236(11) of the 1972 Act is that, where a statutory provision giving a local authority the power or duty to make the byelaw either so provides or is silent as to the existence or identity of a confirmatory body or person, before any byelaw made under that provision by a local authority can be effective, the Secretary of State has to confirm the byelaw [16]. Schedule 1 to the 1999 Order provides that the functions of the Secretary of State under section 236(11) of the 1972 Act shall be exercisable by the Assembly concurrently with the Secretary of State [20]. The Attorney General referred to the Supreme Court the question whether sections 6 and 9 of the Bill were within the Assemblys legislative competence [1]. Section 6 of the Bill (through Part 1 of Schedule 1 to the Bill) removes the need for the confirmation of byelaws under certain specific enactments (the scheduled enactments) which currently require confirmation under section 236(11) of the 1972 Act. Section 9 would empower the Welsh Ministers to add to the scheduled enactments [8]. The specific issue in relation to sections 6 and 9 was whether either section removed the Secretary of States role in confirming (or refusing to confirm) byelaws made under statutory provisions which are (i) scheduled enactments, and (ii) provisions to which section 236(11) applies. If either section removed this role, they would be beyond the legislative competence of the Assembly, unless they were incidental to, or consequential on another provision contained in the Bill [46]. The Supreme Court unanimously declares that the Assembly had the legislative competence to enact sections 6 and 9 of the Bill. Lord Neuberger gives the leading judgment. Lord Hope gives guidance on some matters of practice regarding the making of such references. Section 6 is within the legislative competence of the Assembly [66],[83]. The removal of the Secretary of States confirmatory powers in relation to the scheduled enactments would be incidental to, and consequential on, the primary purpose of removing the need for confirmation by the Welsh Ministers of any byelaw made under the scheduled enactments [52],[53]. The primary purpose of the Bill cannot be achieved without that removal [54]. The Secretary of States confirmatory power is concurrent with that of the Welsh Ministers [55]. It is open to either the Secretary of State or the Assembly to exercise any functions which are exercisable concurrently [37]. Where a function is vested in two Ministers concurrently, either may perform it, acting alone, on any occasion [40]. It is far more sensible and consistent with the purpose of the Welsh Government legislation to conclude that the Assembly and the Secretary of State were each intended to have the power to exercise the concurrent functions, and that it was to be left to their good sense to decide which should exercise a particular function in a particular case [41]. The confirmatory power is only given to the Secretary of State if no other statute (including one passed after the 1972 Act) confers the function on any other body or person, which supports the notion that it is not an important function [56]. The scheduled enactments relate to byelaws in respect of which the Secretary of State is very unlikely ever to exercise his confirmatory power [57]. Section 9 is within the legislative competence of the Assembly [66],[84]. Section 9 has a limited effect, because the jurisdiction of the Assembly is limited to removing, or delegating the power to remove, functions of the Secretary of State where this would be incidental to, or consequential on, the purpose of removing the need for confirmation by the Welsh Ministers of any byelaw made under the scheduled enactments, and the Assembly cannot therefore bestow wider powers than this on the Welsh Ministers [63]. The same conclusion can be arrived at by invoking section 154(2) of the 2006 Act, which provides that a provision of a Bill which could be read in a way as to be outside the Assemblys legislative competence is to be read as narrowly as is required for it to be within that competence [64]. The outcome of this reference is in favour of the Assembly, but it cannot be regarded as a setback in practical terms for the Secretary of State, because the conclusion the Supreme Court has reached as to the effect of section 9 of the Bill is one which reflects the terms on which the Secretary of State was prepared to give consent to section 6 of the Bill [67]. The outcome is also entirely consistent with the general thrust of the extended powers given to the Welsh Ministers by the 2006 Act [68]. Guidance on matters of practice In terms of the relevant rules and practice direction, the reference should not have been served on the Assembly. Rather, it should have been served on the Counsel General in his capacity as a relevant officer having a potential interest in the proceedings. He can then become a respondent if he notifies the Registrar that he wishes to participate [90],[93]. As no form has been laid down for use in the case of references (as opposed to appeals) involving devolution issues, it is open to the referring law officer or court to adopt whatever style and layout is thought to be most appropriate in the circumstances. The Registrar must however be provided with certain information for administrative purposes [94]. Appearing as a contradictor to a challenge to the legislative competence of a Bill or an Act of the Assembly is not one of the Assembly Commissions functions under the 2006 Act. The appropriate person to represent the public interest in resisting such a challenge is the Counsel General. There may however be cases in which the court will allow the Assembly or the Assembly Commission to participate as an intervener [99],[100]. |
The appeals concern the entitlement to compensation of persons whose criminal convictions were subsequently quashed for being unsafe. The Appellants, Mr Hallam and Mr Nealon, spent, respectively, about seven years and 17 years in prison before their convictions were eventually quashed for being unsafe in light of newly discovered evidence. They subsequently applied for compensation under section 133 of the Criminal Justice Act 1988 (as amended by section 175 of the Anti social Behaviour, Crime and Policing Act 2014). The Secretary of State for Justice refused their applications on the ground that the new evidence did not show beyond reasonable doubt that they had not committed the offences. The Appellants argue that the requirement contained in section 133(1ZA) that a new or newly discovered fact must show beyond reasonable doubt that the person did not commit the offence, in the absence of which they are unable to claim compensation, is incompatible with the presumption of innocence contained in Article 6(2) of the European Convention on Human Rights (ECHR). Both the Divisional Court (Burnett LJ and Thirlwall J) and the Court of Appeal (Lord Dyson MR, Sir Brian Leveson P and Hamblen LJ) refused to make the declarations of incompatibility sought. By a majority of five to two, the Supreme Court dismisses the appeals. Lord Mance delivers the leading judgment. Lady Hale, Lord Wilson, Lord Hughes and Lord Lloyd Jones deliver concurring judgments. Lord Reed and Lord Kerr dissent. In the previous case of R (Adams) v Secretary of State for Justice [2011] UKSC 18, the Supreme Court identified four categories of case, of progressively wider scope, as a framework for discussing the meaning of miscarriage of justice for which an applicant could be compensated in accordance with section 133: (i) where the fresh evidence shows clearly that the defendant is innocent of the crime of which he had been convicted; (ii) where the fresh evidence so undermines the evidence against the defendant that no conviction could possibly be based upon it; (iii) where the conviction rendered the conviction unsafe because, had it been available at the time of trial, a reasonable jury might or might not have convicted; (iv) where something had gone seriously wrong in the investigation of the offence or the conduct of the trial, resulting in the conviction of somebody who should not have been convicted. The Court held that categories (i) and (ii) fell within the meaning of the phrase miscarriage of justice, and that section 133 was compatible with Article 6(2), which provides that everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. The appeal thus obliges the Supreme Court to consider whether it should depart from its previous decision in Adams in the light of the decision in Allen v United Kingdom, where the European Court of Human Rights (ECtHR) held that an applicants Article 6(2) right was not violated in a category (iii) case, and in the light of the introduction of section 133(1ZA), which defined miscarriage of justice so as to limit the entitlement to compensation to category (i) cases. Lord Mance holds that whether there exists a link between the criminal charge and, for instance, civil proceedings arising from the same facts is a diversion from the real question, namely whether the court in addressing the other, civil claim has suggested that the criminal proceedings should have been determined differently. If it has, it has exceeded its role. [47] Lord Mance would refuse to depart from Adams or follow the case law of the ECtHR if and insofar as the ECtHR may have, in the past, gone further than this. [48] Even if that is wrong and article 6(2) is in fact engaged, a separate question arises of whether section 133(1ZA) is nevertheless compatible with the Convention because it confines compensation to cases where the newly discovered evidence shows beyond doubt that the defendant did not commit the offence. This question has never been directly before the ECtHR or decided by it, and Lord Mance is far from confident that the Court would conclude that section 133(1ZA) is incompatible if the question were argued before it. [61] Although it is in general wise for the Supreme Court to find that an applicants rights have been breached where it is clear that the ECtHR would find a violation of the Convention, Lady Hale is persuaded that it is not so clear in this case. [76] Her Ladyship agrees with Lord Reed that article 6(2) is engaged, but it does not follow that the ECtHR would automatically find a violation. She also agrees with Lord Mances formulation of the test. [78] Lady Hale also considers the ECtHRs jurisprudence in this area to be evolving [79] and it is not appropriate for the court to make a declaration of incompatibility in proceedings brought by an individual in respect of whom the ECtHR would be unlikely to find a violation (the facts of these cases being equivalent to those in Allen where no violation was found). [81] [82] Lord Wilson would dismiss the appeal on the basis that the ECtHRs case law on article 6(2) has become hopelessly confused. [85] Lord Wilson cannot subscribe to the ECtHRs analysis in this area, despite the high professional regard in which he holds its judges, the desirability of a uniform interpretation of article 6(2) throughout the states of the Council of Europe, his belief that there is no room left for further constructive dialogue between this court and the ECtHR, and his recognition that the appellants are likely to prevail before the ECtHR in establishing a violation of their Convention rights. [94] Lord Hughes would dismiss the appeals for reasons which substantially, although not explicitly, overlap with those of both Lord Mance and Lord Wilson. [127] Different legal systems adopt different compensation schemes for those wrongfully convicted and, in some jurisdictions, even for those who were detained pending their trial. The ECtHR has been at pains to say that neither article 6(2) nor any other rule provides an unqualified right to be compensated in such circumstances. A person who seeks compensation after their conviction has been quashed is merely seeking to bring himself within the legitimate restrictive eligibility requirements for such compensation. Thus, even if there existed a workable test for finding the requisite link between an earlier (eventually quashed) conviction and the later compensation proceedings, such a link would not exist in this case, because the latter can only be said to be based on the former to the extent that the first condition for eligibility for compensation is that a conviction has been quashed. [123] [124] Lord Lloyd Jones agrees with Lord Mance and attaches particular importance to the fact that the ECtHR has not yet directly addressed the issue of why it is objectionable to require evidence establishing innocence but it is not objectionable to require evidence establishing that the claimant could not reasonably have been convicted. Having regard to the unsettled state of the ECtHRs case law, Lord Lloyd Jones is not persuaded that section 133 is incompatible with the Convention. These matters require consideration by the ECtHR. [137] [138] Lord Reed would have allowed the appeal. The critical factors (identified by the ECtHR in Allen) in establishing the necessary link are that the quashing of the conviction is a prerequisite of proceedings under section 133 and that in order to arrive at a decision on the claim it is necessary for the Secretary of State to examine the judgment of the Court of Appeal to determine whether the criteria of section 133 were satisfied. [170] Whilst it may be appropriate for this Court to decline to follow the ECtHR in certain circumstances, no circumstances of that kind exist here: the Grand Chambers judgment in Allen was carefully considered, is based on a detailed analysis of the relevant case law, is consistent with a line of authority going back decades, and has been followed by the ECtHR subsequently. [174] In the absence of some compelling justification, Lord Reed finds it difficult to accept that this court should deliberately adopt a construction of the Convention which it knows to be out of step with the ECtHRs approach, established by numerous judgments, and confirmed at the level of the Grand Chamber. [175] Lord Reed accepts that the implication of the decision in Allen is that it is not necessarily incompatible with article 6(2) to refuse compensation under section 133 in in category (iii) cases, but holds that section 133(1ZA) is not compatible with article 6(2), because it effectively requires the Secretary of State to decide whether persons whose convictions are quashed have established that they are innocent. [187] Lord Kerr agrees with Lord Reed. For the reasons given by Lord Reed, Lord Kerr considers that there exists the requisite link between the concluded criminal proceedings and the compensation proceedings, which is the test articulated in a clear and constant line of Strasbourg jurisprudence. [205] His Lordship also rejects Lord Mances formulation of the relevant test because it would cut out a swathe of deserving applicants who are unable to prove their innocence even though they are, in fact, innocent and the fate of applicants would be determined by the phraseology that happened to be chosen by the court. [206] |
The appellant is the owner of a hydroelectric power plant in Kazakhstan. The respondent is the current operator of that plant. The concession agreement between the parties contains a clause providing that any disputes arising out of, or connected with, the concession agreement are to be arbitrated in London under International Chamber of Commerce Rules. For the purposes of this appeal the parties are agreed that the arbitration clause is governed by English law. The rest of the concession agreement is governed by Kazakh law. Relations between the owners and holders of the concession have often been strained. In 2004 the Republic of Kazakhstan, as the previous owner and grantor of the concession, obtained a ruling from the Kazakh Supreme Court that the arbitration clause was invalid. In 2009 the appellant, as the current owner and grantor of the concession, brought court proceedings against the respondent in Kazakhstan seeking information concerning concession assets. The respondents application to stay those proceedings under the contractual arbitration clause was dismissed on the basis that the Kazakh Supreme Court had annulled the arbitration clause by its 2004 decision. Shortly thereafter the respondent issued proceedings in England seeking (a) a declaration that the arbitration clause was valid and enforceable and (b) an anti suit injunction restraining the appellant from continuing with the Kazakh proceedings. An interim injunction was granted by the English Commercial Court and the appellant subsequently withdrew the request for information which was the subject of the Kazakh proceedings. However, the respondent remained concerned that the appellant would seek to bring further court proceedings in Kazakhstan in breach of the contractual agreement that such disputes should be subject to arbitration in London. As a result the respondent continued with the proceedings. The English Commercial Court found that they were not bound to follow the Kazakh courts conclusions in relation to an arbitration clause governed by English law and refused to do so. The Commercial Court duly granted both the declaratory and final injunctive relief sought. The appellant appealed to the Supreme Court of the United Kingdom on the grounds that English courts have no jurisdiction to injunct the commencement or continuation of legal proceedings brought in a foreign jurisdiction outside the Brussels Regulation/Lugano regime where no arbitral proceedings have been commenced or are proposed. The Supreme Court unanimously dismisses the appeal. The English courts have a long standing and well recognised jurisdiction to restrain foreign proceedings brought in violation of an arbitration agreement, even where no arbitration is on foot or in contemplation. Nothing in the Arbitration Act 1996 (the 1996 Act) has removed this power from the courts. The judgment of the court is given by Lord Mance. An arbitration agreement gives rise to a negative obligation whereby both parties expressly or impliedly promise to refrain from commencing proceedings in any forum other than the forum specified in the arbitration agreement. This negative promise not to commence proceedings in another forum is as important as the positive agreement on forum [21 26]. Independently of the 1996 Act the English courts have a general inherent power to declare rights and a well recognised power to enforce the negative aspect of an arbitration agreement by injuncting foreign proceedings brought in breach of an arbitration agreement even where arbitral proceedings are not on foot or in contemplation [19 23]. There is nothing in the 1996 Act which removes this power from the courts; where no arbitral proceedings are on foot or in prospect the 1996 Act neither limits the scope nor qualifies the use of the general power contained in section 37 of the Senior Courts Act 1981 (the 1981 Act) to injunct foreign proceedings begun or threatened in breach of an arbitration agreement [55]. To preclude the power of the courts to order such relief would have required express parliamentary provision to this effect [56]. The 1996 Act does not set out a comprehensive set of rules for the determination of all jurisdictional questions. Sections 30, 32, 44 and 72 of the 1996 Act only apply in circumstances where the arbitral proceedings are on foot or in contemplation; accordingly they have no bearing on whether the court may order injunctive relief under section 37 of the 1981 Act where no arbitration is on foot or in contemplation [40]. The grant of injunctive relief under section 37 of the 1981 Act in such circumstances does not constitute an intervention as defined in section 1(c) of the 1996 Act; section 1(c) is only concerned with court intervention in the arbitral process [41]. The reference in section 44(2)(e) of the 1996 Act to the power of the court to grant an interim injunction for the purposes of and in relation to arbitral proceedings was not intended to exclude or duplicate the courts general power to grant injunctive relief under section 37 of the 1981 Act [48]. Service out of the jurisdiction may be affected under Civil Procedure Rule 62.2 which provides for service out where an arbitration claim affects arbitration proceedings or an arbitration agreement; this provision is wide enough to embrace a claim under section 37 to restrain foreign proceedings brought or continued in breach of the negative aspect of an arbitration agreement [49]. |
The appeal relates to the Hague Convention on the Civil Aspects of International Child Abduction 1980 (the Convention) and to section 1(2) of the Child Abduction and Custody Act 1985. It is brought within proceedings issued by a mother (Spanish national living in Spain) against a father (British national living in England) for the summary return of their four children (T (a girl aged 13), L (a boy aged 11), A (a boy aged 9) and N (a boy aged 5)) from England to Spain. The Convention stipulates that, subject to narrow exceptions, a child wrongfully removed from, or retained outside, his or her place of habitual residence shall promptly be returned to it. The test for determining whether a child is habitually resident in a place is now whether there is some degree of integration by him or her in a social and family environment there. The principal question in this appeal is whether the courts may, in making a determination of habitual residence in relation to an adolescent child who has resided for a short time in a place under the care of one of his or her parents, have regard to that childs state of mind during the period of residence there. A subsidiary question is whether, in this case, the trial judge erred in exercising his discretion to decline to make the eldest child, T, a party to the proceedings. The parents met in England and lived in this country throughout their relationship, which ended early in 2012. On 24 July 2012 the mother and the four children, who were all born in the UK, moved to Spain where they then lived with their maternal grandmother. It was agreed that the children would spend Christmas with their father and on 23 December 2012 they returned to England. They were due to return to Spain on 5 January 2013. Shortly before they were due to fly, the two older boys hid the familys passports and they missed the plane. On 21 January 2013 the mother made an application under the Convention for the childrens return to Spain. The father applied for T to be joined as a party so that she might be separately represented, which the High Court refused. The High Court found all four children to be habitually resident in Spain and thus that they had been wrongfully been retained by their father. The judge acknowledged that the eldest, T, objected to being returned to Spain but determined that she should nonetheless be returned along with the three younger children. The Court of Appeal dismissed the appeal against the judges finding that the childrens habitual residence was in Spain. However, the Court of Appeal reversed the judges decision to return T to Spain finding that, so robust and determined were Ts objections, they should be given very considerable weight. The Court of Appeal concluded that the appropriate course was to remit to the judge the question whether it would be intolerable to return the three younger children to Spain in light of the fact that T was not going to go with them. The Court of Appeal dismissed the appeals not only of L and A but also of T against the High Courts failure (in Ts case, refusal) to make them parties to the proceedings. The Supreme Court unanimously finds that Ts assertions about her state of mind during her residence in Spain in 2012 are relevant to a determination whether her residence there was habitual. The Supreme Court sets aside the conclusion that T was habitually resident in Spain on 5 January 2013 and remits the issue to the High Court for fresh consideration. The Supreme Court also sets aside the finding of habitual residence in respect of the three younger children so that the issue can be reconsidered in relation to all four children. The Supreme Court unanimously also concludes that T should have been granted party status and that the Court of Appeal should have allowed her appeal against the judges refusal of it. Lord Wilson gives the lead judgment of the Court. Courts are now required, in analysing the habitual residence of a child, to search for some integration of her in a social and family environment [34]. Where a child goes lawfully to reside with a parent in a state in which that parent is habitually resident it will be highly unusual for that child not to acquire habitual residence there too. However, in highly unusual cases there must be room for a different conclusion, and the requirement of some degree of integration provides such room [37]. No different conclusion will be reached in the case of a young child. Where, however, the child is older, particularly where the child is or has the maturity of an adolescent, and the residence has been of a short duration, the inquiry into her integration in the new environment may warrant attention to be given to a different dimension [37]. Lady Hale, with whom Lord Sumption agrees, would hold that the question whether a childs state of mind is relevant to whether that child has acquired habitual residence in the place he or she is living cannot be restricted only to adolescent children [57]. In her view, the logic making an adolescents state of mind relevant applies equally to the younger children, although the answer to the factual question may be different in their case [58]. The Court notes that what can be relevant to whether an older child shares her parents habitual residence is not the childs wishes, views, intentions or decisions but her state of mind during the period of her residence with that parent [37]. The Court rejects the suggestion that it should substitute a conclusion that T remained habitually resident in England on 5 January 2013 [42]. The inquiry into Ts state of mind in the High Court had been in relation to her objections to returning to Spain and was not directly concerned with her state of mind during her time there [42 (i)]. In addition, the mother has not had the opportunity to give evidence, nor to make submissions, in response to Ts statements to the Cafcass (Children and Family Court Advisory and Support Service) officer regarding her state of mind when in Spain [42 (v)]. Lady Hale expresses grave doubts about whether sending the case back to the High Court for further enquiries into the childrens states of mind would be a fruitful exercise [67]. However, in the interest of justice, she concludes that it should nonetheless be sent back [86]. The majority do not think the state of mind of L or A could alone alter the conclusion about their integration in Spain, but note another significant factor, namely the presence of their older sister, T, in their daily lives [43]. In relation to the habitual residence of the three younger children and in the light of their close sibling bond, the majority query whether Ts habitual residence in England (if such it was) might be a counterweight to the significance of the mothers habitual residence in Spain [43]. Lady Hale agrees with this analysis when applied to the youngest child. [65]. With regard to the subsidiary appeal, the Court notes that an older child in particular may be able to contribute relevant evidence, not easily obtainable from either parent, about her state of mind during the period in question [49]. However, it is considered inappropriate to hear oral evidence from T even as a party. Instead, a witness statement from T; cross examination of the mother by Ts advocate; and the same advocates closing submissions on behalf of T should suffice to represent her contribution as a party [55]. |
The issue in this appeal is whether Lloyds Banking Group (LBG) is entitled to redeem 3.3 billion of enhanced capital notes (ECNs) which carry an interest rate of over 10% per annum. The capital requirements for financial institutions were, at the time of the issue of the ECNs, set out in the CRD I Directive, which arranged the capital of financial institutions in tiers, the highest of which was Core Tier 1 (CT1). In March 2009, the Financial Services Authority (the FSA), having stress tested LBG and found a shortfall, required it to raise 21 billion which could qualify as CT1 Capital. LBG raised some of this amount by issuing 8.3 billion of ECNs in December 2009. The ECNs were intended to satisfy criteria set out by the FSA in a statement issued in September 2009, which provided that hybrid capital instruments capable of supporting CT1 Capital by means of a conversion or write down mechanism at an appropriate trigger could qualify as CT1 Capital. The terms of the ECNs were contained in a Trust Deed (the Trust Deed), which included detailed terms and conditions (T&Cs). The ECNs were not redeemable until specified maturity dates, unless (i) converted into shares on the occurrence of a conversion trigger, being any time when LBGs CT1 ratio fell below 5%; or (ii) redeemed early by LBG on the occurrence of a Capital Disqualification Event (CDE). One of the two circumstances in which a CDE occurs is stated in clause 19(2) to be where, as a result of any changes to regulatory capital requirements, the ECNs cease to be taken into account in whole or in part for the purposes of any stress test in respect of the Consolidated CT1 ratio. In June 2013, a new directive, CRD IV, replaced CT1 Capital with a more restrictive category, Common Equity Tier 1 Capital (CET1 Capital) and effected other changes to capital requirements. In accordance with these changes, the successor to the FSA, the Prudential Regulation Authority (the PRA), confirmed that LBG was subject to a new 7% CET1 ratio standard and that the ECNs would need to have a trigger for conversion higher than 5.125% CET1 in order to count as core capital. In March April 2014, LBG exchanged 5 billion of ECNs for instruments which satisfied the new requirements. In December 2014, the PRA reported that LBGs CET1 ratio was 10.1% and its minimum stressed ratio was 5%. The ECNs were not taken into account in either assessment. On 16 December 2014, LBG announced that a CDE had occurred under clause 19(2) and that it was entitled to redeem the outstanding 3.3 billion ECNs. BNY Mellon Corporate Trustee Services Ltd (BNY Mellon), as trustee for the holders of the ECNs, issued proceedings challenging LBGs claim and denying that a CDE had occurred. At first instance, Sir Terence Etherton found for BNY Mellon. The Court of Appeal allowed LBGs appeal. BNY Mellon now appeals to the Supreme Court. The Supreme Court dismisses BNY Mellons appeal by a 3:2 majority. Lord Neuberger gives the leading judgment, with which Lord Mance and Lord Toulson agree. Lord Sumption gives a short dissenting judgment, with which Lord Clarke agrees. The Trust Deed cannot be understood unless one has some appreciation of the regulatory policy of the FSA at and before the time that the ECNs were issued [33]. Thus, the general thrust and effect of the FSA regulatory material published in 2008 and 2009 can be taken into account when interpreting the T&Cs [33]. BNY Mellon argued that the December 2014 stress test was not in respect of Consolidated Core Tier 1 ratio as specified in clause 19(2) of the T&Cs as CT1 had by this point been replaced by CET1 Capital [27]. This argument is rejected [35]. The reference to the Consolidated Core Tier 1 Ratio should, in the events which have happened, be treated as a reference to its then regulatory equivalent, being Common Equity Tier 1 Capital [35]. BNY Mellons second argument is that, in order for it to be said that the ECNs had not been taken into account, they must be disallowed in principle from being taken into account for the purposes of the Tier 1 ratio [27, 40]. The question is whether it is sufficient that the ECNs continue to be taken into account for some purpose in the stress test, or whether they must play a part in enabling LBG to pass that test, which they no longer do [40 42]. The preferable view is that the ECNs must play a part in enabling LBG to pass the stress test [45]. Under the Regulations passed in 2013, the ECNs cannot be taken into account so as to do the very job for which their convertibility was designed, namely to enable them to be converted before the regulatory minimum Tier 1 ratio is reached [45]. This conclusion is also supported by the contrast between ceased to be taken into account, the expression in clause 19(2), and a different expression, no longer eligible to qualify, which is in clause 19(1) [46]. Further, if the contrary view were correct, it is very difficult to envisage circumstances in which it could have been thought that clause 19(2) could have been invoked [47]. Accordingly, the Trustees appeal should be dismissed, on the basis that a CDE has arisen under clause 19(2) [54]. Lord Sumption, with whom Lord Clarke agrees, dissents on this point and considers that the ECNs are not redeemable because, notwithstanding their status as lower tier capital, they would be treated by the regulator as top tier capital in the hypothetical event that LBGs affairs deteriorated to the point where the conversion trigger was attained [55 62]. |
The respondent is a Sri Lankan Tamil. In 1992, at the age of 10, he became a member of the Liberation Tigers of Tamil Eelam (LTTE), the following year joining the LTTEs Intelligence Division. He occupied various positions of responsibility and gained promotions within the organisation. At 18 he was appointed to lead a mobile unit transporting military equipment and other members of the Intelligence Division through jungles to a point where armed members of the Division could be sent in plain clothes to Colombo. He continued to do this for some three years from September 2000 until early 2004 except for some two and a half months where he was appointed one of the chief security guards to the Intelligence Divisions leader, whom he accompanied as a trusted aide on visits to the LTTE District Leader and other prominent LTTE members. From early 2004 he served as second in command of the combat unit of the Intelligence Division. In October 2006 he was sent incognito to Colombo to await further instructions. In December 2006 the respondent learned that his presence in Colombo had been discovered by the Sri Lankan government and his LTTE membership known. On 7 February 2007 he arrived in the UK and two days later applied for asylum on the basis that if he returned to Sri Lanka he would face mistreatment due to his race and LTTE membership. The respondents application for asylum was refused by the Secretary of State (SoS) in September 2007 solely by reference to article 1F(a) of the Refugee Convention. It states that a person is not to be recognised as a refugee where there are serious reasons for considering that (a) he has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments drawn up to make provision in respect of such crimes. In his decision letter the SoS referred to the case of Gurung [2002] UKIAT 04870 (starred), which the SoS considered was authority for the proposition that voluntary membership of an extremist group could be presumed to amount to personal and knowing participation, or at least acquiescence amounting to complicity in the crimes in question. The SoS was of the view that the respondents own evidence showed voluntary membership and command responsibility within an organisation that has been responsible for widespread and systemic war crimes and crimes against humanity, such that there were serious reasons for considering that the respondent was aware of and fully understood the methods employed by the LTTE. The respondent sought judicial review of the SoSs decision. The Court of Appeal quashed the SoSs decision. The Court of Appeal held that as it was the design of some members of the LTTE to carry out international crimes in pursuit of the organisations political ends, the SoS acted on a wrongful presumption that the respondent, as a member of the LTTE, was guilty of personal and knowing participation in such crimes. He should have considered whether there was evidence affording serious reasons for considering that he was party to that design, that he had participated in a way that made a significant contribution to the commission of such crimes and that he had done so with the intention of furthering the perpetration of such crimes. The SoS appealed the decision. The Supreme Court unanimously dismisses the appeal, but varies the order made by the Court of Appeal to provide that in re determining the respondents asylum application, the SoS should direct himself in accordance with the Courts judgments, not those of the Court of Appeal. Lord Brown gives the leading judgment of the Court. Lord Hope and Lord Kerr give concurring judgments. The Court on this appeal has essentially three tasks. The first is to decide whether the Court of Appeal was right to quash the refusal decision and remit the case for redetermination by the SoS. Secondly, the Court has to decide on the correctness of the principles laid down in Gurung. The Courts third task is to decide whether the Court of Appeal was right to interpret war crimes liability under article 1F(a) as narrowly as they appeared to do, essentially so as to encompass no more than joint enterprise liability (para 26). In relation to the first issue, it could not be said of the LTTE or its Intelligence Division that as an organisation it was predominantly terrorist in character Gurung para 105. There was accordingly no question of presuming that the respondents voluntary membership of this organisation amounted to personal and knowing participation, or at least acquiescence amounting to complicity in the crimes in question. Nor was the respondents command responsibility within the organisation a basis for regarding him as responsible for war crimes (para 27). As to the second issue, there are criticisms to be made of Gurung and it should not in future be accorded the same standing as it seems hitherto to have enjoyed. o In the first place, it is unhelpful to attempt to carve out from amongst organisations engaging in terrorism a sub category of those whose aims, methods and activities are predominantly terrorist in character, and to suggest that membership of one of these gives rise to a presumption of criminal complicity Gurung para 105 (para 29). It is preferable to focus on what must prove to be the determining factors in any case, principally (in no particular order): the nature and (potentially of some importance) the size of the organisation and particularly that part of it with which the asylum seeker was himself most directly concerned, whether and, if so, by whom the organisation was proscribed, how the asylum seeker came to be recruited, the length of time he remained in that organisation and what, if any, opportunities he had to leave it, his position, rank, standing and influence in the organisation, his knowledge of the organisations war crimes activities, and his own personal involvement and role in the organisation including particularly whatever contribution he made towards the commission of war crimes. o The second major criticism to be made of Gurung is its introduction of the idea of a continuum in relation to the types of organisations, and their political aims and objectives, for war crimes cases. War crimes are war crimes however benevolent and estimable may be the long term aims of those concerned. And actions which would not otherwise constitute war crimes do not become so merely because they are taken pursuant to policies abhorrent to western liberal democracies (para 32). As to the third issue, article 1F disqualifies persons who make a substantial contribution to the crime, knowing that their acts or omissions will facilitate it (para 35). Criminal responsibility will only attach to those with the necessary mental element. But, as article 30 of the Rome Statute of the International Criminal Court makes plain, if a person is aware that in the ordinary course of events a particular consequence will follow from his actions, he is taken to have acted with both knowledge and intent (para 36). The Court of Appeal took too narrow an approach. It appeared to confine article 1F liability essentially to just the same sort of joint criminal enterprises as would result in convictions under domestic law. An accused is disqualified under article 1F if there are serious reasons for considering him voluntarily to have contributed in a significant way to the organisations ability to pursue its purpose of committing war crimes, aware that his assistance will in fact further that purpose (para 38). |
This appeal concerns the validity of confiscation orders made with the appellants consent. On 23 November 2007, three brothers, Patrick Mackle, Plunkett Jude Mackle (commonly known as Jude) and Benedict Mackle, all pleaded guilty to having been knowingly concerned in the fraudulent evasion of duty on cigarettes, contrary to Section 170(2)(a) of the Customs & Excise Management Act 1979. In a separate trial, on 18 November 2008, Henry McLaughlin pleaded guilty to a similar offence. He was also convicted of a second offence, on his plea of guilty, but that is not relevant to this appeal. On 13 December 2007 Deeny J sentenced Patrick Mackle to three years imprisonment, and Jude Mackle and Benedict Mackle to two and a half years imprisonment. All three sentences were suspended for five years. At a later hearing, on 29 October 2008, confiscation orders were made against Patrick Mackle for 518,387.00, and against Jude and Benedict Mackle for 259,193.00 each. The aggregate sum produced by these three amounts was equal to the amount of duty and Value Added Tax which had been evaded. The confiscation orders were made with the consent of each of the Mackle brothers. Henry McLaughlin was sentenced by Weatherup J on 19 November 2008 to one years imprisonment suspended for two years. The judge also imposed a serious crime prevention order for a period of five years. A confiscation order for 100,000 was made against Mr McLaughlin on the same date. This sum, taken together with other confiscation orders made against his co defendants, represented the total amount of duty and VAT said to have been evaded. The confiscation order against Mr McLaughlin was also made with his consent. Messrs Mackle and McLaughlin appealed against the consent orders on the grounds that they were made on the wrong legal basis. Confiscation orders must be made to recover the amount by which a defendant has benefited financially from the offence. The appellants argued that they could not have benefited financially from the offences if they were not liable to pay the duties they were concerned in avoiding. While they might have been liable under the previous duty regime, the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992, they did not fall within any of the categories of persons liable under the present regime, the Tobacco Products Regulations 2001. The Court of Appeal dismissed their appeals but certified that the following points of law of general public importance arose from its judgment: 1. Is a defendant who pleaded guilty to being knowingly concerned in the fraudulent evasion of duty and who consents, with the benefit of legal advice, to the making of a confiscation order in an agreed amount in circumstances which make clear that he does not require the Crown to prove that he obtained property or a pecuniary advantage in connection with the charged criminal conduct bound by the terms of the confiscation order? 2. Does a defendant who knowingly comes into physical possession of dutiable goods in respect of which he knows the duty has been evaded and plays an active role in the handling of those goods so as to assist in the commercial realisation of the goods benefit from his criminal activity by obtaining those goods for the purposes of section 158 of the Proceeds of Crime Act 2002? The Supreme Court unanimously allows all four appeals. Lord Kerr gives the judgment of the Court, with which the other Justices agree. As to the first question, the prosecution had firmly espoused the case that the benefit obtained by the appellants took the form of a pecuniary advantage derived from evasion of the duty on the cigarettes. This basis of benefit was, unsurprisingly, accepted uncritically by the sentencing judges. But since the appellants liability to pay duty could not be established this was not a correct legal basis on which to find that the appellants had obtained a benefit [47]. In holding that they might nonetheless be bound by the orders, since they were made with the appellants consent, it appears that the Court of Appeal had not been referred to decisions of the House of Lords and the Court of Appeal of England and Wales which established that an appeal ought to be available to defendants who had made a plea on a mistaken legal basis [4849]. It is to be remembered that a court must itself decide whether the convicted person has benefited from his particular criminal conduct. The power to make a confiscation order arises only where the court has made that determination. A defendants consent cannot confer jurisdiction to make a confiscation order. This is particularly so where the facts on which such a consent is based cannot as a matter of law support the conclusion that the defendant has benefited. On the other hand, if it is clear from the terms on which a defendant consents to a confiscation order, that he has accepted facts which would justify the making of an order, a judge, provided he is satisfied that there has been an unambiguous acceptance of those facts from which the defendant should not be permitted to resile, will be entitled to rely on the consent. This is not because the defendant has consented to the order. It is because his acceptance of facts itself constitutes evidence on which the judge is entitled to rely [50]. It would be manifestly unfair to require the appellants in this case to be bound by their consent to the confiscation orders when the only possible explanation for the consent was that it was given under a mistake of law. That was the explanation they had put to the Court of Appeal, and the prosecution had not challenged it [53]. And the confiscated amounts corresponded exactly to the duty and VAT evaded. Lord Kerr would therefore reframe the first certified question to reflect the circumstances of this case: Is a defendant precluded from appealing against a confiscation order made by consent on the ground that the consent was based on a mistake of law, as a result of wrong legal advice? The answer is, no. [54] As to the second question, the Court of Appeal dismissed the appeals because it considered the appellants could, have been found to have benefited from their admitted criminal conduct. But it advanced this view only on the basis of findings that might have been made by the trial judge, but were not in fact. The trial judge would have had to have been satisfied that the appellants had in fact benefited from the offences in such a way, having given them the opportunity of responding to that suggestion [5556]. In any event it was clear from previous House of Lords authority that merely handling goods or being involved in a joint criminal enterprise does not in itself confer a benefit. Lord Kerr would therefore answer the second question, Not necessarily. Playing an active part in the handling of goods so as to assist in their commercial realization does not alone establish that a person has benefited from his criminal activity. In order to obtain the goods for the purposes of section 156 of POCA 2002 or article 8 of the Proceeds of Crime (Northern Ireland) Order 1996, it must be established by the evidence or reasonable inferences drawn therefrom that such a person has actually obtained a benefit. [5768]. The Court therefore quashes the confiscation orders and remits the cases to the trial courts to proceed afresh in light of this judgment [69]. |
The appellants in these two appeals are prisoners serving sentences of life imprisonment imposed for murder, combined in the case of McGeogh with a later sentence of seven and a half years for violent escape from lawful custody. Both the appellants claim that their rights have been and are being infringed because they are not entitled to vote. United Kingdom law currently contains a general prohibition on voting by prisoners. In a series of cases (Hirst (No 2) v UK, Greens v UK and Scoppola v Italy) the European Court of Human Rights (ECtHR) has held that a blanket prohibition of this nature is an indiscriminate restriction on a vitally important right and, as such, incompatible with Article 3 of Protocol No 1 (A3P1, the duty to hold free and fair elections) of the European Convention on Human Rights (the Convention) [18 22]. The appellant Peter Chester issued a claim for judicial review in December 2008 in relation to UK and European Parliamentary elections. He relies on A3P1, as incorporated into domestic law by the Human Rights Act (the HRA), and also on European Community or now Union law (EU law). The appellant George McGeochs claim for judicial review was issued in February 2011 in relation to local and Scottish Parliamentary elections. He relies solely on EU law [1 3]. Both claims were dismissed by the courts below. The High Court and Court of Appeal held in Chesters case that it was not their role to sanction the Government for the delay in implementing the decision in Hirst (No 2) or to advise as to how the Government might implement a voting system that would be compatible with A3P1, and that EU law raised no separate issue. The Inner House dismissed McGeoghs claim on the ground that EU law only conferred a right to vote in municipal (i.e. local) elections on EU citizens residing in a Member State of which they were not nationals. The Supreme Court permitted McGeoch to add a complaint that his rights in relation to EU Parliamentary elections were also being infringed [2 3]. The issues before the Supreme Court are: (a) whether it should apply the principles established in Hirst (No 2);(b) whether, if such principles are applied, the current ban on voting is incompatible with Chesters rights under A3P1, and Supreme Court should make a further declaration of incompatibility under the HRA; (c) whether EU law recognises an individual right to vote, in terms paralleling or greater than that arising under A3P1, on which the appellants can rely upon as EU citizens claiming to vote in their own countries; and (d) what consequences would follow if EU law were to recognise an individual right to vote of this nature and, in particular, what if any relief would be available to Chester and McGeogh. The Supreme Court unanimously dismisses both appeals. Lord Mance gives the lead judgment. Lady Hale, Lord Clarke and Lord Sumption give additional judgments. With regard to claims under the Convention, the Supreme Court applies the principles in Hirst (No 2) and Scoppola regarding the blanket ban on voting, but declines to make any further declaration of incompatibility in respect of Chester [39 42]. With regard to EU law, this does not provide an individual right to vote paralleling that recognised by the ECtHR in its case law. The resolution of these appeals does not require a reference to the Court of Justice of the European Union (CJEU) [46 47, 58, 59, 63 64 and 68]. Claims under the Human Rights Act Under the HRA, the Supreme Court is required to take into account decisions of the ECtHR, not necessarily to follow them. This enables the national courts to engage in a constructive dialogue with the ECtHR. However, the prohibition on prisoner voting in the UK has now been considered by the Grand Chamber of the ECtHR twice and, on each occasion, found to be incompatible with A3P1. In these circumstances, it would have to involve some truly fundamental principle of law or the most egregious oversight or misunderstanding before it could be appropriate for the Supreme Court to refuse to follow Grand Chamber decisions of the ECtHR. The ban on prisoner voting is not a fundamental principle of law in the UK, and the circumstances do not justify a departure from the ECtHRs caselaw [25 35]. Accepting that, on the reasoning in Hirst (No 2), Chester was a victim for the purposes of the HRA and the Convention and entitled as such to bring a claim against the respondents, that does not necessarily entitle him to any particular remedy under the HRA. A declaration of incompatibility is a discretionary remedy. The incompatibility of the prohibition on prisoner voting in the UK with the Convention is already the subject of a declaration of incompatibility made in Smith v Scott and is currently under review by Parliament. In these circumstances there is no point in making a further declaration of incompatibility. This is particularly so in the case of Chester. Given that he is serving a sentence of life imprisonment, ECtHR caselaw indicates that he would not himself have a right to benefit from any amendments to the law on prisoner voting necessary to remedy the present incompatibility of UK law with the Convention [36 42]. That is so although his tariff period has expired and he remains in detention because his detention continues to be necessary for the protection of the public. Claims under EU law The provisions on voting contained in the applicable European Treaties focus on the core concerns of ensuring equal treatment between EU citizens residing in Member States other than that of their nationality, and so safeguarding freedom of movement within the EU. Eligibility to vote in Member States is basically a matter for national legislatures [58 59]. The CJEU has scrutinised national eligibility criteria for conformity with the EU legal principle of non discrimination in a context where Netherlands law extended the right to vote of its nationals to nationals resident in some, but not all, non EU States. But there is no equivalent link with EU law in the present cases [60 64]. Additional EU analysis For completeness, the Supreme Court has considered the consequences if, contrary to their conclusions, EU law were to regarded as conferring an individual right to vote on which McGeoch and Chester could rely. On that hypothesis, it considers that: The EU legal principle of non discrimination would still not be engaged. Convicted prisoners serving their sentence are not in a comparable position to persons not in prison [65 68] In any event, the general ban on prisoner voting could not have been disapplied as a whole, and the relevant domestic legislation could not have been interpreted compatibly with EU law. Nor could the Supreme Court itself have devised a scheme compatible with EU law; that would be for Parliament. Therefore, the only relief that might have been appropriate would have been a declaration that the legislative provisions governing eligibility to vote in European Parliamentary and municipal elections in the UK were inconsistent with EU law, although even that would not have appeared appropriate in the instant cases [72 74]. Neither of the appellants could have had any arguable claim for damages in respect of any breach of EU law [82 83]. |
Three prisoners brought appeals concerning the circumstances in which the Parole Board is required to hold an oral hearing. Osborn was convicted in 2006 following an incident in which he was said to have brandished an imitation firearm at the home of his estranged wife. He was given a six year prison sentence and was released on licence in February 2009, the halfway point. He was recalled to prison later that day for breach of his licence conditions [18 29]. Booth and Reilly are indeterminate sentence prisoners who have served their minimum terms. In 1981, Booth [30 42] received a discretionary life sentence for attempted murder, with a minimum term of six and a half years. Reilly [43 53] was convicted in 2002 of robbery, attempted robbery and possession of an imitation firearm. He received an automatic life sentence with a minimum term of six years and eight months, which expired in September 2009. Both remain in custody. Each case was considered on paper by the boards single member panel. It decided not to direct the prisoners release or recommend their transfer to open prison conditions. Their solicitors made written representations to the board, disputing its findings and requesting an oral hearing in each case, but those requests were refused. All three sought judicial reviews of the decisions not to offer oral hearings. Only Reilly succeeded in the High Court, which found that the board had breached its common law duty of fairness, and had acted incompatibly with the appellants rights under article 5(4) of the European Convention on Human Rights1 by failing to offer him an oral hearing. This was overturned by the Northern Ireland Court of Appeal. The Supreme Court unanimously allows the appeals and declares that the board breached its common law duty of procedural fairness to the appellants, and article 5(4) of the European Convention, by failing to offer them oral hearings [116]. 1 Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. The judgment, delivered by Lord Reed, emphasises that human rights protection is not a distinct area of the law based on the case law of the European Court, but permeates our legal system. Compliance with article 5(4) requires compliance with the relevant rules of domestic law [54 56]. The legal analysis of the problem does not begin and end with the Strasbourg case law [63]. Lord Reed sets out guidance (summarised at [2]) on complying with common law standards in this context. The board should hold an oral hearing whenever fairness to the prisoner requires one in the light of the facts of the case and the importance of what is at stake [81]. By doing so, it will act compatibly with article 5(4) [103]. It is impossible to define exhaustively the circumstances in which an oral hearing will be necessary, but these will often include: (a) where important facts are in dispute, or where a significant explanation or mitigation is advanced which needs to be heard orally in order fairly to determine its credibility [73 78; 85]; (b) where the board cannot otherwise properly or fairly make an independent assessment of risk, or of how it should be managed and addressed [79; 81; 86]; (c) where it is tenably maintained that a face to face encounter, or questioning of those who have dealt with the prisoner, is necessary to enable his case to be put effectively or to test the views of those who have dealt with him [82]; and (d) where, in the light of the prisoners representations, it would be unfair for a paper decision taken by a single member panel to become final without an oral hearing [96]. The purpose of the oral hearing is not only to assist in the boards decision making, but also to reflect the prisoners legitimate interest in being able to participate in a procedure with important implications for him, where he has something useful to contribute [82]. The likelihood of release or transfer is separate from the question of whether fairness requires an oral hearing [88 89]. When dealing with recalled prisoners cases, the board should bear in mind that they have been deprived of their freedom [83]. For indeterminate sentence prisoners, increased scrutiny should be afforded by the board in assessing whether the risk they present is unacceptable the longer they have spent in prison post tariff [83]. The board must be, and appear to be, independent and impartial [90 91] and guard against any temptation to refuse an oral hearing to save time, trouble and expense [91]. Lord Reed stresses that paper decisions are provisional; the right to request an oral hearing is not an appeal, and the prisoner need only persuade the board that an oral hearing is appropriate [94 95]. The common law duty to act fairly is influenced by the requirements of article 5(4); compliance with the former should ensure compliance with the latter [101 113]. Breach of article 5(4) will not normally result in an award of damages under the Human Rights Act unless the breach has resulted in the prisoner suffering a deprivation of liberty [114 115]. An oral hearing ought to have been offered to the appellants. Osborn and Reilly had advanced various explanations and mitigations [98] and their requests for an oral hearing were mistakenly characterised as appeals [99 100]. In Booths case, input from his psychiatrist at an oral hearing would have been helpful and it was relevant that he had spent so long in custody post tariff [99]. Reillys claim for damages failed it had not been argued that he had suffered any deprivation of liberty as a result of the article 5(4) breach [115]. |
This is an appeal from the Court of Appeal of Northern Ireland. The issue is whether a pupil was unlawfully suspended from his school in County Antrim. His school fell within the area of the North Eastern Education and Library Board. The Board had prepared a Scheme governing the suspension and expulsion of pupils. It had done so pursuant to the requirement of the Education and Libraries (NI) Order 1986. The appellant was suspended following a complaint by a girl pupil at the school of misconduct in relation to her which she insisted that the principal of the school should keep confidential. The principal suspended the appellant to protect this pupil pending a risk assessment, stating that he did so as a precautionary measure. Although he purported to suspend the pupil pursuant to the Scheme, he failed to comply with its requirements. The appellant brought proceedings for judicial review, contending that his suspension was unlawful and denied him the right to education guaranteed by the European Convention on Human Rights, contrary to the Human Rights Act 1998. The Court of Appeal held that the principal had lawfully exercised a common law power to suspend the appellant that existed, as part of his managerial powers, in parallel with the power conferred under the Scheme. The Supreme Court reversed this finding to the extent of holding that the principal had had no such power. Sir John Dyson, Lord Phillips and Lady Hale held that the suspension was disciplinary, or at least had been imposed in a disciplinary context, and that no common law power to suspend subsisted in these circumstances. Lord Rodger and Lord Brown held that the suspension was a precautionary measure rather than a disciplinary sanction, but that there was no common law power to suspend outside the Scheme. It followed that the suspension was unlawful. The Court was unanimous in holding that the suspension did not amount to a denial of the right to education guaranteed by the Convention. |
11 13 Randolph Crescent is a block of nine flats in Maida Vale, London. Two of the leases are held by the respondent, Dr Julia Duval, and a third lease is held by Mrs Martha Winfield. The term of each lease is 125 years from 24 June 1981. The appellant landlord owns the freehold of the building and is also the management company. All of the shares in the landlord company are owned by the leaseholders of the flats. The leases are, in all relevant respects, in substantially the same form. Each of them contains a covenant, clause 2.6, which prevents the lessee from making any alteration or improvement in, or addition to, the premises demised by the lease without the prior written consent of the landlord. By the operation of a statutory provision, that consent cannot be unreasonably withheld. Each lease also contains an absolute covenant, clause 2.7, which prevents the lessee from cutting into any roofs, walls, ceilings or service media. In addition, clause 3.19 of each lease requires the landlord to enforce, at the request and cost of any lessee, certain covenants in the leases held by the other lessees, including any covenant of a similar nature to clause 2.7. In 2015, Mrs Winfield sought a licence from the landlord to carry out works to her flat. The proposed works involved removing a substantial part of a load bearing wall at basement level. The licence was refused after the proposal came to the attention of Dr Duval and her husband. However, following presentations by engineers and architects acting for Mrs Winfield, the landlord decided it was minded to grant a licence, subject to Mrs Winfield securing adequate insurance. Dr Duval then issued proceedings against the landlord, seeking a declaration that the landlord did not possess the power to permit Mrs Winfield to act in breach of clause 2.7 of her lease. Deputy District Judge Chambers held that, on the proper interpretation of clause 3.19, the landlord had no power to waive any of the covenants in clause 2 without the prior consent of all of the lessees of the flats in the building. An appeal by the landlord was allowed by the Central London County Court. Dr Duval then appealed, successfully, to the Court of Appeal. The landlord now appeals to the Supreme Court. The Supreme Court unanimously dismisses the appeal. Lord Kitchin gives the sole judgment, with which Lady Hale, Lord Carnwath, Lady Black and Lord Sales agree. The starting point is to construe the terms of the leases in context [25]. There are certain aspects of the background which are highly relevant. First, each lease is a long term contract and was acquired for a substantial premium [27]. Secondly and importantly, the parties would have appreciated that over the lifetime of the lease it would inevitably be necessary for works to be carried out to each flat [28]. Thirdly, the parties would have understood that routine improvements and modifications would be unlikely to impinge on the other lessees, or affect adversely the wider structure or fabric of the building, and that it would be entirely sensible for the landlord to be in a position to permit such works from time to time [29]. Fourthly, the parties must have appreciated the desirability of the landlord retaining not just the reversionary interest in the flats but also the rights in possession of the common parts of the building. Similarly, the parties must have appreciated the important and active role the landlord would play in managing the building and fulfilling its obligations under each lease [30]. Clauses 2.6 and 2.7 are directed at different kinds of activity. Clause 2.6 is concerned with routine improvements and alterations by a lessee to his or her flat, these being activities that all lessees would expect to be able to carry out, subject to the approval of the landlord. By contrast, clause 2.7 is directed at activities in the nature of waste, spoil or destruction which go beyond routine alterations and improvements and are intrinsically such that they may be damaging to or destructive of the building. This concept of waste, spoil or destruction should also be treated as qualifying the covenants not to cut, maim or injure referred to in the rest of the clause. In the context of this clause these words do not extend to cutting which is not itself destructive and is no more than incidental to works of normal alteration or improvement, such as are contemplated under clause 2.6. This interpretation is supported by F W Woolworth and Co Ltd v Lambert [1937] 1 Ch 37 [32]. It must also be remembered that the landlord is subject to other restrictions on its ability to license alterations to a lessees flat. First, each lessee enjoys the benefit of a covenant for quiet enjoyment [33]. Secondly, the landlord must not derogate from its grant [34]. Thirdly, each of the lessees is entitled to be protected against nuisance [35]. Finally, the landlord has covenanted with the lessee in the terms of clause 3 of the lease, which includes, for example, a covenant to maintain the structure of the building [36]. The critical question is whether the landlord can license structural work which falls within the scope of clause 2.7 and which would otherwise be a breach of that clause. Clause 3.19 does not say expressly that the landlord cannot give a lessee permission to carry out such work, so it must be considered whether this is nevertheless implicit in clause 3.19 [43]. It is well established that a party who undertakes a contingent or conditional obligation may, depending upon the circumstances, be under a further obligation not to prevent the contingency from occurring or from putting it out of his power to discharge the obligation if and when the contingency arises [44]. The principle is well illustrated by cases involving breaches of contracts to marry, and implied terms can arise from it [45 50]. There is an implied term in Dr Duvals lease: a promise by the landlord not to put it out of its power to enforce clause 2.7 in the leases of other lessees by licensing what would otherwise be a breach of it [52]. That necessarily follows from a consideration of the purpose of the covenants in clauses 2 and 3.19 and the content of the obligations in clause 3.19. Clause 2.7 is an absolute covenant and, under clause 3.19, the complainant lessee is entitled, on provision of security, to require the landlord to enforce it as an absolute covenant. It would not give practical content to the obligation if the landlord had the right to vary or modify the absolute covenant or to authorise what would otherwise be a breach of it [53 55]. Further, it would be uncommercial and incoherent to say that clause 3.19 can be deprived of practical effect if the landlord manages to give a lessee consent to carry out work in breach of clause 2.7 before another lessee makes an enforcement request and provides the necessary security. The parties cannot have intended that a valuable right in the objecting lessees lease could be defeated depending upon who manages to act first, the landlord or that lessee [57]. Clause 2.7 is directed at works which go beyond routine alterations and improvements and are intrinsically such that they may be damaging to or destructive of the building. It is entirely appropriate that works of the kind Mrs Winfield wished to carry out should require the consent of the other lessees, including Dr Duval [59]. |
The issue in this case is what is meant by the word violence in section 177(1) of the Housing Act 1996. Is it limited to physical contact or does it include other forms of violent conduct? Under section 193 of the 1996 Act, where a local housing authority are satisfied that an applicant is homeless and did not become homeless intentionally, they must make accommodation available for the applicant, unless they refer the application to another local housing authority. Section 175(1) provides that a person is homeless if he has no accommodation available for his occupation. Section 175(3) provides that a person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy. Section 177(2) states that in determining whether it is reasonable for a person to continue to occupy accommodation, regard may be had to the general circumstances prevailing in relation to housing in the local housing authority district. Section 177(1) states that it is not reasonable for a person to continue to occupy accommodation if it is probable that this will lead to domestic violence or other violence against him or other members of his household. The effect of section 177(1), which has been called a pass porting provision, is that a person who is at risk of the violence to which it applies is automatically homeless, however reasonable it might in other respects be for her to remain in the accommodation. Questions of local housing conditions or shortages do not come into it. Another important consequence of section 177(1) is that the person cannot be treated as intentionally homeless. Section 198 provides that one of the conditions for referral to another local housing authority is that neither the applicant nor other members of his household will run the risk of domestic violence in the other district. In the case of Danesh v Kensington and Chelsea Royal London Borough Council [2006] EWCA Civ 1404, [2007] 1 WLR 69, the Court of Appeal held that violence in the context of section 198 involved some sort of physical contact, and the word violence on its own did not include threats of violence or acts or gestures, which lead someone to fear physical violence. In August 2008, the Appellant left the matrimonial home in which she lived with her husband, taking her two young children with her, and sought the help of the local housing authority. In interviews with housing officers, she complained of her husbands behaviour, which included shouting in front of the children, and stated that she was scared that if she confronted him he might hit her. The officers decided that she was not homeless as her husband had never actually hit her or threatened to do so. On a review, the panel noted that the root cause of her homelessness was not that she had fled after a domestic incident. The panel believed the probability of domestic violence to be low. They concluded that it was reasonable for her to continue to occupy the matrimonial home. The Respondent local authority accepted that the housing officers and review panel had applied the Danesh meaning when deciding that the appellant was not homeless within the meaning of the 1996 Act. The Supreme Court unanimously allows the appeal and sends the case back to be decided again by the local housing authority. Lady Hale gives the leading judgment. The Court holds that domestic violence in section 177(1) of the 1996 Act includes physical violence, threatening or intimidating behaviour and any other form of abuse which, directly or indirectly, may give rise to the risk of harm. Physical violence is not the only natural meaning of the word violence. Another natural meaning is strength or intensity of emotion; fervour, passion. [19] By the time of the 1996 Act, both international and national governmental understanding of the term domestic violence had developed beyond physical contact. There is certainly no doubt that the understanding of domestic violence has moved on now, as demonstrated by the definitions used in a 2005 Home Office publication Domestic Violence: A National Report and in the 2006 Homelessness Code of Guidance for Local Authorities. [20] [24] Violence is not a term of article It is capable of bearing several meanings and applying to many different types of behaviour. These can change and develop over time. The essential question is whether an updated meaning is consistent with the statutory purpose. The purpose is to ensure that a person is not obliged to remain living in a home where she, her children or other members of her household are at risk of harm. A further purpose is that the victim of domestic violence has a real choice between remaining in her home and seeking protection from the criminal or civil law and leaving to begin a new life elsewhere. [27] The purpose of the legislation would be achieved if the term domestic violence were interpreted in the same sense in which it is used by the President of the Family Division, in his Practice Direction (Residence and Contact Orders: Domestic Violence) (No 2) [2009] 1 WLR 251, para 2, suitably adapted to the forward looking context of sections 177(1) and 198(2) of the Housing Act 1996: Domestic violence includes physical violence, threatening or intimidating behaviour and any other form of abuse which, directly or indirectly, may give rise to the risk of harm. [28] Lord Rodger could see no reason why Parliament would have intended the position to be any different where someone will be subjected to deliberate conduct, or threats of deliberate conduct, that may cause her psychological, as opposed to physical, harm. To conclude otherwise would be to play down the serious nature of psychological harm. [46] Lord Brown indicated his very real doubts that Parliament intended domestic violence to extend beyond the limits of physical violence but did not feel sufficiently strongly as to the proper outcome of the appeal to carry these doubts to the point of dissent. [48], [60]. |
Mrs Maryam Rajavi is a dissident Iranian politician, resident in Paris. She has close links with Iranian opposition organisations, including Mujahedin e Khalq, which was formerly a proscribed terrorist organisation but is now non violent. In 1997, the Home Secretary excluded Mrs Rajavi from the UK on the ground that her presence would not be conducive to the public good for reasons of foreign policy and in light of the need to take a firm stance against terrorism. That exclusion remains in force. In December 2010, Lord Carlile of Berriew, together with two other members of the House of Lords, asked the Home Secretary for a meeting to discuss lifting the exclusion to enable Mrs Rajavi to address meetings in the Palace of Westminster. The Home Secretary sought the advice of the Foreign Office. She replied in February 2011 stating that she had concluded that Mrs Rajavis admission to the UK would not be conducive to the public good. A further letter of May 2011, written in response to a letter before action from Lord Carlile and other members of the House of Lords, claimed that Articles 9 and 10 of the European Convention on Human Rights were not engaged but that the decision was in any event justified and proportionate. Lord Carlile and other members of the House of Lords launched judicial review proceedings in May 2011, arguing that the decision contravened their freedom of belief and expression rights under Articles 9 and 10. Mrs Rajavi herself later joined as a claimant. The Home Secretary issued second and third decisions in October 2011 and January 2012, supported by evidence from a Foreign Office official, stating that lifting the exclusion would cause significant damage to the UKs interests in relation to Iran and place British people and property in Iran and the region at risk. It is now common ground that Article 10 is engaged in relation to both Mrs Rajavi and the members of the House of Lords. But was the Home Secretarys decision justified and proportionate? Both the judge and the Court of Appeal held that it was. The claimants appealed to the Supreme Court. The Supreme Court dismisses the appeal by a majority of 4 1 (Lord Kerr dissenting). Lord Sumption delivers the leading judgment. The other three majority judgments give similar reasons, but with differences of nuance. Threshold argument The claimants argued that the Home Secretarys reasons were legally irrelevant, because they depended on the potential reaction of a foreign state which did not share the values embodied in the Convention. The Supreme Court unanimously rejects this argument. Irans reaction is plainly factually relevant to the decision, and the correct emphasis is on the democratic values to be protected, not the circumstances prompting the need for protection [14 18, 63, 144 146]. Was the Home Secretarys decision justified and proportionate? A predictive judgment of the executive about the likely reaction of a foreign country to a decision of the United Kingdom government is ordinarily entitled to a large measure of respect from the courts both (i) because the constitutional separation of powers assigns such judgments to the executive, and (ii) because the executive has greater institutional competence in this area by virtue of its greater specialised experience and the wider range of advice available to it. Where qualified rights under the Human Rights Convention are engaged, such as the Article 10 rights at issue in this case, the court must decide for itself whether they have been interfered with and if so whether the interference is justifiable. In this case, per Lord Sumption, the executives decision is rational, there are no grounds to challenge the good faith or the evidential base of the decision, and the Secretary of State had committed no error of principle, nor had she underrated the value of Article 10 rights or overstated the risk [19 47, 51]; per Lord Neuberger, the Home Secretarys decision was proportionate and the Article 10 rights did not outweigh the risks she had identified [70 74]; per Lady Hale, on the basis of evidence now some years old, it had not been shown that the article 10 right claimed was sufficiently important to put at risk the UKs fragile but imperative relationship with Iran [98 109]; and per Lord Clarke, there was no evidence before the court permitting it to doubt the strength of the Home Secretarys reasons [111 117]. Accordingly, although the Court of Appeal was wrong to approach the issue on the usual domestic judicial review grounds, the appeal should be dismissed. Lord Kerr would have allowed the appeal. The courts will accord respect to the executives assessment of the risks and consequences of Mrs Rajavis being admitted to the UK, though it is not required to frank that decision. However, it is for the court to assess the importance of the right infringed. The court is both competent and constitutionally required to make such an assessment and it would be an error to attach special weight to the Home Secretarys view on this point [150 162]. In this case, only the most compelling and pressing circumstances would justify a restriction on the right. The Home Secretary identifies solid countervailing factors, but the court should take into account the fact that these matters are unpredictable and that any retaliation would be perverse and rooted in anti democratic beliefs. The risks cannot be precisely identified but the interference with the Article 10 right is direct and immediate [163 180]. |
These appeals concern the obligations of insurance companies under various contracts of employers liability (EL) insurance. In particular, the appeals concern the scope of the insurers obligations to indemnify employers against their liabilities towards employees who have contracted mesothelioma following exposure to asbestos. Mesothelioma has an unusually long gestation period, which can be in excess of 40 years between exposure to asbestos and manifestation of the disease. The insurers maintain that the EL policies only cover mesothelioma which manifested as a disease at some point during the relevant policy period. In contrast, the employers submit that the insurance policies respond to mesothelioma caused by exposure to asbestos during the relevant policy period but which develops and manifests itself sometime later. The usual rule in negligence cases is that the claimant must establish on the balance of probabilities that the defendants negligence caused his injury or disease. In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 and Barker v Corus UK Ltd [2006] UKHL 20 the House of Lords developed an exception to this general principle in cases involving mesothelioma caused by exposure to asbestos. The effect of this special rule is that an employer is liable where exposure to asbestos contributed to the risk that the employee would suffer mesothelioma and where the employee in fact develops the disease. The insurers submit that the special rule in Fairchild/Barker is not applicable when deciding, for the purposes of an EL insurance policy, whether an employees mesothelioma was caused by exposure to asbestos during a particular policy year. At first instance Burton J held that the policies should all be interpreted as having a causation wording. He therefore held that the liability trigger under the EL policy was when the employee inhaled the asbestos and not the date when the malignant lesion developed. A majority of the Court of Appeal (Rix and Stanley Burnton LJJ) upheld the judge in relation to some of the EL insurance policies (particularly those covering disease contracted during the relevant insurance period); however they concluded that other policies (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. These appeals to the Supreme Court raise two issues: (i) On the correct construction of the EL policies, is mesothelioma sustained or contracted at the moment when the employee is wrongfully exposed to asbestos or at the moment when the disease subsequently manifests in the employees body? (ii) Does the special rule in Fairchild/Barker apply when determining whether, for the purposes of the EL policies, an employee sustained or contracted mesothelioma during a particular policy period? The Supreme Court dismisses the insurers appeal by a 4 1 majority; Lord Phillips dissenting on the second issue. Lord Mance gives the main judgment. To resolve the meaning of the EL policies it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more generally [19]. Several features point the way to the correct construction. First, the wordings of the policies on their face require the course of employment to be contemporaneous with the sustaining of the injury [20]. Second, the wordings demonstrate a close link between the actual employment undertaken during each period and the premium agreed by the parties for the risks undertaken by the insurers in respect of that period. Third, on the insurers case there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to disease or injury in another later period [24]. Fourth, on the insurers case employers would be vulnerable to any decision by the insurers not to renew the policy. A decision not to renew might arise from the employers complying with their duty to disclose past negligence upon any renewal. Employers who discovered that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease would have such a duty. The insurers could then simply refuse any renewal or further cover [25]. Fifth, the way most of the policies deal with extra territorial issues throws doubt on any suggestion that the wordings are so carefully chosen that a court should stick literally to whatever might be perceived as their natural meaning [28]. Section 1 of the Employers Liability Compulsory Insurance Act 1969 also points the way to the correct interpretation. This states that every employer shall insure, and maintain insuranceagainst liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment. In order to give proper effect to the protective purpose of that legislation, the Act requires insurance on a causation basis [47]. There is no difficulty in treating the word contracted as looking to the causation of a disease, rather than its development or manifestation. The word contracted used in conjunction with disease looks to the initiating or causative factor of the disease [49]. While the word sustained may initially appear to refer to the manifestation of an injury, the nature and underlying purpose of the EL insurances is one which looks to the initiation or causation of the accident or disease which injured the employee. Accordingly a disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself later [50]. In relation to the second issue, the question is whether the EL policies cover employers liability for mesothelioma arising under the special rule in Fairchild/Barker [71]. Under that rule the law accepts a weak or broad causal link between the employers negligence and the employees mesothelioma. When construing the EL policies the concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the Fairchild/Barker rule [74]. The purpose of the EL policies was to insure the employers against liability to their employees. Once it is held that the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies [88]. Accordingly, for the purposes of the EL policies, the negligent exposure of an employee to asbestos during the policy period has a sufficient causal link with subsequently arising mesothelioma to trigger the insurers obligation to indemnify the employer [74]. Lord Phillips dissents on the second issue. The special approach developed in Fairchild/Barker raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. This conclusion is not affected by section 3 of the Compensation Act 2009, which did not alter the jurisprudential basis of the Fairchild/Barker approach [132] [133]. |
The principal issue in this appeal concerns the role, if any, of the courts of England and Wales (including the Supreme Court of the United Kingdom) in the legislative process of the island of Sark, part of the Crown Dependency of the Bailiwick of Guernsey. The Channel Islands are not part of the United Kingdom but as Crown Dependencies enjoy a unique relationship with the United Kingdom through the Crown, in the person of the Sovereign. The UK government is responsible for their international relations and for their defence. The UK Parliament has power to legislate for the Islands but Acts of Parliament do not extend to the Islands automatically. Usually, the Act gives power to extend the application of the Act to the Islands by Order in Council, which will be preceded by consultation. For the most part the Islands legislate for themselves. The States of Guernsey have power to legislate for the whole Bailiwick, including the islands of Alderney and Sark, and the Human Rights (Bailiwick of Guernsey) Law 2000 applies throughout the Bailiwick. Sark has its own legislature (the Chief Pleas), which generally legislates by passing a Projet de Loi. This then requires Royal Assent, which is given by Order in Council on the recommendation of a Standing Committee of the Privy Council dealing with the affairs of Jersey and Guernsey. Reform to the constitution of Sark had been made by the Reform (Sark) Law 2008 (the 2008 Reform Law). The 2008 Reform Law was successfully challenged by the respondents, Sir David and Sir Frederick Barclay, on the ground that the dual role of the office of Seneschal, as President of the Chief Pleas and chief judge, was incompatible with article 6 of the European Convention on Human Rights (ECHR), in R (Barclay) v Lord Chancellor and Secretary of State for Justice [2010] 1 AC 464 (Barclay (No 1)). The Reform (Sark) (Amendment) (No 2) Law (the 2010 Reform Law) was enacted in response, removing the right of the Seneschal to serve as President or member of the Chief Pleas and making provisions for his office as chief judge. The respondents considered that these provisions were incompatible with the impartiality and independence of the judiciary, required by article 6 ECHR. The respondents applied to the Administrative Court of England and Wales for an order declaring that the Order in Council made on 12 October 2011, by which Royal Assent was given to the 2010 Reform Law, was unlawful because the 2010 Reform Law was incompatible with the ECHR. The Administrative Court granted the declaration. The appellants appealed to the Supreme Court on the ground that the Administrative Court had no jurisdiction to do so or, if it had, that the jurisdiction should not have been exercised. The Supreme Court unanimously allows the appeal and sets aside the declaration made by the Administrative Court. It holds that the courts of the United Kingdom do have jurisdiction judicially to review an Order in Council which is made on the advice of the Government of the United Kingdom acting in whole or in part in the interests of the United Kingdom. However, although the Administrative Court did therefore have jurisdiction to entertain the respondents claim, it should not have exercised it in this case. Lady Hale gives the substantive judgment, with which the other Justices all agree. It is not possible to state a general rule as to whether or not an Order made by Her Majesty in Council is amenable to judicial review in the courts of England and Wales, given the wide variety of circumstances in which such orders are made [28]. The Human Rights Act 1998 (the HRA) does not apply to Channel Islands legislation as it applies in the Channel Islands, and does not include an Order in Council made in exercise of the royal prerogative in the definition of primary legislation subject to the HRA. Otherwise the method by which the ECHR had been extended to the Channel Islands would be subverted. A challenge to Sark legislation on the ground of incompatibility with the ECHR should be brought in the Island courts under the Human Rights (Bailiwick of Guernsey) Law 2000, from which an appeal will ultimately lie to the Judicial Committee of the Privy Council. The courts of the Bailiwick are better placed to assess whether legislation strikes a fair balance between the protection of individual rights and the general interests of the community and the appropriate forum for this claim. The courts of England and Wales should not have entertained the challenge in Barclay (No 1) and will not do so in this case [27 39]. The appellants had gone further and argued that the courts of England and Wales have no jurisdiction judicially to review the process whereby the Privy Council gives Royal Assent to Island legislation. The fact that, unlike former colonies without legislatures in respect of which Orders in Council are made, Sark has a functioning legislature and its own system of laws and courts, is a very powerful reason why the courts of England and Wales should not interfere with the business of the people of Sark. It does not follow, however, that there is no jurisdiction to entertain a challenge in a more appropriate case [47]. It is the clear responsibility of the UK government in international law to ensure that the Islands comply with such international obligations as apply to them [48]. It is to be expected that any dispute will be decided by negotiation with the Island authorities but, if this proves impossible, a challenge could be made in the courts of England and Wales. The reality is that the appellants advise Her Majesty both in right of the Bailiwick of Guernsey and of Sark and in right of the UK, because of the UKs continuing responsibility for the international relations of the Bailiwick. They are legally accountable to the UK Parliament, and to the UK courts in an appropriate case, which this is not. The question of whether they might also be accountable to the courts of the Bailiwick is left open as it had not been argued [57]. |
Until 1 April 2013 central government operated a Council Tax Benefit (CTB) scheme whereby residents in local authority areas in England were granted relief from paying council tax on a means tested basis, for which the local authorities were reimbursed in full [4]. For the year 2013 2014, reimbursement to each local authority was fixed at 90% of the sum it had received in the previous year [6] and each local authority was required to devise its own Council Tax Reduction Scheme (CTRS) to provide relief from council tax to those whom it considered to be in financial need [7]. It was a requirement that each local authority consult interested persons on its CTRS in draft form before deciding on a final scheme: Paragraph 3(1)(c) of Schedule 1A of the Local Government Finance Act 1992 (added by Paragraph 1 of Schedule 4(1) to the Local Government Finance Act 2012) provides that Before making a scheme, the authority must consult such other persons as it considers are likely to have an interest in the operation of the scheme. The Respondent published a draft CTRS on 29 August 2012 under which it was proposed that the shortfall in central government funding would be met by a reduction in council tax relief of between 18% and 22% for all CTB claimants in Haringey other than pensioners [9 10]. The consultation document for Haringey residents explained the reduction in funding, and stated That means that the introduction of a local [CTRS] in Haringey will directly affect the assistance provided to everyone below pensionable age that currently receives [CTB]. There was no reference to other options for meeting the shortfall, for example by raising council tax, reducing funding to council services or deploying capital reserves [19]. The consultation document also included a questionnaire asking how the reduction in relief should be distributed as among CTB claimants [21]. Following the consultation exercise, the Respondent on 17 January 2013 decided to adopt a CTRS under which the level of council tax relief was reduced by 19.8% from 2012 2013 levels for all claimants other than pensioners and the disabled [14]. The Appellant is a resident of Haringey who until 1 April 2013 had been in receipt of full CTB, and thereafter had to pay 19.8% of full council tax. She was not originally a claimant in the judicial review proceedings which were brought by two other similarly circumstanced Haringey residents to challenge the Respondents consultation process. Underhill J dismissed their application for judicial review on 7 February 2013. One claimant, Ms Stirling, appealed to the Court of Appeal and that appeal was dismissed on 22 February 2013. Ms Stirling subsequently became ill and the Appellant was by consent substituted for the purposes of this appeal. Ms Stirling has since sadly died [3]. The Supreme Court unanimously allows the appeal and declares that the consultation exercise was unlawful [31]. However, it declines to order the Respondent to undertake a fresh consultation exercise because this would be disproportionate in the circumstances [33]. Lord Wilson (with whom Lord Kerr agrees) gives the main judgment. Lord Reed gives a concurring judgment. Lady Hale and Lord Clarke agree with both judgments. Lord Wilson considers that where a public authority has a duty to consult before taking a decision, whether such duty is generated by statute, as in this case, or arises as a matter of common law, the same common law requirements of procedural fairness will inform the manner in which the consultation should be conducted [23]. The requirements of a fair consultation are as summarised in the case of R v Brent London Borough Council, ex p Gunning, (1985) 84 LGR 168: First, that consultation must be at a time when proposals are still at a formative stage. Second, that the proposer must give sufficient reasons for any proposal to permit of intelligent consideration and response. Third, that adequate time must be given for consideration and response and, finally, fourth, that the product of consultation must be conscientiously taken into account in finalising any statutory proposals. [25]. Fairness may require that interested persons be consulted not only upon the preferred option but also upon discarded options [27]. In this case, fairness demanded that the consultation document should briefly refer to alternative methods of absorbing the shortfall in government funding and to the reasons why the Respondent had concluded that they were unacceptable [29]. In fact, the purported consultation was premised on the assumption that the shortfall would be met by a reduction in council tax relief and no other option was presented [17, 18, 21]. Neither was it reasonably obvious to those consulted what other options there may have been and the reasons why such options had been discarded. Indeed, only an infinitesimal number of responses to the consultation (approximately 20 out of 1287 responses) alluded to other ways of meeting the shortfall. Therefore, the consultation exercise was unfair and unlawful [31]. However, it was not unlawful that the Respondent had failed to consult on the possible adoption of a Transitional Grant Scheme announced by central government only 5 weeks before the completion of the draft CTRS consultation [32]. Lord Reed allows the appeal for slightly different reasons. In cases such as this where the duty to consult is imposed by statute, the scope of the duty varies according to the statutory context [36]. The purpose of this particular statutory duty was to ensure public participation in the local authoritys decision making process [38]; it was not to ensure procedural fairness as under the common law. Meaningful participation in these circumstances required that those consulted be provided with an outline of the realistic alternatives [39]. In the absence of specific statutory provision, reference to alternative options will be required where this is necessary in order for the consultees to express meaningful views on the proposals [40]. Lady Hale and Lord Clarke give a brief joint judgment agreeing with both Lord Wilson and Lord Reeds judgments [44]. |
The appellant (O) is a Nigerian woman aged 38. After arriving in the UK illegally in 2003, her claim for asylum or discretionary leave to remain in the UK was refused and her appeal was dismissed. She was charged with an offence of child cruelty, but absconded on bail. In 2007 she was arrested and charged with another offence, for which she was later convicted and imprisoned. She later pleaded guilty to the outstanding child cruelty charge, and was sentenced to 12 months imprisonment and made the subject of a recommendation for deportation. Upon her release from prison in August 2008, the respondent (the SSHD) detained O, first under para 2(1) of Schedule 3 to the Immigration Act 1971 (the 1971 Act) pending the making of a deportation order and then, once the deportation order was made, under para 2(3) of Schedule 3 to the 1971 Act pending deportation. O was detained at Yarls Wood Immigration Removal Centre until 6 July 2011, when she was released on bail. O has suffered from serious mental ill health, including episodes of self harm, and has been the subject of several medical reports. In 2008 she was diagnosed with a recurrent depressive disorder and an emotionally unstable personality disorder. In 2009 a consultant psychiatrist instructed by O recommended that she be transferred from Yarls Wood to hospital. Following a suicide attempt in March 2010, O was admitted to hospital but was subsequently discharged, the hospitals consultant psychiatrist concluding that her needs would be met adequately at Yarls Wood. In February 2011 a report on O was prepared by another clinical psychologist instructed by O (the Report). The Report concluded in particular that: O suffered from not only a depressive disorder but a severe form of post traumatic stress disorder; O could not access the necessary mental health services at Yarls Wood and that release from detention would greatly benefit her mental health; O needed a long term structured package of mental health services; O needed to be referred to a specialist trauma focussed clinic for phased treatment; and that such a referral was in accordance with the National Institute for Health and Care Excellence (NICE) guidelines. In the present proceedings, O challenges the lawfulness of the period of her detention from 22 July 2010 (and in particular from 4 March 2011, the date of the first review of Os detention following the SSHDs receipt of the Report) until 6 July 2011 (the date of her release on bail). The object of these proceedings is to secure a declaration that Os detention during this period was unlawful and an award of damages. In April 2012 Lang J refused permission for the claim to proceed and in July 2014 the Court of Appeal dismissed Os appeal. O now appeals to the Supreme Court. The Supreme Court unanimously dismisses Os appeal. Lord Wilson gives the leading judgment, with which the other Justices agree. This appeal requires the Court to consider the SSHDs policy relating to the detention of mentally ill persons pending deportation (the Policy) and the effect of any failure by the SSHD to apply that Policy, in the light of the Court of Appeals decision in R (Francis) [4]. The Policy obliges the SSHD to conduct monthly reviews of detention pending deportation [18]. Para 55.10 provides that those suffering from serious mental illness which cannot be satisfactorily managed within detention will normally be considered suitable for detention only in very exceptional circumstances, including for example where there is a risk of further offending or harm to the public [19]. In Os detention reviews between 4 March and 4 July 2011, only the briefest reference was made to the Report, and Os most recent diagnosis was incorrectly identified as being in March 2010 [24]. Although the Report was submitted to the SSHD expressly in support of Os application to challenge her deportation [22 23], on any view it bore some relevance to the Policy and should have been addressed properly in the detention reviews [25]. Therefore, as the Court of Appeal concluded (and the SSHD now accepts), the SSHD unlawfully failed to apply her Policy when deciding to continue to detain O between March and July 2011 [26 27]. The refusal to release O during this period was procedurally flawed [37]. Given that conclusion, this case does not afford the opportunity to consider the nature of the courts review of the legality of the SSHDs application of her Policy [28, 37]. The question is then how the SSHD would have reacted to the Report, had she applied her Policy correctly. It is for the Court to determine the meaning of the Policy for itself [28]. Satisfactory is a word which catches the various different factors to which the SSHD may be required to have regard. The discussion of satisfactory management in R (Das) is approved, save that treatment (available to a detainee only if released) which would be likely to effect a positive improvement in his or her condition might be relevant; the burden would be on the SSHD to inquire as to its availability. While satisfactory does not mean optimal management, a narrow construction of management, meaning no more than control of the illness would lack principled foundation [30]. The Policy mandates a practical inquiry by the SSHD, in the light of the context of immigration detention [31]. The SSHD should have made inquiries and obtained answers to a number of questions as to whether, in the light of the Report, Os illness could satisfactorily be managed at Yarls Wood [32 33]. The Court cannot predict the result of those inquiries, most of which seem never to have been made. The SSHD would also have had to consider whether there were very exceptional circumstances which nonetheless justified Os detention. Even on the assumption that the proper application of the Policy should in due course have led the SSHD to direct Os release, it is unrealistic to consider that the conditions necessary for her release would have been in place prior to 6 July 2011, when she was released on bail [34 35]. Were Os claim for judicial review permitted to proceed, it would result in no more than a declaration that her detention was unlawful and an award of only nominal damages [38 40]. The lower courts were entitled to refuse Os application for permission [50]. R (Francis) R (Francis) was wrongly decided. The power to detain conferred by para 2(1) of Schedule 3 to the 1971 Act (pending the making of a deportation order) and by the words in parenthesis in para 2(3) (pending deportation) is a mandate subject to two conditions: first, there must be a prospect of deportation within a reasonable time; and second, the SSHD must consider in accordance with the Policy whether to exercise the power to detain. If either condition is not satisfied, the mandate to detain ceases and detention becomes unlawful [42 49]. |
Under sections 793 797 of the Companies Act 2006 (the Act), a company can issue a statutory disclosure notice calling for information about persons interested in its shares. The court can restrict the exercise of rights attaching to shares in the event of non compliance. JKX Oil & Gas plc, like many companies, has a provision in its company articles (article 42) empowering the board to impose such restrictions where a statutory disclosure notice has not been complied with. Article 42 provides that the board is entitled to treat a response to a disclosure notice as non compliant where it knows or has reasonable cause to believe that the information provided is false or materially incorrect. In 2013, the directors of JKX perceived that it had become the target of a so called corporate raid by two minority shareholders, Eclairs (controlled by trusts associated with Igor Kolomoisky and by Gennadiy Bogolyubov) and Glengary (controlled by Alexander Zhukov and Mr Ratskevyich). JKX issued disclosure notices between 20 26 March and on 13 May, requesting information from Eclairs, Glengary and Messrs. Kolomoisky, Bogolyubov, Zhukov, and Ratskevyich about the number of shares held, their beneficial ownership, and any agreements or arrangements between the persons interested in them. The responses admitted the existence of interests in the shares but denied that there was any agreement or arrangement. On 23 May, Eclairs publicly invited shareholders to oppose the resolutions proposed at the forthcoming AGM on 5 June, including resolutions for the re election of certain directors. At a meeting on 30 May, the JKX board considered that there were agreements or arrangements between the addressees of the disclosure notices which had not been disclosed in the responses. It resolved to exercise the powers under article 42 to issue restriction notices in relation to the shares held by Eclairs and Glengary, suspending their right to vote at general meetings and restricting the right of transfer. Eclairs and Glengary challenged the restriction notices, relying on the proper purpose rule at s171(b) of the Act (a director must only exercise powers for the purposes for which they are conferred). Mann J held that the boards decision was invalid. The article 42 power could be exercised only to provide an incentive to remedy the default or a sanction for failing to do so. The board had reasonable cause to believe that there was an agreement or arrangement between the addressees. But the boards purpose was to influence the fate of the resolutions at the AGM. The Court of Appeal allowed the appeal by a majority, holding that the proper purpose rule did not apply to article 42 because the shareholders only had to answer the questions more fully in order to avoid the imposition of restrictions on the exercise of their rights, and because the application of the rule was inappropriate in the course of a battle for control. The Supreme Court allows the appeals by Eclairs and Glengary, holding that the proper purpose rule applies to the exercise of the power under article 42, and that the directors of JKX acted for an improper purpose. The judgment is given by Lord Sumption, with whom Lord Hodge agrees. Lord Mance (with whom Lord Neuberger agrees) agrees that the appeals should be allowed, but prefers to express no view on aspects of the reasoning. Lord Clarke agrees, but prefers to defer a final conclusion on those aspects until they arise for decision and have been the subject of full argument. The proper purpose rule is concerned with abuse of power: a company director must not, subjectively, act for an improper reason. [14 16] Where the instrument conferring a power is silent as to its purpose, this can be deduced from the mischief of the provision, its express terms and their effect, and the courts understanding of the business context. [30] Under article 42 in this case, the power to restrict the rights attaching to shares is ancillary to the statutory power to call for information under s 793. Article 42 has three closely related purposes: (i) to induce a shareholder to comply with a disclosure notice; (ii) to protect the company and its shareholders against having to make decisions about their respective interests in ignorance of relevant information; and (iii) as a punitive sanction for a failure to comply with a disclosure notice. Seeking to influence the outcome of shareholders resolutions or the companys general meetings is no part of those proper purposes. [31 33] The proper purpose rule applies to article 42. It is irrelevant whether Eclairs and Glengary could have averted the imposition of restrictions on their rights as shareholders by giving different answers to the questions. The proper purpose rule is the principal means by which equity enforces directors proper conduct, and is fundamental to the constitutional distinction between board and shareholder. A battle for control of the company is probably the context where the proper purpose rule has the most valuable part to play. [35 40] Lord Sumption and Lord Hodge consider that where the directors have multiple concurrent purposes, the relevant purpose or purposes are those without which the decision would not have been made. If that purpose or those purposes are improper, the decision is ineffective. [17 24] Mann J found that four of the six directors were concerned only with the effect of the restriction notices on the outcome of the general meeting. They acted for an improper purpose. [41, 25] Lord Neuberger, Lord Mance and Lord Clarke agree that the appeals should be allowed, but decline to express a concluded view on the application of a but for test to the proper purpose rule. [46 55] |
By October 2003 pressure groups had complained that coverage by the British Broadcasting Corporation [BBC] of the Israeli Palestinian conflict was not impartial [6]. In November 2003 Mr Malcolm Balen was appointed by the BBC to produce a report on the quality and impartiality of its coverage of Middle Eastern affairs [the Balen Report], which was intended to be an internal briefing document [6 7]. In November 2004 the Balen Report was considered by the BBCs Journalism Board, which consequently commissioned a paper called Taking Forward BBC Coverage of the Middle East [9]. A number of internal changes resulted, including development of training, auditing of on air use of experts and the creation of a post of Middle East Editor [10]. On 8 January 2005, the Appellant, Mr Steven Sugar, made a request pursuant to s.1 of the Freedom of Information Act 2000 [FOIA] for disclosure of the Balen Report [12]. The BBC is designated as a public authority in FOIA only to a limited extent, namely in respect of information held for purposes other than those of journalism, art or literature [1]. The BBC refused the request on the basis that it held the Balen Report for purposes of journalism and thus it lay beyond the scope of FOIA [12]. In March 2005 Mr Sugar applied to the Information Commissioner pursuant to s.50(1) of FOIA for a decision whether the BBC had determined his request within the terms of FOIA. The Commissioner concluded that the BBC had lawfully rejected his request as, even if the Balen Report had also been held for non journalistic purposes, it continued to lie beyond the scope of FOIA because the journalistic purpose was manifestly dominant [13]. The Commissioner also observed that BBC was not a public authority for the purposes of FOIA and thus Mr Sugar had no right of appeal under s.57 of FOIA to the Information Tribunal [15]. On 30 December 2005 Mr Sugar nevertheless appealed to the Tribunal, which determined it had jurisdiction. The House of Lords upheld its jurisdiction decision (in Sugar v BBC [2009] UKHL 9) since, even in relation to a request for information which was held to lie outside the designation, the BBC remained a public authority for the purposes of FOIA [20]. Before the Tribunal, Mr Sugar contended that even if the information is held only partly for purposes other than those of journalism, the information is within the scope of FOIA [4]. The BBCs primary contention was that where information is held for the purposes of journalism, that information is beyond the scope of FOIA even if it is also held even predominantly held for purposes other than journalism [3]. The BBCs secondary contention was that the information is within the scope of FOIA only if the purposes other than journalism are the dominant purpose for which it is held [5]. On 29 August 2006 the Tribunal accepted the BBCs secondary contention but held that the Balen Report was within the scope of FOIA as, once the report had been placed before the Journalism Board, it was held predominantly for purposes other than journalism [21]. On 2 October 2009 Mr Justice Irwin allowed the BBCs appeal on the basis that the BBC had no obligation to disclose information that the BBC held to any significant extent for the purposes of journalism and further that, even if the test was one of dominant purpose, the Tribunal had erred in finding that the Balen Report had been held predominantly for purposes other than those of journalism [22]. The Court of Appeal dismissed Mr Sugars appeal, rejecting the dominant purpose construction and approving the BBCs primary construction of the designation [23]. Sadly Mr Sugar died in January 2011. The court appointed his widow, Ms Fiona Paveley, to represent his estate in this appeal [4]. The Supreme Court unanimously dismisses the appeal. Lord Phillips, Lord Walker, Lord Brown and Lord Mance dismiss the appeal on the basis that, even if information is held only partly for the purposes of journalism, art or literature, it is outside the scope of FOIA. Lord Wilson would have dismissed it on the basis that, if information is held predominantly for the purposes of journalism, art or literature, it is outside the scope of FOIA and that the Balen Report was held predominantly for those purposes [57]. Section 7(1) of FOIA provides that, where a public authority is listed in Schedule 1 of FOIA only in relation to information of a specified description, nothing in Parts I to V of FOIA is to apply to any other information held by the authority [31; 69]. Under Part VI of Schedule I to FOIA the BBC is designated as a public authority only in respect of information held for purposes other than those of journalism, art or literature [1]. At the material time BBC held the Balen Report for the purposes of journalism. The issue is therefore how the phrase purposes other than those of journalism should be construed [2]. Four possible categories of information held by the BBC exist: (1) information held exclusively for purposes other than those of journalism [or art or literature]; (2) information held predominantly, but not exclusively, for non journalistic purposes; (3) information held predominantly, but not exclusively, for journalistic purposes and (4) information held exclusively for journalistic purposes [73]. The Appellant argued that the BBCs immunity under Part VI of Schedule I to FOIA was limited to information in category (4). The BBCs primary contention, upheld by Irwin J and the Court of Appeal, was that the BBC had to disclose information only in category (1) subject to particular exemptions under other provisions of FOIA [73]. The BBCs secondary contention, adopting a dominant purpose construction, was that only information in categories (1) and (2) had to be disclosed, subject to the exemptions. The court holds that the Court of Appeal was correct in deciding that once it is established that the information sought is held by the BBC to any significant degree for the purposes of journalism, it is exempt from production under FOIA, even if the information is also held for other purposes [67; 75; 104; 111]. The legislative purpose of FOIA is to promote an important public interest in access to information about public bodies [76]; but in this case there is a powerful public interest that the public service broadcasters, no less than the commercial media, should be free to gather, edit and publish news and comment on current affairs without the inhibition of an obligation to make public disclosure of or about their work [78]. The purpose of the designation would have failed if the coexistence of other non journalistic purposes resulted in the loss of immunity [78]. The real emphasis of the words is on what is not disclosable, namely material held for the purposes of the BBCs broadcasting output [79]. The Tribunal should have some regard to the directness of purpose, considering the proximity between the subject matter of the request and the BBCs journalistic activities and output [83]. The purpose of the designation is to protect the BBC from interference with its functions in broadcasting journalism, art and literature [64] and consequently a purposive construction of it would prevent disclosure that would risk such interference [65]. Information should be found to be held for the purposes of journalism, art or literature only if an immediate object of holding the information is to use it for one of those purposes [67]. As to the contention on behalf of the Appellant that this approach would violate Article 10 of the European Convention on Human Rights [ECHR], the Court noted the well established body of jurisprudence of the European Court of Human Rights that defines the nature of the right under Article 10(1) as prohibiting a government from restricting a person from receiving information that others are willing to impart to him but does not construe the article as imposing positive obligations on a State to disseminate information of its own motion [89]. The jurisprudence relied upon by the Appellant falls far short of establishing that an individuals freedom to receive information is interfered with whenever a public authority acting consistently with domestic legislation refuses access to documents [94]. Article 10 creates no general right to freedom of information [94] and consequently no interference with Mr Sugars ECHR rights [97]. Even if there had been such a right, it would be open to the State to legislate a blanket exclusion of any requirement to disclose information held for the purposes of journalism [98]. |
Internet protocol television (IPTV) is a way of delivering TV or video content over the internet. IPTV can be closed circuit or over the top. The appellants (PCCM) are a substantial group of companies based in Hong Kong which has provided a closed circuit IPTV service in Hong Kong since 2003. Since 2006 the service has been marketed and delivered under the name NOW TV. By 2012, NOW TV had become the largest pay TV operator in Hong Kong, with around 1.2 million subscribers, covering over half the households in Hong Kong. People in the UK cannot receive this closed circuit service, and no subscribers for its Hong Kong IPTV service have been recruited in the UK. However, a number of Chinese speakers permanently or temporarily resident in the UK in 2012 were aware of the NOW TV service through exposure to it when residing in or visiting Hong Kong, or from viewing NOW TV programmes on YouTube and other websites in the UK. The appellants have been considering expanding its NOW TV subscription service internationally since 2009. In June 2012 it launched a NOW player app in the UK on its website and via the Apple Store, targeted at the Chinese speaking population in the UK. Meanwhile, in March 2012, the respondents (Sky) announced that they intended to launch a new over the top IPTV service under the name NOW TV. The service was launched in beta form in mid July 2012. In April 2012, PCCM began proceedings seeking to prevent Sky from using the name NOW TV in connection with Skys IPTV service in the UK on the grounds that the use of the name amounted to passing off. The law of passing off prevents one trader from passing off its goods or services as the goods and services of another. At first instance, the judge found that a substantial number of Chinese speakers permanently or temporarily resident in the UK were acquainted with PCCMs NOW TV service. He also found that PCCMs NOW TV service had acquired a reputation amongst members of the Chinese speaking community in the UK and that this reputation was modest but more than de minimis. However he held that the key question was whether the viewers of PCCMs programmes in the UK were customers for its service and that, for the purposes of passing off, it was not enough for PCCM to establish that it had a reputation among a significant number of people in this country if it had no goodwill in this country. This led him to dismiss PCCMs claim. PCCMs appeal to the Court of Appeal was dismissed and PCCM now appeals to the Supreme Court. The Supreme Court unanimously dismisses the appeal. Lord Neuberger (with whom all the other Justices agree) delivers the judgment of the Court. Courts in the UK have consistently held that it is necessary for a claimant to have actual goodwill, in the sense of a customer base, in this jurisdiction before it can satisfy this requirement for the law of passing off [20 25]. Where the claimants business is abroad, people who are in the jurisdiction, but who are not customers of the claimant in the jurisdiction, will not do, even if they are customers of the claimant when they go abroad [47 48]. An examination of the approach in other Common Law jurisdictions suggests that the Singapore courts follow the approach of the UK courts, whereas the Courts of Australia and South Africa seem to favour the approach supported by PCCM; there does not appear to be a clear trend in the common law courts outside the UK away from the approach taken in the UK cases [50]. Goodwill in the context of passing off is territorial in nature and an English court has to consider the factual position in the UK. It is clear that mere reputation is not enough; the claimant must have significant goodwill in the form of customers in the jurisdiction. However, it is not necessary to have an establishment or office in this country [52 55]. The law of passing off involves striking a balance between the public interest in free competition and the protection of the trader against unfair competition; if it were enough for a claimant merely to establish reputation in the jurisdiction, without a significant number of people who are customers within the jurisdiction to maintain a passing off action, this would tip the balance too much in favour of protection [61 62], particularly in this modern era of global electronic communication [63]. It follows that PCCMs appeal should be dismissed. Its business is based in Hong Kong, and it has no customers, and therefore no goodwill, in the United Kingdom. The people in the UK who get access to PCCMs NOW TV programmes via the websites are not PCCM customers in the UK, because there is no payment involved and the availability of PCCMs product was intended to promote PCCMs Hong Kong business; as such it amounted to advertising in the UK which is insufficient to maintain a claim in passing off [67]. |
This appeal arises out of proceedings for financial remedies following a divorce between Michael and Yasmin Prest. The appeal concerns the position of a number of companies belonging to the Petrodel Group which were wholly owned and controlled by Michael Prest, the husband. One of the companies was the legal owner of five residential properties in the UK and another was the legal owner of two more. The question on this appeal is whether the court has power to order the transfer of these seven properties to the wife given that they legally belong not to the husband but to his companies. Under Section 24(1)(a) of the Matrimonial Causes Act 1973 (the 1973 Act), the court may order that a party to the marriage shall transfer to the other partysuch property as may be so specified, being property to which the first mentioned party is entitled, either in possession or reversion. In the High Court, Moylan J concluded that there was no general principle that entitled him to reach the companies assets by piercing the corporate veil. He nevertheless concluded that a wider jurisdiction to pierce the corporate veil was available under section 24 of the 1973 Act. In the Court of Appeal, three of the companies challenged the decision on the ground that there was no jurisdiction to order their property to be conveyed to the wife. The majority in the Court of Appeal agreed and criticised the practice of the Family Division of treating assets of companies substantially owed by one party to a marriage as available for distribution under section 24 of the 1973 Act. The Supreme Court unanimously allows the appeal by Yasmin Prest and declares that the seven disputed properties vested in the companies are held on trust for the husband on the ground (which was not considered by the courts below) that, in the particular circumstances of the case, the properties were held by the husbands companies on a resulting trust for the husband, and were accordingly property to which the [husband] is entitled, either in possession or reversion. Lord Sumption gives the leading judgment and Lord Neuberger, Lady Hale, Lord Clarke and Lord Walker add concurring judgments. There are three possible legal bases on which the assets of the companies might be available to satisfy the lump sum order against the husband: (1) that this is a case where, exceptionally, the Court may disregard the corporate veil in order to give effective relief; (2) that section 24 of the 1973 Act confers a distinct power to disregard the corporate veil in matrimonial cases; or (3) that the companies hold the properties on trust for the husband, not by virtue of his status as sole shareholder and controller of the company, but in the particular circumstances of the case [9]. After surveying the authorities, the Court holds that there is a principle of English law which enables a court in very limited circumstances to pierce the corporate veil. It applies when a person is under an existing legal obligation or liability or subject to an existing legal restriction which he deliberately evades or whose enforcement he deliberately frustrates by interposing a company under his control. The court may then pierce the corporate veil but only for the purpose of depriving the company or its controller of the advantage which they would otherwise have obtained by the companys separate legal personality. In most cases the facts necessary to establish this will disclose a legal relationship between the company and its controller giving rise to legal or equitable rights of the controller over the companys property, thus making it unnecessary to pierce the veil. In these cases, there is no public policy imperative justifying piercing the corporate veil. But the recognition of a small residual category of cases where the abuse of the corporate veil to evade or frustrate the law can be addressed only by disregarding the legal personality of the company is consistent with authority and long standing principles of legal policy. [35] The principle has no application in the present case because the husbands actions did not evade or frustrate any legal obligation to his wife, nor was he concealing or evading the law in relation to the distribution of assets of the marriage upon its dissolution [36]. Some of the concurring judgments reserve the possibility of a somewhat wider test, but not in respects which affect its application to the present case. The Court rejects the argument that a broader principle applies in matrimonial proceedings by virtue of section 24(1)(a) of the 1973 Act. The section invokes concepts of the law of property with an established legal meaning which cannot be suspended or taken to mean something different in matrimonial proceedings [37]. Nothing in the statutory history or wording of the 1973 Act suggests otherwise [86 9]. General words in a statute are not to be read in a manner inconsistent with fundamental principles of law unless this result is required by express words or necessary implication [40]. The trial judges reasoning cut across the statutory scheme of company and insolvency law which are essential for protecting those dealing with companies [41]. It follows that the only basis on which the companies could be ordered to convey properties to the wife is that they belong beneficially to the husband, by virtue of the particular circumstances in which the properties came to be vested in them [43]. After examining the relevant findings about the acquisition of the seven disputed properties, the Court finds that the most plausible inference from the known facts was that each of the properties was held on resulting trust by the companies for the husband. The trial judge found that the husband had deliberately sought to conceal the fact in his evidence and failed to comply with court orders with particular regard to disclosing evidence [4]. Adverse influences could therefore be drawn against him. [45]. The Court inferred that the reason for the companies failure to co operate was to protect the properties, which suggested that proper disclosure would reveal them to beneficially owned by the husband [47]. It followed that there was no reliable evidence to rebut the most plausible inference from the facts [49 51]. |
The facts of this case were extraordinary and tragic. On 2 October 2007, a 26 year old Polish care worker, Magda Pniewska, was walking home from a nursing home through a car park in New Cross, South London. She was on the telephone to her sister when she was shot in the head and killed. The shot was fired in an exchange of fire in the car park between two gunmen, B and Mr Gnango, neither of whom had been aiming at Magda. They had been shooting at each other. Scientific evidence showed that the single bullet to Magdas head had come from Bs and not Mr Gnangos gun. B was clearly guilty of murder under the doctrine of transferred malice. B however was never caught. Mr Gnango was charged with and convicted of murder following trial aged 17. On his appeal, the Court of Appeal overturned his conviction. The Court held that joint enterprise liability for murder, the basis on which the Court considered his conviction to rest, could not arise on the facts. In considering the appeal by the Crown, the Supreme Court was asked to address the following question: If D1 and D2 voluntarily engage in fighting each other, each intending to kill or cause grievous bodily harm to the other and each foreseeing that the other has the reciprocal intention, and if D1 mistakenly kills V in the course of the fight, in what circumstances, if any, is D2 guilty of the offence of murdering V? The Supreme Court allows the appeal by a 6 1 majority (Lord Kerr dissenting) and restores Mr Gnangos conviction for murder. Lord Phillips and Lord Judge together give the leading judgment of the Court, with which Lord Wilson agrees. The trial judge had directed the jury that, in order to convict, they had to be satisfied that there was a plan or an agreement to have a shoot out, whether made beforehand or on the spur of the moment when Mr Gnango and B saw and fired at each other in the car park [23, 57]. This was an unequivocal direction that the jury could convict only if they were satisfied that Mr Gnango and B had formed a mutual plan or agreement to have a gunfight, i.e. to shoot at each other and be shot at, in which each would attempt to kill or seriously injure the other. The jurys verdict indicates that they were so satisfied. Accordingly, this is a proper basis for finding that Mr Gnango aided and abetted the murder of the deceased by aiding and abetting B to shoot at him (i.e. Mr Gnango) [55 60]. The trial judges direction had properly been given on application of the principle of transferred malice: where a defendant intends to kill or cause serious injury to one victim, V1, but accidentally kills another, V2, he will be guilty of the murder of V2 [16, 60]. The application of this principle in the circumstances accords with the demands of justice: Mr Gnango and B had chosen to indulge in a gunfight in a public place, each intending to kill or cause serious injury to the other, in circumstances where there was a foreseeable risk that this result would be suffered by an innocent bystander. It was a matter of fortuity which of the two fired what proved to be the fatal shot [61]. There is no applicable statutory or common law bar that precludes conviction of Mr Gnango on the basis that he aided and abetted Bs attempt to kill him (i.e. Mr Gnango) or cause him serious injury [51 52]. Further, the Court can see no reason why it should extend the common law to protect from conviction any defendant who is, or is intended to be, harmed by the crime that he commits or attempts to commit [53]. Finally, whether Mr Gnango is correctly described as a principal or an accessory to the murder of the deceased is irrelevant to his guilt [62]. This is not such a case where it is important to distinguish between the principal and the accessory: the offence is the same offence and the defendant is guilty of it [63]. Lord Brown gives a concurring judgment. He holds that the all important consideration here is that both Mr Gnango and B were intentionally engaged in a potentially lethal unlawful gunfight. The general public would be astonished and appalled if in those circumstances the law attached liability for the death only to the gunman who actually fired the fatal shot (which it would not always be possible to determine) [68]. Lord Brown characterises Mr Gnangos liability for murder as that not of an accessory but a principal: a direct participant engaged by agreement in unlawful violence specifically designed to cause and in fact causing death [71]. Lord Clarke gives a concurring judgment. He agrees with Lord Brown that Mr Gnango is guilty of murder not as an accessory but as a principal to an agreement to engage in unlawful violence specifically designed to cause death or serious injury, where death occurs as a result [81]. Lord Dyson gives a concurring judgment. He holds that the jury must have been satisfied that there was an agreement between Mr Gnango and B to shoot at each other and be shot at [103], and that Mr Gnango aided and abetted the murder of the deceased by encouraging B to shoot at him in the course of the planned shoot out [104]. Lord Kerr gives the sole dissenting judgment of the Court. He holds that the jury was not invited at any time during the trial judges summing up to address the question of whether the shared common purpose between Mr Gnango and B included the important element of the avowed aiding and abetting: the agreement to be shot at [115]. The exchange of fire between the gunmen was at least as likely to be the result of a sudden, simultaneously reached, coincident intention by them to fire at each other as it was to be the result of an agreement to shoot and be shot at [121]. If the jury did not conclude that there was an agreement to shoot and be shot at, there is no sound basis of accessory liability on which to uphold their verdict [126]. In any event, an agreement to shoot and be shot at does not necessarily amount to an intention to assist or encourage the other to shoot. The jury would have needed to receive specific directions which they did not about this vital component of aiding and abetting [123]. Further, Lord Kerr considers that there is no sound basis for holding that Mr Gnango is liable for murder as a principal, since he had not by his own act caused or contributed to the commission of the offence with the necessary mens rea [127, 130]. Accordingly, Lord Kerr would dismiss the appeal. |
The Solicitors Act 1974 allows the Law Society to make rules requiring solicitors to maintain professional indemnity insurance. The rules made by the Law Society require such insurance to satisfy certain Minimum Terms and Conditions (MTC). The MTC prescribes a minimum figure for which solicitors must be insured for any one claim. It also permits the aggregation of claims in a number of circumstances including where the claims arise from similar acts or omissions in a series of related matters or transactions (Clause 2.5(a)(iv)) [1]. Midas International Property Development Plc sought to develop two holiday resorts, one in Turkey known as Peninsula Village and one in Marrakech, Morocco [3]. These were to be financed by private investors who would be granted security over the development land. A trust was set up for each development which either owned, or held a charge over, the development land. The developers solicitors were the initial trustees and the investors were the beneficiaries. The funds advanced by the investors were initially held by the solicitors in an escrow account. They were not to be released to the developers unless and until the value of the assets held by the trust was sufficient to cover the investment to be protected, applying a cover test set out in the trust deed [4]. For each investment, the developers solicitors opened a file, including a loan or purchase agreement between the investor and developers and an escrow agreement between the investor, developer and the solicitors [5]. The developers entered an agreement for the purchase of (i) the Peninsula Village site in April 2007 and (ii) shares in a local company which owned the Marrakech site in November 2007. The solicitors subsequently released to the developers tranches of the investment funds for each development. In May 2008, the Financial Services Authority prohibited the developers from receiving any further investment in relation to the developments and the developers were unable to complete the purchase of either site. The developers were wound up in November 2009 [6 7]. The investors brought two claims against the developers solicitors in the Chancery Division; one relating to each of the development sites. They alleged that the solicitors had failed to properly apply the cover test before releasing funds to the developers, resulting in the funds being released without adequate security [3, 8]. The solicitors had professional indemnity insurance with the appellant. The appellants liability is limited to 3m in respect of each claim. The investors claims amount to over 10m in total. The insurers issued proceedings against the solicitors in the Commercial Court for a declaration that the investors claims in the Chancery Division be considered as one claim under the aggregation provision in clause 2.5(a)(iv) MTC [9]. The Commercial Court dismissed the claim. It accepted that all the claims arose from similar acts or omissions, but rejected that they were in a series of related matters of transactions since the transactions between the developers and each investor where not mutually dependent [11]. The Court of Appeal did not agree that the transactions had to be dependent on each other. In allowing the appeal it held that the matters or transactions had to have an intrinsic relationship with each other, not an extrinsic relationship with a third factor [12]. The Supreme Court unanimously allows AIGs appeal. Lord Toulson, with whom the other justices agree gives the lead judgment. Clause 2.5(a)(iv) MTC has two separate limbs, each of which must be satisfied in order for it to apply. The first is that the claims arose from similar acts or omissions. It is not in dispute that this is satisfied in this case. The second is the requirement that the claims were in a series of related matters or transactions. This is an important limitation, without which the scope for aggregation would be almost limitless [17, 22]. However, it is difficult to understand what the Court of Appeal meant by the term intrinsic in the context of a relationship between two transactions [21]. The use of the word related implies that there must be some interconnection between the matters or transactions, however the Law Society did not see it fit to circumscribe this limb by any particular criteria, such as intrinsic. This is unsurprising since determining whether transactions are related is an acutely fact sensitive exercise [22]. The application of the aggregation clause is not to be viewed from the perspective of any particular party. It is to be judged objectively, taking the transactions in the round [25]. The starting point is to identify the relevant matter or transactions [23, 27]. The transactions in this case involved an investment in a particular development scheme under a contractual arrangement that was primarily bilateral, but had an important trilateral component by reason of the solicitors role as trustees and escrow agent [23]. The transactions entered into in respect of each development were connected in significant ways. Each set of investors invested in a common development, they were participants in a standard scheme and co beneficiaries under a common trust [24]. On the facts as they currently appear, the claims of each group of investors arise from acts or omissions in a series of related transactions; the transactions shared a common underlying objective of the execution of a particular development project and also fitted together legally through the trusts [26]. However, the transactions entered into by the Peninsula Village investors cannot be said to be related to those entered into by the Marrakech investors. They related to different sites, had different groups of investors and were protected by different deeds of trust over different assets. They should therefore not be aggregated together [27]. A number of investors transferred their investments from Peninsula Village to the Marrakech development, entering into a new loan agreement and new escrow agreement. On the facts as they currently appear, any claim made by such an investor in respect of the Peninsula Village development should be aggregated with the claims made by the other investors in that development and any claim made by that investor in respect of the Marrakech development should be aggregated with their first claim [29]. |
This appeal concerns the scope of legal advice privilege. Legal advice privilege applies to all communications passing between a client and its lawyers, acting in their professional capacity, in connection with the provision of legal advice. The specific issue raised by this appeal is whether, following receipt of a statutory notice from an inspector of taxes to produce documents in connection with its tax affairs, a company is entitled to refuse to comply on the ground that the documents are covered by legal advice privilege, in a case where the legal advice was given by accountants in relation to a tax avoidance scheme. The more general question raised by this issue is whether legal advice privilege extends, or should be extended, so as to apply to legal advice given by someone other than a member of the legal profession, and, if so, how far legal advice privilege thereby extends, or should be extended. In 2004, PricewaterhouseCoopers (PwC) devised a marketed tax avoidance scheme (the scheme). PwC adapted the scheme for the benefit of the Prudential group of companies, who implemented the scheme through a series of transactions (the transactions). The inspector of taxes considered it necessary to look into the details of the transactions. To that end, he served notices under section 20B(1) of the Taxes Management Act 1970 on Prudential (Gibraltar) Ltd and Prudential plc (together Prudential) giving them the opportunity to make available specified classes of documents. Prudential refused to disclose certain documents (the disputed documents) on the ground that Prudential was entitled to claim legal advice privilege in respect of them, because they related to the seeking (by Prudential) and the giving (by PwC) of legal advice in connection with the transactions. The inspector obtained authorisation from the Special Commissioners to require Prudential to disclose the disputed documents. Prudential issued an application for judicial review challenging the validity of those notices. Charles J rejected the application on the ground that, although the disputed documents would have attracted legal advice privilege if the advice in question had been sought from, and provided by, a member of the legal profession, no such privilege extended to advice, even if identical in nature, provided by a professional person who was not a qualified lawyer. His decision was upheld, substantially for the same reasons, by the Court of Appeal (Mummery, Lloyd and Stanley Burnton LJJ). The Supreme Court, by a majority of five to two (Lord Clarke and Lord Sumption dissenting), dismisses the appeal. Lord Neuberger gives the lead judgment for the majority. The majority hold that legal advice privilege should not be extended to communications in connection with advice given by professional people other than lawyers, even where that advice is legal advice which that professional person is qualified to give [51]. To do so would extend legal advice privilege beyond what are currently, and have for a long time been, understood to be its limits [37], [80]. It is universally believed that legal advice privilege only applies to communications in connection with advice given by members of the legal profession [29]. There are clear judicial statements of high authority to that effect [30]. The current editions of textbooks on privilege and evidence, as well as more than one significant official report, have proceeded on this basis [32], [33]. Extending legal advice privilege to any case where legal advice is given by a person who is a member of a profession which ordinarily includes the giving of legal advice would be likely to lead to a clear and well understood principle becoming uncertain, because it is unclear which occupations would be members of a profession for this purpose [52] [55], [80], [100]. There would be room for uncertainty, expenditure, and inconsistency, if the court had to decide whether a group constitutes a profession for the purposes of legal advice privilege [56]. It is also unclear how a court would decide whether a profession is one which ordinarily includes the giving of legal advice [57], [91]. Where members of other professions give legal advice, it will often not represent the totality of the advice, so it may also be difficult to decide how to deal with documents which contain legal and non legal advice [59]. Further, the extension of legal advice privilege to cases where legal advice is given from professional people who are not qualified lawyers raises questions of policy which should be left to Parliament [52], [81], [92]. The consequences of extending legal advice privilege should be considered through the legislative process, with its wide powers of inquiry and consultation and its democratic accountability [62]. The extension of legal advice privilege to professions other than lawyers may only be appropriate on a conditional or limited basis, which cannot appropriately be assessed, let alone imposed, by the courts [65]. Parliament has on a number of occasions legislated in this field on the assumption that legal advice privilege only applies to advice given by lawyers. Therefore it would be inappropriate for the Supreme Court to extend the law [52]. The minority consider that legal advice privilege extends to advice given by members of a profession which has as an ordinary part of its function the giving of skilled legal advice [114], [148], and that recognising the privilege attaching to the legal advice of accountants would not be extending the scope of legal advice privilege [128]. English law has always taken a functional approach to legal advice privilege [123]. On this view, the availability of legal advice privilege depends on the character of advice which the client is seeking and the circumstances in which it is given, and not on the advisers status, provided that the advice is given in a professional context [114], [142]. Lord Reed adds some observations about the case from a Scottish perspective, without intending to pre empt a full discussion on the matter should the issue arise in Scottish proceedings [102] [113]. These observations are made on the basis that the general principle, its fundamental importance, and the considerations of public policy which underlie it, are common to both Scots law and English law. Lord Reed concludes that if the question were to arise in Scotland whether the common law privilege should be extended to legal advice given by accountants, the courts would have to make a policy decision [113]. |
This appeal is about who should pay the legal costs of 426 claimants who successfully sued a medical group for the supply of defective silicone breast implants. It allows the Supreme Court to review the principles concerning third party costs orders. 623 claims were brought against Transform Medical Group (CS) Ltd (Transform), a medical clinic which had supplied implants manufactured by Poly Implant Prothse (PIP). Transform had insurance cover with Travelers Insurance Co Ltd (Travelers) in relation to claims brought against it. Travelers funded the whole of Transforms defence. It did not disclose until a relatively late stage that a substantial number of claimants were uninsured. The insurance policy only covered the claims of 197 claimants who suffered from a rupture of their implants between 31 March 2007 and 30 March 2011. Transform was uninsured in respect of the claims of the remaining 426 claimants. The uninsured claimants are the Respondents to this appeal. Transform entered insolvent administration half way through the litigation. The insured claims were settled by an agreement made in August 2015 and Travelers paid an agreed proportion of the damages and costs attributable to those insured claims. This left the insured claimants in a much better position than the uninsured claimants who had obtained a judgment but recovered no damages or costs from Transform at all. The 426 uninsured claimants applied to the court for an order that Travelers pay their costs. Lady Justice Thirlwall, sitting in the High Court, held that Travelers should be ordered to pay them. The Court of Appeal (Lord Justice Lewison and Lord Justice Patten) reached the same conclusion for slightly different reasons. Travelers appealed to the Supreme Court. The Supreme Court unanimously allows Travelers appeal. Lord Briggs gives the main judgment, with which Lady Black and Lord Kitchin agree. Lord Reed and Lord Sumption each give a concurring judgment. The court has a general power to order non parties to pay costs under section 51 of the Senior Courts Act 1981 [25] [26]. In the context of liability insurance, it is important for the courts to apply clear and reasonably detailed principles so that liability insurers can understand their position. It is not enough for the courts to ask whether the case is exceptional because this would not provide adequate certainty [33]; [51]. Broadly speaking, the authorities reveal two approaches to deciding whether a third party should pay costs: (1) whether the third party took control of the litigation and became the real defendant; and (2) whether the third party engaged in unjustified intermeddling. The real defendant test, as explained by the Court of Appeal in TGA Chapman Ltd v Christopher [1998] 1 WLR 12, provides useful guidelines for cases where insurance exists but some part of the claim (including the claim for costs) lies outside the limits of cover [48] [53]. However, it is inappropriate in cases like this where the claims are wholly uninsured [54]. In such cases, the appropriate question is whether the insurer engaged in unjustified intermeddling in litigation to which it was not a party. If the insurer has acted within a framework of contractual obligation, it may be very hard to establish that it has intermeddled [55] [56]; [78]. It will usually be necessary to establish a causative link between the insurers involvement and the claimants incurring of costs [65] [67]; [80]. In this case, all the claims were pursued within a single group action by common solicitors. They involved common issues which were being tried together in four test claims (which, as it turned out, comprised two insured and two uninsured claims) [68]; [79]. Travelers had a legitimate interest in Transforms defence of the insured claims and, consequently, in Transforms defence of the test cases and common issues. Travelers involvement was the natural result of its status as an insurer and did not amount to unjustified intermeddling [69]. The courts below relied on a number of specific instances of Travelers conduct. However, none of them crossed the line into unjustified intermeddling: (1) Non disclosure of the limits of cover. Travelers and Transforms solicitors advised Transform not to disclose the limits of its insurance cover. However, as the law stands, parties are not legally obliged to disclose the details of their insurance [59]. The advice about non disclosure fairly reflected Travelers rights relating to the insured claims [63] [64]; [81]. (2) Offers and admissions. Travelers was involved in Transforms decisions not to make offers of settlement or admissions to the uninsured claimants [70] [71]. If necessary, the court would conclude this involvement was justified but in any event, it did not cause the claimants to incur costs. By 2015 the uninsured claimants were determined to pursue their claims to a judgment with costs, and an offer to settle without paying their costs would have made no difference [73] [74]. (3) Asymmetry of risk. The Court of Appeal was concerned by the fact that the uninsured claimants faced failing to recover their costs if they won, whereas Transform could have recovered its costs if they had failed [58]. However, this asymmetry was not the product of Travelers intervention. It resulted from the fact that Transform was insolvent and largely uninsured, and the claimants liability for costs was several only (i.e. each claimant was independently liable for a small proportion of the overall costs) [61] [62]; [82]. Therefore, the courts below were wrong to order Travelers to pay the uninsured claimants costs [83]. Concurring judgments of Lord Reed and Lord Sumption Lord Reed reviews the historical position in England, Australia and New Zealand relating to third party costs orders [85] [93]; [106] [112] and compares this to Scotland, where the courts may order expenses against a third party who has acted as the real master of the litigation, and where there is no equivalent concept to intermeddling [94] [103]. Lord Reed adds that the suggestion that a costs order must be exceptional has little, if any, significance [106] [112]. Lord Sumption discusses the intermeddling and real defendant approaches. He suggests that cases in which an insurer has engaged in intermeddling are likely to be rare, and an insurer who acts in good faith in relation to insured claims should not incur liability in costs [113] [116]. |
Mr Geys was employed by Socit Gnrale, London Branch (the Bank) as Managing Director of European Fixed Income Sales from 9 February 2005. He had a written contract and further terms were incorporated into it by the Banks Staff Handbook. The contract contained a provision permitting either party to terminate his employment by giving 3 months notice. The Handbook contained a payment in lieu of notice (PILON) clause. It reserved the Banks right to terminate his employment at any time with immediate effect by making a payment to you in lieu of notice (or, if notice has already been given, the balance of your notice period). If exercised, the contract required the Bank to make a termination payment including a Compensation Payment. This was to be calculated by reference to the date when the employment terminated. If the date was after 31 December 2007, Mr Geys was entitled to a Compensation Payment reflecting awards made to him for the calendar years 2006 and 2007. If it was before that date, it would be assessed by reference to his awards in 2005 and 2006, which were significantly lower. On 29 November 2007 Mr Geys was summarily dismissed in breach of the terms of the contract. On 18 December 2007 the Bank paid into his bank account the correct sums due to him under the PILON clause. The Bank then sent Mr Geys a payslip and P45 setting out the payments. He first saw them on 7 or 8 January 2008. On 2 January 2008 Mr Geys solicitors wrote to the Bank saying Mr Geys had decided to affirm his contract and requesting further details on the termination and associated payments. On 4 January 2008 the Bank wrote to Mr Geys giving further details. George Leggatt QC (sitting as a Deputy High Court Judge) held that the date when Mr Geys received the Banks letter (deemed to be 6 January 2008) was the first time it notified him that it had exercised its contractual termination rights. The Court of Appeal (Arden, Rimer, Pitchford LLJ) held that it had been terminated on 18 December 2007 when the PILON was made into his account. The Banks primary case was that the contract was terminated on 29 November 2007 when Mr Geys was summarily dismissed. This was rejected by the Court of Appeal, who were bound by Gunton v Richmond upon Thames London Borough Council [1981] Ch 448. In that case the common law principle that a repudiatory breach terminated a contract only if and when it was accepted was applied to contracts of personal service. Four issues came before this Court: (1) Does a repudiation of an employment contract, which takes the form of an express and immediate dismissal, automatically terminate the contract (this is the automatic theory) or as was held in Gunton does the normal contractual rule apply that repudiation must be accepted by the innocent party (this is the elective theory)? (2) When in accordance with the PILON clause was Mr Geys contract terminated? (3) Is there any conflict between the 3 months notice provision in the main contract and the PILON clause in the Handbook? (4) Is Mr Geys entitled to claim damages for wrongful dismissal and for a breach of the tax efficiency provisions in the contract, as well as the termination payment, or is he required by the terms of the contract to have waived those claims? The Supreme Court allows Mr Geys appeal by a majority of 4:1 (Lord Sumption dissenting). On the first issue, the majority upheld the elective theory that a wrongful repudiation terminates the contract only if and when accepted by the innocent party. The automatic theory rewarded a wrongful repudiator of an employment contract, allowing him to select a termination date that suited him to the detriment of the innocent party. The theory also failed to explain cases where, following an unaccepted repudiation, provisions that did not survive the termination had been enforced against the repudiator, such as those relating to competition or disciplinary procedures [69, 75]. Nor had it been applied in the employment context to the extent that its proponents suggested [CA 83 86, 88 89]. There was a circularity in the premise that there is no remedy so there is no right so there is no remedy. [89] Concerns are expressed about how far the automatic theory, if valid, would extend [95 6]: Should dismissals/resignations be treated differently if they are (1) express or implied; (2) immediate or delayed; or (3) outright or less than outright, and is the distinction workable? (4) If a fundamental breach other than by dismissal does not attract the automatic theory, why should breaches for dismissal, which strike more clearly at the continuation of the contract? (5) If extended to constructive dismissals, it is inconsistent with the notion that resignation is in response to a fundamental breach, as well as the inherent need for acceptance. (6) The theory could be extended to contracts for services with similar consequences. Lord Sumption held that Gunton was contrary to the consensus existing up the 1970s. Innocent parties did not have an unfettered right to treat the contract as subsisting. He drew attention to Lord Reids qualification in White & Carter (Councils) Ltd v McGregor [1962] AC 413 that a repudiated contract can only continue with the co operation of both parties. Innocent parties cannot treat contracts as subsisting if they cannot perform or enforce it and its subject matter and core obligations have ended. It creates problems of mitigation, it compels an employee to accept repudiation or mitigate loss of his bargain when in law it has not been lost, and it leaves an employer with penumbral liability for an uncertain duration. The elective theory in this case produces an unjust result giving Mr Geys a windfall, despite suffering no substantial loss measurable in damages [110]. On the second issue, the majority held that it was not until 6 January 2008, when Mr Geys received the Banks 4 January 2008 letter, that the right to terminate under the PILON clause was validly exercised [61]. The PILON clause did not dispense with the requirement for an employee to be notified of termination [54, 61]. The employment relationship required the other party to be notified in clear and unambiguous terms that the right to end the contract was being exercised, and how and when it is intended to operate. An employee should not be required to check his bank account to discover if he is still employed [58]. The employees bank is not his agent for the receipt of notification of what the payment is for [60]. On the third issue, the Court was unanimous. It saw no inconsistency between the 3 months notice contractual provision and the Handbooks PILON clause. The contract set out one method of termination, but it was not the only method. The PILON clause could be read as a qualifying provision to the contract. A court, in the face of two seemingly inconsistent provisions, must try to reconcile them conscientiously and fairly [25]. On the fourth issue too the Court was unanimous. It held that Mr Geys could claim for damages for wrongful dismissal and for breach of the tax efficiency provisions. The contractual provisions imposed mutual obligations on both parties: the Bank was obliged to make the termination payment and Mr Geys was obliged to enter into the termination agreement. There was no provision entitling Mr Geys to waive that obligation so that he could preserve his claims. If he failed to enter into it, he would be in breach of contract and liable to the Bank for damages [33]. The provisions purporting to require Mr Geys to waive his right to claim damages conceived in favour of the Bank, and any ambiguity must be construed in Mr Geys favour [39]. |
In October 2002, Airtours Holidays Transport Ltd (Airtours) was in serious financial difficulties. It was suggested to Airtours that it should commission an accountants report to satisfy the 80 or so banks and other financial institutions (the Institutions) from which it had borrowed money that its proposed restructuring and refinancing proposals were viable. The Institutions were agreeable to this. Subsequently, pursuant to a decision in which both the Institutions and Airtours were involved, PwC were appointed to produce a report (the Report). The original terms of PwCs appointment were set out in a letter dated 5 November 2002 addressed to the Engaging Institutions (the Letter) and attached terms and conditions (together, the Contract). The Contract provided that Airtours was to pay PwCs fees for producing the Report and related work, and Airtours duly did so in due course. Airtours also paid PwC VAT in the form of output tax on those payments. Airtours then sought to deduct that VAT as input tax in its VAT returns for the relevant periods. HMRC challenged Airtours ability to do so. While HMRC accepted that the Contract was of commercial benefit to Airtours, they contended that Airtours was not entitled to deduct the VAT on PwCs fees as input tax because PwCs services under the Contract were not supplied to Airtours. Airtours appealed to the First tier Tribunal, who found for Airtours. The Upper Tribunal allowed HMRCs appeal. The Court of Appeal dismissed Airtours appeal. Airtours now appeals to the Supreme Court. The Supreme Court dismisses Airtours appeal by a majority of 3 to 2. Lord Neuberger gives the leading judgment, with which Lord Mance and Lord Hodge agree. Lord Carnwath and Lord Clarke both give dissenting judgments. In order for the VAT charged by PwC and paid by Airtours to be reclaimable as input tax, it must be VAT on the supply to [Airtours] of any goods or services [19]. The issue of whether there has been a supply of services by PwC to Airtours gives rise to two principal questions [20]. The first is whether PwC agreed, under the terms of the Contract, to supply services, and in particular to provide the Report [21]. HMRC accept that, if the answer to that question is yes, the appeal must be allowed. PwCs commitment to provide the services described in the Contract was a contractual commitment to the Engaging Institutions, and not to Airtours [23], for the following reasons: (i) the Letter is addressed To the Engaging Institutions, and not to Airtours [24]; (ii) paragraph 1 of the Letter provides that the Institutions had retained PwC; there is no suggestion that Airtours had done so [24]; (iii) paragraph 4 of the Letter provides that any reports are for the sole use of [those] institutions [24]; (iv) paragraph 8 of the Letter states that the Report is to be provided to the Institutions and Airtours is only to be provided with a copy, which can be redacted [25]; (v) paragraphs 9 and 10 of the Letter recognise a duty of care on the part of PwC to the Institutions, but does not acknowledge one to Airtours; further, paragraph 11 excludes any duty of care or liability to any other party [26]. While Airtours did countersign the Letter, it had to do so in order to be bound by certain provisions, such as those relating to the payment of PwCs fees [28]. The fact that Airtours, rather than the Institutions, was to pay PwC for the services, can be fairly said to raise a prima facie expectation that PwC would owe a duty to Airtours to provide those services. However, the Institutions wanted the services; there is no indication Airtours would have still paid for those services had that not been the case [35]. The same can be said of Airtours argument that its interest in having a report produced for the Institutions indicates there was a supply of services to it [37]. The second question arises from Airtours argument that, in any event, in order to succeed on this appeal, it does not have to show that it had a contractual right to require the services under the Contract to be provided to the Institutions by PwC to succeed. Rather, Airtours argues that the facts that (i) it had a substantial commercial interest in the services being provided by PwC and (ii) it not merely countersigned the Contract but thereby agreed to pay PwC for the services, justify the conclusion that the services were supplied to Airtours, as well as the Institutions [43]. Airtours relies on Lord Milletts statement in Commissioners of Customs and Excise v Redrow Group Plc [1999] 1 WLR 408 that the question to be asked is whether the taxpayer obtained anything anything at all used or to be used for the purposes of his business, but this has to be read in the light of later cases [44 45]. As subsequent authority has clarified, that statement should be interpreted consistently with the established approach of focusing on economic realities as the fundamental criterion for the application of VAT [45]. It is clear from domestic and European Court of Justice judgments that, where the person who pays the supplier is not entitled under the contractual document to receive any services from the supplier, then, unless the documentation does not reflect the economic reality, the payer has no right to reclaim by way of input tax the VAT in respect of the payment to the supplier [50]. Lord Clarke and Lord Carnwath each give judgments dissenting on the analysis of both the Contract and the commercial reality of the relationship between Airtours and PwC. Lord Clarke concludes that, in this case, PwC was making two distinct supplies, one to Airtours, and another to the Institutions [64 5]. Lord Carnwath considers that it is inappropriate to resolve the appeal on a narrow legalistic approach to construction of the Contract, particularly where the distinction between services to Airtours and services to the Institutions is unlikely to have been seen as of any practical significance to the parties [81]. He further considers that the argument that Airtours, having paid a 200,000 retainer to PwC, did not have an enforceable right, is an impossible one to accept, either as a matter of contractual construction or as a matter of economic reality [84]. |
Mr and Mrs McArthur are Christians who hold the religious belief that the only form of marriage consistent with Biblical teaching and acceptable to God is that between a man and a woman. They are the owners of a bakery business (Ashers). Ashers offered a Build a cake service by which customers could request images or inscriptions to be iced onto a cake. In May 2014 Mr Lee, a gay man, wished to take a cake to an event organised by campaigners for same sex marriage in Northern Ireland. He placed an order with Ashers for a cake iced with a depiction of the cartoon characters Bert and Ernie and the words Support Gay Marriage. Mrs McArthur initially took the order but later advised Mr Lee that she could not in conscience produce such a cake and gave him a refund. Mr Lee brought a claim against the McArthurs and Ashers (the appellants) for direct and indirect discrimination on grounds of sexual orientation, contrary to the Equality Act (Sexual Orientation) Regulations (Northern Ireland) 2006 (the SORs) and/or on grounds of religious belief or political opinion, contrary to the Fair Employment and Treatment (Northern Ireland) Order 1998 (FETO). His claim was supported by the Equality Commission for Northern Ireland. The district judge in the county court held that refusing to complete his order was direct discrimination on all three grounds. The appellants appealed by way of case stated to the Court of Appeal, arguing that FETO and the SORs were incompatible with the McArthurs rights under the European Convention on Human Rights (ECHR). The Court of Appeal served a devolution notice and notice of incompatibility on the Attorney General, who then became a party to the proceedings. On 24 October 2016 the Court of Appeal dismissed the appeal, holding that Mr Lee had suffered direct discrimination on grounds of sexual orientation and that it was not necessary to interpret the SORs to take account of the McArthurs ECHR rights. On 28 October 2016, before the order dismissing the appeal had been drawn up, the Attorney General gave notice to the Court of Appeal, requiring it to make a reference to the Supreme Court under paragraph 33 of Schedule 10 to the Northern Ireland Act 1998. The Court of Appeal concluded that he had no power to do so as the proceedings had ended. The Attorney General therefore made two references to the Supreme Court of devolution issues under paragraph 34, the first on the validity of FETO and the SORs and the second on whether the Court of Appeal should have made a reference. The appellants applied for permission to appeal against the order of the Court of Appeal, and this application was heard together with the Attorney Generals references. The Supreme Court unanimously holds that it has jurisdiction to hear an appeal against all aspects of the Court of Appeals judgment, finding that the Court of Appeal erred in refusing to make a reference pursuant to the Attorney Generals notice under paragraph 33. It grants the appellants permission to appeal and allows their appeal. The Court concludes that neither the SORs nor FETO imposes civil liability on the appellants for the refusal to express a political opinion contrary to their religious beliefs. Lady Hale gives the judgment on the discrimination issues, and Lord Mance that on the jurisdiction issues. The sexual orientation claim The district judge found that the appellants did not refuse to fulfil Mr Lees order because of his actual or perceived sexual orientation. The objection was to the message on the cake, not any personal characteristics of the messenger [22], or anyone with whom he was associated [33 34]. The message was not indissociable from the sexual orientation of the customer, as support for gay marriage was not a proxy for any particular sexual orientation [25]. The benefit of the message accrues not only to gay or bisexual people, but to their families and friends and to the wider community who recognise the social benefits which such commitment can bring [33]. Thus, there was no discrimination on grounds of sexual orientation in this case. The political beliefs claim Protection against direct discrimination on grounds of religious belief or political opinion has constitutional status in Northern Ireland [37]. The discrimination has to be on the ground of the religion or belief of someone other than the alleged discriminator [43 45]. As the appellants objection was not to Mr Lee, but to being required to promote the message on the cake, the situation was not comparable with people being refused jobs or services simply because of their religious faith, but it was arguable that the message was indissociable from Mr Lees political opinion. It was therefore necessary to consider the impact of the McArthurs ECHR rights on the meaning and effect of FETO [48]. Impact of ECHR rights The rights to freedom of thought, conscience and religion (article 9) and to freedom of expression (article 10) were clearly engaged by this case [49]. They include the right not to be obliged to manifest beliefs one does not hold [52]. The McArthurs could not refuse to provide their products to Mr Lee because he was a gay man or because he supported gay marriage, but that was different from obliging them to supply a cake iced with a message with which they profoundly disagreed [55]. FETO should not be read or given effect in such a way as to compel them to do so unless justification was shown, and it had not been in this case [56, 62]. Jurisdiction The appellants were entitled to appeal to the Supreme Court in relation to FETO notwithstanding their election to appeal to the Court of Appeal by way of case stated. Although such appeals are usually final under article 61(6) of the County Courts (Northern Ireland) Order 1980 (article 61(6)), there is an exception in section 42(6) Judicature (Northern Ireland) Act 1978 in respect of decisions involving any question as to the validity of measures of the Northern Ireland Assembly. FETO was equivalent to such a measure and the appellants did challenge its validity if it failed to protect their rights. It was not necessary to decide whether this also permitted the SORs appeal, given the overlap in the circumstances, because of the Supreme Courts conclusions on the Attorney Generals references [63 71]. The Court of Appeal had been wrong to reject the reference requested by the Attorney General under paragraph 33 on the ground the proceedings were concluded. In principle, appeals are against orders not judgments and, in this context, it is natural to regard the proceedings as live until a final order is issued. This error had deprived the appellants of the inevitably different judgment on the question of whether the SORs imposed civil liability on them for their refusal to express a political opinion contrary to their religious beliefs, which would have eventually followed. An appeal to the Supreme Court following such a procedural error was not precluded by article 61(6), which was focused on the point of law not on a challenge to the fairness or regularity of the Court of Appeals process. Even though the error was collateral to the litigation between the appellants and Mr Lee, it would be overly technical to deny the appellants the benefit of the proper handling of the reference. An appeal therefore lay to the Supreme Court against all aspects of the Court of Appeals judgment, including its decision in respect of the alleged discrimination under the SORs as well as under FETO [76 90]. |
S J & J Monk (SJJM) own the freehold of the first floor of a three storey office building. Previously the premises were occupied by tenants as a single office suite. In March 2010 SJJM entered into a building contract for the renovation of the property to make it more adaptable for use as either three suites of offices, or as a single suite, in order to attract replacement tenants. After entering into the building contract and until at least 6 January 2012, SJJM had the property marketed as available for rental either as three separate office suites or as a whole. On 6 January 2012, which is the relevant date for determining the rateable value of the property on an application to alter the rating list, the property was vacant and substantial construction work had been undertaken, with the premises stripped to a shell. SJJM wished to reduce the propertys liability to local authority rates during reconstruction. These rates are a tax on property on the rating list. The 2010 rating list listed the property as offices and premises with a 102,000 rateable value. On 6 January 2012 SJJM proposed to the valuation officer (the VO) that the property description should be altered to building undergoing reconstruction and the rateable value reduced to 1 as the property could not be occupied due to the building works. The issue in the appeal is whether the property should be rated having regard to its physical condition on 6 January 2012 or whether paragraph 2(1)(b) of Schedule 6 to the Local Government Finance Act 1988, as amended by the Rating (Valuation) Act 1999, requires a valuation officer to assume the property was in reasonable repair in its previous state as offices and premises on that date. Para 2(1) of Schedule 6 provides that the rateable value of the property is an amount equal to the rent at which it is estimated it might be expected to be let from year to year, subject to the assumption in para 2(1)(b) that immediately before the tenancy begins, the property is in a state of reasonable repair, but excluding from that assumption any repairs which a reasonable landlord would consider uneconomic. The VO rejected SJJMs proposal to alter the description of the property on the rating list. The Valuation Tribunal upheld his decision. The Upper Tribunal allowed SJJMs appeal, holding that the property had been stripped out beyond reasonable repair. It held that the para 2(1)(b) assumption did not extend to the replacement of systems which had been completely removed. The property should be rated as a building undergoing reconstruction and the rateable value of the premises reduced to 1. The Court of Appeal allowed the VOs appeal and held that para 2(1)(b) created an assumption that the repairs would return the premises to their former state, provided that they were economic. This displaced the reality principle that the property should be valued as it existed on 6 January 2012. The property should be valued as if it were in a state of reasonable repair. The Supreme Court unanimously allows S J & J Monks appeal and restores the determination of the Upper Tribunal. Lord Hodge gives the judgment, with which the other Justices agree. Before Parliament enacted Schedule 6 to the 1988 Act it had long been an established principle of rating law that property should be valued as it in fact existed on the material day. That principle is referred to as the reality principle [12]. The reality principle continues to be a fundamental principle of rating and is manifested in Schedule 6, in particular para 2(6) and (7), which provide that certain matters relating to the property, including matters affecting its physical state and the mode or category of its occupation, shall be taken to be as they are assumed on the material day [14]. The legislative history shows that the repairing assumption introduced by para 2(1)(b) of Schedule 6 did not supplant the reality principle by requiring that the premises are to be assumed to be in a reasonable state of repair for the mode of occupation listed on the rating list, namely as offices and premises [15]. The Court of Appeal went too far in interpreting that assumption as displacing the reality principle in relation to both the physical state of the property undergoing redevelopment and to its mode of occupation. The para 2(1)(b) assumption of reasonable repair at the outset of a hypothetical tenancy is not addressing the question of whether the premises were capable of beneficial occupation. In the context of a building undergoing redevelopment that is a question that requires to be asked first. Therefore, the repair assumption applies to matters affecting the physical state of the property (para 2(7)(a)) but not to its mode or category of occupation (para 2(7)(b)) [20]. A valuation officer must assess objectively whether a property is undergoing reconstruction, and therefore incapable of beneficial occupation, rather than simply being in a state of disrepair. In carrying out that objective assessment of the physical state of the property on the material day, the valuation officer can have regard to the programme of works being undertaken on the property. If the works are assessed as involving redevelopment, there is no basis for applying the para 2(1)(b) assumption to override the reality principle and to create a hypothetical tenancy of the previously existing property in a reasonable state of repair. This is both because a building under redevelopment, like a building under construction, is incapable of beneficial occupation and because the hypothetical landlord of a building undergoing redevelopment would not normally consider it economic to restore it to its prior use [23]. If, during redevelopment, some part of the property becomes capable of occupation, the para 2(1)(b) assumption might apply to that part, but para 2(1)(b) does not deem the development complete [24]. There is no statutory bar preventing an application to alter the rating list to reflect the actual state of the property undergoing redevelopment [29]. There is also no bar to implementing a proposal to alter the description of a property on the rating list from offices and premises to building undergoing reconstruction and consequently to reduce the listed rateable value to a nominal amount if the facts, objectively assessed, support that alteration. Furthermore, there is no basis for the argument that a property can be listed as being under reconstruction only once the works have proceeded so far that it is no longer economic to undertake repairs to restore the property to its former state [31]. On the facts found by the Upper Tribunal, the building was undergoing reconstruction on 6 January 2012 and the Upper Tribunal was entitled to alter the rating list to reflect that reality [33]. |
In 2003, the appellant, Egon Zehnder Ltd (Egon Zehnder), an executive search and recruitment company, hired the respondent, Ms Tillman, to work in its financial services practice area. She was first employed as a consultant and promoted to principal in 2006, partner in 2009 and joint global practice head in 2012. She was always employed largely on the terms of her original contract (the agreement). Clause 13 provided for five restraints upon the activities of Ms Tillman following the end of her employment, all limited to a period of six months from the termination date. Clause 13.2.3 (the non competition covenant) is in issue in this appeal. By this covenant, Ms Tillman agreed that she would not directly or indirectly engage or be concerned or interested in any business carried on in competition with any of the businesses of [Egon Zehnder] within a twelve month period prior to the termination date and with which [she was] materially concerned during such period. On 30 January 2017 Ms Tillmans employment with Egon Zehnder came to an end. Shortly thereafter, she informed it that she intended to start work as an employee of a competitor firm. She made clear that she intended to comply with all her covenants in the agreement apart from the non competition covenant in clause 13.2.3. She conceded that it would prevent her proposed employment within the restricted six month period but alleged that it was in unreasonable restraint of trade and thus void. On 10 April 2017 Egon Zehnder issued proceedings. It applied for an interim injunction to restrain Ms Tillmans entry into the proposed employment. On 23 May 2017 Mr Justice Mann (Mann J) in the High Court granted the injunction. The Court of Appeal allowed Ms Tillmans appeal and set aside the injunction. In the courts below, the enforceability of the non competition covenant turned on whether the words interested in unreasonably prevented even a minor shareholding by Ms Tillman in a competing business and, if so, whether the offending part of the covenant could be severed. Mann J agreed with the company that interested in did not preclude a minor shareholding, without reaching a final view on severance. The Court of Appeal disagreed with Mann J on the effect of the words interested in, considering that they did prohibit even a minor shareholding, and refused to sever those words. Clause 13.2.3 was thus held to be void as an unreasonable restraint of trade. In this Court, the issues were whether: (1) assuming that clause 13.2.3 prohibits shareholding, that part of the covenant falls entirely outside the restraint of trade doctrine; (2) the words interested in, properly construed, prohibit any shareholding; and (3) the correct approach to severance was applied. The Supreme Court unanimously allows the appeal. Lord Wilson gives the lead judgment, with which all members of the Court agree. The injunction granted by Mann J is formally restored although the contractual period of restraint has since expired. Issue (1): Scope of application of the restraint of trade doctrine The restraint of trade doctrine is one of the earliest products of the common law, and reflects the central importance ascribed to the freedom to work [22]. By the early 20th century, it was recognised that different considerations applied to restraints on the seller of a business from those on an ex employee [27]. The question of the width of the doctrine has arisen, particularly in Esso Petroleum Co Ltd v Harpers Garage (Stourport) Ltd [1968] AC 269 (HL), which remains the key decision [27 29]. It is not necessary to decide on the outer boundaries of the doctrine in this case [30]. The agreement is an employment contract, and it is agreed that clause 13.2.3 does provide for a restraint of trade [30]. In substance as well as in form the restraint on shareholding is part of the restraint on Ms Tillmans ability to work after her employment with Egon Zehnder, so the doctrine applies on the facts [33 34]. Issue (2): Proper construction of the words interested in This issue turns on the proper understanding of the validity principle in construing agreements. This principle proceeds on the premise that the parties to a contract or other instrument will have intended it to be valid [38]. This Court considers that requiring two meanings to be equally plausible or for there to be an element of ambiguity is unsatisfactory [38 42]. The test of whether the alternative construction is realistic is preferred [42]. In the present case, the starting point is that the phrase engaged or concerned or interested, adopted in clause 13.2.3, has long been included in standard precedents for the drafting of non competition covenants and treated as including a shareholding prohibition [51]. Egon Zehnder was unable to advance a realistic alternative construction of the word interested [52]. The natural meaning of the word, which includes a shareholding (large or small), applies [53]. Subject to severance, clause 13.2.3 is thus void as an unreasonable restraint of trade [53]. Issue (3): Correct approach to severance in restraint of trade cases On the question of severance, this Court is faced with two main differing approaches, found in particular in the decisions in Attwood v Lamont [1920] 3 KB 571 (CA) and Beckett Investment Management Group Ltd v Hall [2007] ICR 1539 (CA) [57 73]. The Attwood approach limits severance to situations where the covenant is in effect a combination of different covenants [66]. By contrast, the Beckett approach uses three criteria for severance [73]. This Court prefers the Beckett approach, provides guidance on its application and overrules the decision of the Court of Appeal in Attwood [81 91]. On the Beckett approach, the first criterion is whether the unenforceable provision is capable of being removed without the necessity of adding to or modifying the wording of what remains this is the so called blue pencil test [85]. The second criterion is that the remaining terms continue to be supported by adequate consideration [86]. This will not usually be in dispute [86]. The third criterion is that the removal of the unenforceable provision does not so change the character of the contract that it becomes not the sort of contract that the parties entered into at all [87]. This is the crucial criterion but this Court prefers to express it as being whether removal of the provision would not generate any major change in the overall effect of all the post employment restraints in the contract [87]. It is for the employer to establish this, and the focus is on the legal effect of the restraints and not their perhaps changing significance for the parties [87]. On the facts, the words or interested are capable of being removed from clause 13.2.3 without the need to add to or modify the wording of the rest of the clause and removal of the prohibition against her being interested would not generate any major change in the overall effect of the restraints [88]. |
The appeal concerns the lawfulness of a bus companys policy in relation to the use of the space provided for wheelchair users on its buses. Mr Paulley is a wheelchair user who attempted to board a bus operated by a subsidiary of FirstGroup PLC on 24th February 2012. The bus had a space marked by a wheelchair sign and a notice saying, Please give up this space for a wheelchair user (the Notice). At the time Mr Paulley attempted to board, a woman with a sleeping child in a pushchair occupied this space. She was asked by the driver to fold down the chair and move; however, she refused, stating that it did not fold down. Mr Paulley had to wait for the next bus as a result. Mr Paulley issued proceedings against FirstGroup for unlawful discrimination on the ground of his disability, claiming that FirstGroup had failed to make reasonable adjustments to its policies contrary to section 29(2) of the Equality Act 2010. The Recorder found that FirstGroup operated a provision criterion or practice (PCP) consisting of a policy of first come first served whereby a non wheelchair user occupying the space on the bus would be requested to move, but if the request was refused nothing more would be done. This placed Mr Paulley and other wheelchair users at a substantial disadvantage by comparison with non disabled passengers. There were reasonable adjustments that FirstGroup could have made to eliminate the disadvantage: (i) altering the Notice positively to require non disabled passengers occupying a space to move if a wheelchair user needed it; and (ii) adopting an enforcement policy requiring non disabled passengers to leave the bus if they failed to comply. The Recorder found in favour of Mr Paulley and awarded him 5,500 damages. FirstGroups appeal was unanimously allowed by the Court of Appeal which held that it was not reasonable to hold that FirstGroup should adjust its policy so that its drivers required, rather than requested, non wheelchair users to vacate a space when it was needed by a person in a wheelchair, and then to positively enforce that requirement with the ultimate sanction being removal from the bus. The Supreme Court unanimously allows Mr Paulleys appeal, albeit only to a limited extent. Lord Neuberger gives the lead judgment (with which Lord Reed agrees) allowing the appeal but only to the extent that FirstGroups policy requiring a driver to simply request a non wheelchair user to vacate the space without taking any further steps was unjustified. Where a driver who has made such a request concludes that a refusal is unreasonable, he or she should consider some further step to pressurise the non wheelchair user to vacate the space, depending on the circumstances. Lord Toulson and Lord Sumption write concurring judgments. On the issue of the order to be made, this majority declines to uphold an award of damages. Lady Hale, Lord Kerr and Lord Clarke also allow the appeal but they would have restored the order of the Recorder in full, including upholding the award of damages. Under section 29 of the 2010 Act, as a public service provider, FirstGroup must not discriminate against a person requiring its services by not providing the person with the service, and it must make reasonable adjustments to avoid substantial disadvantage to disabled persons [20 26]. The Recorders judgment effectively required a policy that could lead to a non wheelchair user being ordered off the bus [40 45]. The Court of Appeal was right to reject this. An absolute rule that any non wheelchair user must vacate the space would be unreasonable: there are many circumstances in which it could be unreasonable to expect a non wheelchair user to vacate a space, and even more, to get off the bus, even where the space is needed by a wheelchair user [46 48]. Even a qualified rule (i.e. that any non wheelchair user must vacate if it is reasonable) implemented through mandatory enforcement would be likely to lead to confrontation with other passengers (not least where the non wheelchair user vacating the space affected other travellers) and delay [50 51]. Passengers are not clearly subject to a statutory obligation to comply with a policy relating to the use of the space, and would not appear to be under such an obligation to get off the bus if they fail to do so [52]. Even though the hearing in the Court of Appeal had proceeded on the basis that it was not part of Mr Paulleys case [59], the argument that FirstGroups PCP should have gone further than it did, albeit not as far as the Recorder concluded, has more force. FirstGroup cannot be criticised for choosing not to express the Notice in more forceful terms: it was aimed at politely requiring non wheelchair users to vacate the space; there was evidence that directive notices are a less effective means of communication with the public; and the use of specially emphatic language should not determine legal liability in this case [63]. The suggestion that the Notice should state that priority of wheelchair users would be enforced would be false [64]. However, it was not enough for FirstGroup to instruct its drivers simply to request non wheelchair users to vacate the space and do nothing further if the request was rejected. The approach of the driver must depend upon the circumstances, but where he or she concludes that the refusal is unreasonable, some further step to pressurise the non wheelchair user to move should be considered, such as rephrasing the request as a requirement (especially where the non wheelchair user could move elsewhere in the bus) or even a refusal to drive on for several minutes [67]. Lord Toulson agrees [83 85] adding that fresh legislative consideration is desirable [87]. Lord Sumption also agrees albeit with reservations [92]. So far as damages are concerned, Lord Neuberger (with whom Lords Sumption, Reed and Toulson agree) concludes that the Recorder did not specifically consider whether, if FirstGroup had simply required its drivers to be more forceful, there was a prospect that it would have made a difference in this case. It is therefore not possible to conclude that there would have been a real prospect that such an adjustment would have resulted in Mr Paulley not being placed in the disadvantage that he was, and so an award of damages is not possible [60 61]. Lady Hale, Lord Kerr and Lord Clarke dissent in part. As the Recorder found, it was reasonable to expect bus operators to do more than FirstGroup did [102 109]. His judgment did not necessarily require ejection of a passenger who refused to move from the bus nor did it create an absolute rule [106]; [129 131]; [137]. Had the practice suggested by the claimant been in force, there was at least a real prospect that Mr Paulley would likely have been able to travel [108]; [138]. This being so, it was unjust to deny Mr Paulley damages [109]; [160]. |
Mrs Sandiford is a 57 year old British national. She is currently in prison in Bali, Indonesia, awaiting execution by firing squad following her conviction for drug offences. The issue in this appeal is the legality of the Foreign Secretarys policy of providing consular assistance in such cases, but not funding for legal representation. Following her arrest in May 2012 she had co operated with the police, leading to the arrest and conviction of four others. At her trial she admitted the offences but claimed that she had been coerced by death threats to her son. Following her conviction and sentence in December 2012, she sought financial assistance from the UK government to pay for legal representation to prepare and present her appeal to the High Court in Indonesia. The consulate put her in touch with an experienced local lawyer, who was willing to assist on an expenses only basis. However, they declined to make any financial contribution to her legal costs, relying on their published policy, under which the government was willing to provide consular support and assistance in finding suitable local lawyers, but not to pay for legal representation. She commenced the present proceedings for judicial review challenging the legality of that policy, both on article 6 of the European Convention on Human Rights and the common law. Her claim was rejected by the Divisional Court on 31 January 2013 and her appeal to the Court of Appeal was dismissed on 22 May 2013. In the meantime, the necessary sum for the expenses of her lawyer in Indonesia was raised by donations from the public. Her High Court appeal in Indonesia proceeded with his assistance, and was also supported by an amicus brief by the UK government, but was unsuccessful. She appealed to the Indonesian Supreme Court, again with legal assistance funded by donations, but her appeal was dismissed in August 2013. She now requires a substantial sum to pay for the legal assistance to prepare and present an application to the Indonesian Supreme Court to reopen the case and a clemency petition to the President of Indonesia. The papers require to be lodged by 29 August 2014. The issue in this case is the legality of the governments blanket policy to refuse to pay for legal representation in such cases, and their decision in January 2013 to refuse to make an exception to that policy in her own case. Her claim having failed in the High Court and Court of Appeal, Mrs Sandiford now appeals to the UK Supreme Court. The Supreme Court unanimously dismisses the appeal. However, in the light of new information (not available to the lower courts) as to the course of the proceedings in Indonesia and the steps now available to her there, the court calls on the Secretary of State urgently to review the application of the policy to Mrs Sandifords case in the light of that information. Lord Carnwath and Lord Mance give a joint judgment, with which Lord Clarke and Lord Toulson agree. Lord Sumption gives a concurring judgment. Mrs Sandiford is not within the jurisdiction of the UK for the purposes of article 1 of the European Convention on Human Rights. Jurisdiction under article 1 is primarily territorial, but there are certain recognised exceptions. One exception is in relation to the acts of diplomatic and consular agents which may amount to an exercise of jurisdiction when the agents exert authority and control over others [19]. In this case, it is not possible to identify any relevant acts of diplomatic or consular agents or any relevant exercise of authority or control by such agents over Mrs Sandiford which could bring the exception into play. Refusal to instruct or fund lawyers on behalf of Mrs Sandiford cannot constitute an exercise of authority or control over her [26]. Mrs Sandiford has been apprehended, convicted and tried for drug smuggling in Indonesia, and is under the authority and control of the Indonesian authorities. It is they who have responsibility for be ensuring her fair trial. [32]. Under domestic law, the Secretary of State has power to provide assistance, including legal funding, for British citizens facing capital charges abroad. This power is not derived from statute [49]. Prerogative powers have to be approached on a different basis from statutory powers. There is no necessary implication that a blanket policy is inappropriate, or that there must always be room for exceptions, when a policy is formulated for the exercise of a prerogative power [62]. In any event, on the evidence, the Foreign Office was prepared to consider whether the policy should be modified in the face of the particular circumstances of Mrs Sandifords case [67]. The department responded with urgency to Mrs Sandifords unexpected death sentence, and put Mrs Sandiford in contact with an experienced local lawyer who was willing to conduct the appeal on an expenses only basis. Their reasons for not making an exception to their no funding policy were not irrational. The problem at the appeal was not lack of competent representation but the apparent unwillingness of the court to take any notice of it [72]. The challenge to the decision to refuse funding and to the policy on which it was based therefore fails [73]. Although that disposes of the appeal, Mrs Sandiford remains in jeopardy and urgently in need of legal help. Circumstances have radically developed in unforeseen ways. The evidence now available as to the Indonesian proceedings appear to raise the most serious issues as to the functioning of the local judicial system and its ability to deal with Mrs Sandifords case. The local courts seem to have ignored the substantial mitigating factors in her case, including her age and mental problems, her lack of any previous record, her co operation with the police and the disparity of her sentence with those of the others convicted. This calls for an urgent review of the policy as it applies to Mrs Sandiford in light of the current information [74 75]. |
This appeal concerns the relevance and application of the principles of autrefois acquit, res judicata and abuse of process in the context of successive proceedings before a regulatory or disciplinary tribunal. In particular it concerns the application of the general principle that nemo debet bis vexari pro una et eadem causa, that is that nobody should be vexed twice in respect of one and the same cause. The appellant, Mr Coke Wallis, is a chartered accountant and a member of the respondent Institute of Chartered Accountants in England and Wales (the Institute) which is responsible for the regulation of chartered accountants. Mr Coke Wallis formerly practised in Jersey where he and his wife were directors and shareholders in a number of trust companies carrying out regulated financial services work. In September 2003 Mr Coke Wallis and his wife were convicted in Jersey of failing to comply with a direction of the Jersey Financial Services Commission that no records or files in respect of the companies were to be removed from the offices of the companies, having been caught by police attempting to take via the ferry to St Malo suitcases containing documents and records relating to the companies from the jurisdiction of the Jersey authorities. In November 2004, the Institutes Investigation Committee preferred a complaint (the first complaint) against Mr Coke Wallis, alleging that he was liable to disciplinary action under bye law (4)(1)(a) of the Institutes bye laws, relying on the Jersey conviction. Bye law 4(1)(a) provides that a member was liable to disciplinary action if in the course of carrying out professional work or otherwise he has committed any act or default likely to bring discredit on himself, the Institute or the profession of accountancy. Bye law 7(1) provided that a conviction outside England and Wales of an offence corresponding to one which was indictable in England and Wales was conclusive evidence of an act or default likely to bring discredit on the institute or profession. The first complaint was dismissed by a disciplinary committee (the tribunal) in April 2005 on the basis that the tribunal was not satisfied that the offence of which Mr Coke Wallis was convicted in Jersey corresponded with any indictable offence in England and Wales. In March 2006 the Investigation Committee preferred a second complaint (the second complaint) alleging discreditable conduct, relying on the conduct which had led to Mr Coke Wallis conviction in Jersey. Mr Coke Wallis applied to have the second complaint summarily dismissed on the grounds of autrefois acquit, res judicata or abuse of process, arguing that the first and second complaints made the same allegations and so the same complaint had already been dismissed. After a preliminary hearing the tribunal held that the two complaints did not allege the same thing: the first was based on the fact of the conviction, while the second was based on the underlying conduct. The tribunal dismissed the application. Mr Coke Wallis issued an application for judicial review of that decision. On 6 November 2008 Owen J dismissed the application for judicial review, a decision which was upheld by the Court of Appeal. Mr Coke Wallis appealed to the Supreme Court. The Supreme Court unanimously allowed the appeal and held that the principle of res judicata required that the second complaint be dismissed. The substantive judgment is given by Lord Clarke, with additional judgments from Lord Collins and Lord Dyson. Lord Clarke (with whom all the members of the Court agreed) stated that the two complaints alleged the same breach of bye law 4(1)(a). On the true construction of bye law 7(1) the role of a conviction was only to provide conclusive evidence of a breach of bye law 4(1)(a): [14] [16]. It followed that the conviction was not capable of itself being the act complained of as being a breach of bye law 4(1)(a). In these circumstances the act complained of as being discreditable conduct in the first complaint was not being convicted but failing to comply with the direction of the Jersey Financial Services Commission. That was precisely the same complaint as was advanced in the second complaint: [17] [20], [33]. The principles of res judicata and not those of autrefois convict apply to disciplinary proceedings, which are civil in nature: [22] [24], [27 [32]; [57] [59]. Res judicata is a generic term of which cause of action estoppel and issue estoppel are two species. The distinction between the two species is of potential importance because the former creates an absolute bar whereas the latter does not. In this case Mr Coke Wallis relied upon cause of action estoppel: [25] [26]. There are a number of constituent elements in a case based on cause of action estoppel. They are that: (i) the decision, whether domestic or foreign, was judicial in the relevant sense; (ii) it was in fact pronounced; (ii) the tribunal had jurisdiction over the parties and the subject matter; (iv) the decision was (a) final; (b) on the merits; (v) it determined a question raised in the later litigation; and (vi) the parties are the same. In the instant case it was not in dispute that all those elements were established except (iv) and (v): [34] [35]. As to (iv) and (v), the Court finds that the first decision of the tribunal was both final and on the merits. If the tribunal had held that the Jersey conviction was based on an offence which corresponded to an indictable offence in England and Wales, it would have found the complaint proved because the conviction would have been conclusive evidence of a breach of bye law 4(1)(a). There could have been no doubt that such a decision would have been final and on the merits. The same was true of the decision to dismiss the complaint: [36] [43]. As a general principle, the bar created by a cause of action estoppel is absolute with no exception for special circumstances. There was force in the Institutes submission that a public interest exception to the strict application of the doctrine of cause of action estoppel should be recognised in the disciplinary context where an application of the absolute principle might put the safety of the public at risk. However, whether and in what circumstances to permit such an exception is essentially a matter for Parliament and not for the courts: [45] [51]. This conclusion makes the question of whether the second complaint should be dismissed or stayed on the ground of abuse of process academic and it would not be appropriate for the Court to express an opinion on this issue: [52]. |
The appeal arises out of an application for judicial review of a decision taken by the Scottish Criminal Cases Review Commission (the Commission) under s.194B(1) of the Criminal Procedure (Scotland) Act 1995 (the 1995 Act) not to refer the appellants rape conviction to the High Court of Justiciary. In 2001 the appellant had sexual intercourse with a woman who then reported to the police that she had been raped. The appellant was interviewed by the police, and in accordance with practice and the law as it was understood at the time, he was not offered the option to consult a solicitor before the interview, and no solicitor was present during it. During the interview, he admitted having had sexual intercourse with the complainer, but maintained that it had been consensual. As a result of his admission, semen found on vaginal swabs was not subjected to DNA analysis. At trial, the appellant elected not to give evidence but relied on the interview as setting out his defence of consent. The appellant was convicted and sentenced to 5 years imprisonment. The appellant appealed against his conviction unsuccessfully. His case was also referred by the Commission, again without success. The appellant then applied to the Commission for a second referral of his case. Following the decision of the Supreme Court in Cadder v HM Advocate that article 6 of the European Convention on Human Rights required suspects to be permitted access to legal advice prior to and during interrogation by the police the appellant also sought to have his case referred on that basis. The Commission declined to make a reference on any of the grounds advanced. In relation to the Cadder ground, the Commission considered that since the Crown had relied upon the appellants admission that sexual intercourse had occurred as corroboration of the complainers evidence in that regard, and no other correlative evidence existed, there might have been a miscarriage of justice. However, the Commission did not believe it was in the interests of justice that a reference should be made, given the time that had passed since conviction, and that the appellant did not dispute the veracity of the interview or the fairness of the manner in which it had been conducted, and had relied on it at trial. The grounds for a reference set out in s.194C(1) were therefore not met. The appellant applied for judicial review of the Commissions decision. That application was refused by the Lord Ordinary and the ruling was upheld by the Extra Division. The appellant appealed to the Supreme Court. The Supreme Court unanimously dismisses Mr Gordons appeal. Lord Reed gives the judgment, with which the rest of the Court agrees. The Extra Division and the Lord Ordinary were correct to conclude that the Commission did not err in law in any of the ways suggested by the appellant. The Commission was right to take into account the fact that the appellant had not disputed the veracity of what he had told the police in the interview. The fact that the evidence in question was and remains undisputed is plainly relevant to whether it is in the interests of justice to make a reference. It would not normally be in the interests of justice to quash a conviction merely because, under the law as now understood, there was a lack of admissible corroboration of a fact which had never been in dispute. While it is a relevant consideration that if the appellant had been offered the opportunity to consult a solicitor, matters might have taken a different course, and the interview might not have provided the necessary corroboration that sexual intercourse had occurred, it is also relevant that it was because of the answers given at interview, and the admissibility of those answers under the law at the time, that the semen found on the swabs were not submitted to examination, so as potentially to provide other corroborative evidence. These considerations do not however detract from the relevance of the fact that the truth of what was said at interview was and remains undisputed. [37 39] The Commission was also correct to take into account the fact that the appellant had not challenged the fairness of the way in which the interview had been conducted or its use at the trial. Prior to Cadder there were well established grounds of objection on which the appellant could have relied in the event of unfairness in the conduct of the interview or the use made of it at the trial, and his failure to do so was plainly relevant to where the interests of justice lay. [40] It was also a relevant consideration that the appellant had relied on the interview in order to present his defence to the jury. The appellants argument was that this course of action was forced upon him. Although the appellants admission that sexual intercourse had taken place was admissible under the law as it then stood, he was entitled to have the whole of the interview placed before the jury so that they were aware that the admission was made in the context of his contention that the sexual intercourse had been consensual. The result was that, although the appellant was entitled to give evidence in his own defence, he did not have to do so in order for his defence to be placed before the jury. He could therefore avoid exposing his defence to cross examination. That afforded him an opportunity which would not have existed if the interview had been inadmissible. In the event, he availed himself of that opportunity. [41] The Commissions approach to the interests of justice test in s.194C of the Act was not inconsistent with the application in the case law of the corresponding test in s.194DA, which applied to the High Court. The High Court has not treated its decision under s.194DA as identical to that of the Commission under s.194C; although the power to refer is couched in the same language, the role of each body is different. Further, the authorities relied on by the appellant in any event concerned different circumstances. [42 50] |
The issue in this appeal is whether as a matter of European Union law the United Kingdom may impose a requirement of residence in Great Britain as a condition of entitlement to disability living allowance (DLA). Mrs Tolley, had worked in the UK, paying national insurance contributions, from 1967 to 1984, with some further contributions up to 1993/94. From 1993 she was awarded the care component of DLA on an indefinite basis, because she was unable to prepare a cooked main meal for herself. She moved permanently to Spain in November 2002. The Secretary of State for Work and Pensions decided that she was no longer entitled to DLA by reason of s 71(6) Social Security Contributions and Benefits Act 1992 and the regulations thereunder, which required her to be resident in Great Britain. Mrs Tolley appealed against this decision on the basis that UK domestic law was incompatible with the EU law laid down in Council Regulation (EC) No 1408/71 (the Regulation). The Regulation provides that certain benefits (including those categorised as an invalidity benefit) are fully portable within the EU. The care component of DLA has, however, been categorised in a number of EU cases as a cash sickness benefit. Mrs Tolleys entitlement to receive it when she no longer resided in the UK depended on whether she was an employed person for the purposes of the Chapter 1 of Title III of the Regulation. The meaning of employed person in article 1 of the Regulation has been broadly defined by the Court of Justice of the European Union (CJEU) in cases involving other benefits as extending to anyone who is insured under a social security scheme irrespective of the existence of an employment relationship. Within Title III, the rights of unemployed persons to export sickness benefits are severely limited. Mrs Tolley argued that she was an employed person as she was insured by reason of her national insurance contributions against the risk of old age under UK legislation. Alternatively, she remained subject to the legislation of the UK for the purposes of article 13, which lays down the general rule that a person should only be subject to the legislation of a single member state. The Secretary of State argued that Mrs Tolley could not be an employed person for the purpose of the specific provisions of Chapter 1 of Title III, or that she fell within article 13(2)(f) because the legislation of the UK had ceased to be applicable to her, and she had therefore become subject to the legislation of Spain. Mrs Tolleys appeal was allowed by the First tier Tribunal. She died shortly afterwards and her husband was appointed to continue the proceedings in her place. The Secretary of State appealed against the First tier Tribunals decision but his appeal was rejected by the Upper Tribunal and by the Court of Appeal. He now appeals to the Supreme Court. The Supreme Court is obliged to refer questions of EU law to the CJEU if the application of the Regulation in the circumstances of this case is not clear. The Supreme Court unanimously decides to refer three questions to the CJEU. The terms of the reference are set out by Lady Hale. In the view of the court, the principled solution to the case would be to treat the care component of DLA as an invalidity benefit for the purpose of the Regulation. Unlike sickness benefits, DLA is not intended to be paid on a short term basis and is more akin to invalidity and old age benefits. This would have avoided the issues which had arisen in this case [7, 24]. However, if DLA remains to be treated as a sickness benefit, none of the cases relied on by Mrs Tolley address the question of whether, in the light of the specific provisions of Title III relating to unemployed persons, the broad definition of employed persons under article 1 should apply [25]. It is also unclear how article 13 (and the special procedures for implementing the legislation of the UK in annex VI) apply when a person remains subject only to the legislation of a member state relating to a particular benefit, in this case potential entitlement to a state retirement pension. The questions referred are therefore as follows [27]: 1. 2. 3. Is the care component of the United Kingdoms Disability Living Allowance properly classified as an invalidity rather than a cash sickness benefit for the purpose of Regulation No 1408/71? (i) Does a person who ceases to be entitled to UK Disability Living Allowance as a matter of UK domestic law, because she has moved to live in another member state, and who has ceased all occupational activity before such move, but remains insured against old age under the UK social security system, cease to be subject to the legislation of the UK for the purpose of article 13(2)(f) of Regulation No 1408/71? (ii) Does such a person in any event remain subject to the legislation of the UK in the light of Point 19(c) of the United Kingdoms annex VI to the Regulation? (iii) If she has ceased to be subject to the legislation of the UK within the meaning of article 13(2)(f), is the UK obliged or merely permitted by virtue of Point 20 of annex VI to apply the provisions of Chapter 1 of Title III to the Regulation to her? (i) Does the broad definition of an employed person in Dodl and Oberhollenzer [2005] ECR I 5065 apply for the purposes of articles 19 to 22 of the Regulation, where the person has ceased all occupational activity before moving to another member state, notwithstanding the distinction drawn in Chapter 1 of Title III between, on the one hand, employed and self employed persons and, on the other hand, unemployed persons? (ii) If it does apply, is such a person entitled to export the benefit by virtue of either article 19 or article 22? Does article 22(1)(b) operate to prevent a claimants entitlement to the care component of DLA being defeated by a residence requirement imposed by national legislation on a transfer of residence to another member state? |
The Chagos Islands are otherwise known as the British Indian Ocean Territory (BIOT). In 1962 they had a settled population of 1,000. In 1966 the UK Government agreed to allow the USA to use the largest of the Chagos Islands, Diego Garcia, as a military base. Pursuant to this arrangement, the Commissioner for BIOT made the Immigration Ordinance 1971 (the Ordinance). Section 4 of the Ordinance made it unlawful for a person to be in the BIOT without a permit and empowered the Commissioner to make an order directing that persons removal. Between 1968 and 1973 the UK Government procured the removal and resettlement of the Chagossians by various non forceful means. In 2000 the appellant, Mr Bancoult, obtained a High Court order quashing section 4 of the Ordinance. The then Foreign Secretary announced that he accepted this decision, such that the prohibition on the resettlement of BIOT was lifted. He also announced that work on the second stage of a feasibility study into the resettlement of the former inhabitants would continue. The second stage of the feasibility study was published in 2002. Part B (the 2B report) concluded that the costs of long term inhabitation of the outer islands would be prohibitive and life there precarious. In 2004 Her Majesty by Order in Council made the BIOT Constitution Order (the 2004 Order) which introduced a new prohibition on residence or presence in BIOT. In 2008, the appellants challenge to the 2004 Order by judicial review was dismissed by a majority of 3 (Lord Hoffmann, Lord Rodger and Lord Carswell) to 2 (Lord Bingham and Lord Mance) in the House of Lords (R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 2) [2008] UKHL 61) (the 2008 judgment). In separate litigation concerning the Governments declaration of a Marine Protected Area (MPA) around BIOT, the respondent in 2012 disclosed certain documents relating to the drafting of the 2B report (the Rashid documents). The appellant seeks to set aside the 2008 Decision on the grounds that (i) the Rashid documents cast doubt on the reliability of the 2B report and should, pursuant to the respondents duty of candour in public law proceedings, have been disclosed prior to the 2008 judgment, and (ii) four heads of new evidence have come to light, constituting independent justification for setting aside the 2008 judgment. In 2014 15 a new feasibility study concluded that, assuming for the first time possible re settlement of Diego Garcia itself, scope existed for supported resettlement of BIOT (the 2014 15 study). The Supreme Court dismisses the appeal by a majority of 3 to 2. Lord Mance gives the majority judgment, with which Lord Neuberger agrees. Lord Clarke gives a separate judgment, concurring with Lord Mance. Lord Kerr gives a dissenting judgment, with which Lady Hale agrees in a separate dissent. The Supreme Court has inherent jurisdiction to correct injustice caused by an unfair procedure which leads to an earlier judgment or is revealed by the discovery of fresh evidence, although a judgment cannot be set aside just because it is thought to have been wrong on points unrelated to such procedure or evidence [5, 154, 190]. The authorities indicate as the threshold for setting aside a previous judgment whether a significant injustice has probably occurred in case of non disclosure or whether there is a powerful probability of significant injustice in case of fresh evidence. But Lord Mance leaves open the possibility of the egregiousness of the procedural breach and/or the difficulty of assessing its consequences militating in favour of a lower threshold, and considers the application on that basis too [8]. An applicant must also show that there is no alternative effective remedy [6]. As to the non disclosure, the essential questions are (i) whether due disclosure of the Rashid documents would have led to a challenge by Mr Bancoults representatives to the 2B report in the original judicial review proceedings, and, if so, (ii) whether it is likely that such a challenge would have resulted in a different outcome to the 2008 judgment [61]. Assuming without deciding that (i) was satisfied, Lord Mance concludes as to (ii), after reviewing the 2008 judgment [16 19] and the Rashid documents [20 64], that there is no probability, likelihood, prospect or real possibility that a court would have seen, or would now see, anything which could, would or should have caused the respondent to doubt the conclusions of the 2B report, or made it irrational or otherwise unjustifiable to act on them in June 2004 [65]. As to the alleged new evidence, the first head consists essentially of analysis and submissions which the majority takes into account, the second and third heads consist of material outside the respondents knowledge at the relevant times and neither they nor the fourth provide any basis for setting aside the 2008 judgment [66 71]. Even if the threshold for setting aside were crossed, circumstances have changed in the light of the 2014 15 study and/or governmental confirmation that the MPA does not preclude resettlement [72 75]. It is now open to any Chagossian to mount a fresh challenge to the failure to abrogate the 2004 orders in the light of the 2014 15 studys findings, as an alternative to further lengthy litigation and quite possibly a fresh first instance hearing about the factually superseded 2B report. [72 76, 78 79]. Lord Kerr, with whom Lady Hale agrees, would have set aside the 2008 Decision. Although the appellant accepted that it must be shown that the non disclosure probably had, or may well have had, a decisive effect on the outcome [155], Lord Kerr would have held that it is enough for there to be a real possibility that a different outcome would have occurred had the information been available at the time of the original hearing [160 163]. The Rashid documents might well have caused the 2008 Decision to be different [168, 193]. Lord Kerr disagrees with the majority that the conclusions of the 2014 2015 feasibility study render the present application moot. The mere possibility that the Chagossians might be allowed to resettle is insufficient. It would be necessary to demonstrate that they would achieve the same result as would accrue on the successful re opening of the appeal [179]. Moreover, there is no question of pragmatic justice being done here as the Supreme Court in this appeal is unable to vindicate the appellants right to resettle in the BIOT [180]. |
This case concerns the circumstances in which a highway authority is required to pay compensation for the erection of barriers preventing a property owner accessing a public highway from his or her property. Mr Cusack is a solicitor who has practised from a property on a main road in Harrow since 1969. The property was originally built as a dwelling and had a garden at the front adjoining a footpath which runs alongside the road. In 1973, Mr Cusack obtained temporary planning permission to use the ground floor of the property as offices until August 1976. That use of the property continued and is now to be regarded as lawful (by virtue of section 191(2) of the Town and Country Planning Act 1990). At an unknown date, the garden at the front of the property was turned into a forecourt for use as a car park for members of staff and clients. In order to enter and leave the forecourt, cars are required to cross the footpath. In January 2009, Harrow London Borough Council, the relevant highway authority, informed Mr Cusack that the movement of vehicles across the footpath was a danger to pedestrians and other motorists. Mr Cusack was told that the council intended to erect barriers in front of his property and several neighbouring properties in order to prevent cars driving over the footpath. Mr Cusack began proceedings seeking an injunction restraining the council from erecting the barriers. A county court judge refused to grant the injunction, holding that the council had power to erect the barriers under section 80 of the Highways Act 1980, which permits a highway authority in certain circumstances to erect and maintain fences or posts for the purpose of preventing access to a public highway. The Court of Appeal held that section 80 was not applicable because the council had power to erect the barriers under section 66(2) of the 1980 Act, which empowers a highway authority to erect and maintain walls, rails, fences etc. if necessary for the purpose of safeguarding persons using the highway and (unlike section 80) would require compensation to be paid to Mr Cusack. The council appealed to the Supreme Court. Mr Cusack accepts that the council has power to erect the barriers, but maintains that appropriate compensation must be paid. No barriers have yet been erected in front of Mr Cusacks property. The Supreme Court unanimously allows the councils appeal. Lord Carnwath gives the leading judgment. The owner of a property adjoining a highway has a common law right of access to the highway, without restriction, from any part of his or her property. However, that right has been greatly limited by statutory provisions and there is no general right to compensation when action is taken to restrict a property owners right of access to an adjoining highway [4]. Canons of statutory construction, including the principle that a specific statutory provision excludes the application of an inconsistent and more general statutory provision, have a valuable role to play as guidelines embodying logic or common sense [57,60]. However, the distinction between general and specific statutory provisions is of no assistance in this case because neither section 66(2) nor section 80 of the 1980 Act can be regarded as more specific or less general then the other. The power conferred by section 66(2) must be used for a specific purpose (safeguarding persons using the highway) but, unlike section 80, it is not confined to preventing access to a highway [12, 61]. The 1980 Act is a consolidating statute and is the result of a complex history extending over more than 130 years. It contains a variety of overlapping and sometimes inconsistent powers [19, 64]. The council is entitled to rely on the clear wording of section 80 in order to erect barriers in front of Mr Cusacks property. It does not matter that the council could use section 66(2) to achieve the same objective. However, a highway authoritys use of section 80 could be challenged if, for example, it circumvented the specific prohibitions of the use of the power conferred by section 66(2) [27]. The Human Rights Act 1998 does not preclude the council from relying on section 80 because it involves no breach of Mr Cusacks right to peaceful enjoyment of his property under article 1 of the First Protocol to the ECHR (A1P1): o The erection of barriers in front of Mr Cusacks property would be a control of the use of property, not a deprivation of property [37, 66]. o This case concerns land development and town planning, in relation to which the state enjoys a wide margin of appreciation [44]. o The issue of the proportionality of the interference with Mr Cusacks rights under A1P1 requires a broad judgment as to where a fair balance lies between competing general and individual interests; the issue is not merely whether the council has abused its powers. Although there is no general right to compensation under A1P1, the absence of compensation is relevant to the proportionality of any interference with the rights guaranteed by A1P1 [42 44]. o There has been no challenge by Mr Cusack to the compatibility of section 80 with A1P1 as such. The mere fact that another statutory route is available to the council and that it requires the payment of compensation to Mr Cusack does not itself lead to the conclusion that the councils reliance on section 80 is disproportionate. There is no general rule under A1P1 that, where the state seeks to control the use of property and could do so under two different provisions which have different consequences in terms of compensation, it is obliged to use the provision which carries some (or greater) compensation [45, 69]. o A use of property that is immune from planning enforcement measures, and is therefore to be regarded as lawful under section 191(2) of the Town and Country Planning Act 1990, is not to be treated for all purposes as being the subject of a deemed planning permission. Mr Cusacks use of the vehicular access to his property via the footpath is, therefore, different from the use of a means of access that is authorised by planning permission (and which, by virtue of section 80(3)(c), could not be obstructed by the use of the power conferred by section 80) [49, 68]. |
Mr Mamdouh Ismail, the Respondent, is an Egyptian national who was chairman of the board of the El Salam Maritime Transportation Company. On 3 February 2006, a ferry operated by the company sank in the Red Sea and more than 1000 people lost their lives. Mr Ismail and his son, who was a director and vice chairman of the company, were charged with manslaughter. A trial took place at which neither defendant was present, though they were legally represented. Both were acquitted. The prosecution appealed and, again, Mr Ismail and his son were not present but were legally represented. The sons acquittal was affirmed but, on 11 March 2009, Mr Ismail was found guilty and was sentenced to the maximum sentence of seven years with hard labour. Mr Ismail had entered the United Kingdom on 26 April 2006, and has remained here ever since. On 11 October 2010, the Egyptian authorities requested that the Secretary of State serve the judgment of the Appeal Court in Mr Ismail. On 3 August 2011, the Secretary of State informed Mr Ismail that she intended to do so. In a letter before claim dated 18 August 2011, Mr Ismails solicitors submitted that the Secretary of State would be acting unlawfully if she served the judgment. Further representations were made on Mr Ismails behalf between August 2011 and January 2012. In response to these, the Secretary of State made inquiries with Egyptian authorities as to the effect that service of the judgment would have on Mr Ismail. She was informed that the Appeal Court judgment could be appealed by means of an objection made by a lawyer acting on Mr Ismails behalf within 10 days of service of the judgment; otherwise, the judgment would become final but could still be appealed to the Court of Cassation if Mr Ismail appeared in person. On 23 May 2012, the Secretary of State informed Mr Ismails solicitors that she intended to serve the judgment on him. On 20 June 2012 a claim for permission to apply for judicial review of that decision was made in the English courts. Following a hearing on 12 February 2013, permission was granted and, by a judgment of 26 March 2013 the High Court granted Mr Ismails application for judicial review. It certified two points of law of general public importance, which are pursued on this appeal: 1. What is the extent of the Secretary of States discretion when serving a foreign judgment under section 1 of the Crime (International Cooperation) Act 2003? 2. May a persons ECHR article 6 rights be engaged on service by the Secretary of State of a foreign judgment under section 1 of the Crime (International Co operation) Act 2003? The Supreme Court unanimously allows the Secretary of States appeal and dismisses the application for judicial review of the Secretary of States decision. Lord Kerr gives the only judgment. The Secretary of State contended that service of a foreign judgment could not engage article 6 because (1) it does not have the direct consequence of exposing the individual to a breach of any fair trial guarantee and (2) the consequences of service are not of a type or nature to warrant the engagement of article 6 rights [13]. Further, the Secretary of State submitted that it was not incumbent on her to investigate the fairness of proceedings in a foreign state when she was asked to serve a judgment: that would run counter to the purpose of the 2003 Act which was to provide speedy and effective procedural assistance to other sovereign states [15]. For Mr Ismail, it was submitted that there is a clear discretion in the 2003 Act; that the Secretary of State is required to carefully assess the respondents representations on article 6 when plausible evidence of unfairness in the Egyptian trial was provided to her; and that service is more than a merely administrative act [18, 20]. From a purely textual perspective, the wording of the statute suggests an administrative procedure that does not routinely require examination of the proceedings which prompted the request for service [23]. On the other hand, the Act provides a power and not an obligation to effect service of foreign process and it was therefore contemplated that there would be circumstances in which service would not be appropriate [26]. It is well settled that a person physically present in a country which has acceded to the ECHR is entitled to its protection, even in circumstances where the actions of a member state would expose them to consequences in a non contracting foreign state which would amount to a violation of Convention rights [32]. That, however, is not the context of this case because the decision of the Secretary of State to serve the judgment on Mr Ismail did not expose him to a risk of violation of his Convention rights [36]. Service of the judgment would have undoubtedly placed Mr Ismail in a dilemma whether to return to Egypt to appeal the judgment, or suffer the consequences of the judgment becoming final but having to face that dilemma does not amount to a possible violation of his article 6 rights [36]. Service of the Egyptian judgment does not have a direct consequence of exposing Mr Ismail to proscribed ill treatment. It reduces his options but does not carry the inevitable outcome of exposure to a violation of his rights. He could avoid that exposure by remaining in the UK [38]. Service of a judgment is not the same as enforcement of it because it does not give legal force to the judgment or ratify it [41]. Service does not, therefore, alter the legal position of the person on whom it is served. It may narrow the legal options available to him but his essential legal position remains unchanged [42]. Service of the judgment would not involve an exercise of the UKs sovereignty nor would it engage Mr Ismails fundamental rights. Indeed, in the particular circumstances of this case, it would have no material impact on Mr Ismail at all [48]. The Secretary of State was under no obligation to investigate further the consequences that would accrue to Mr Ismail on service of the judgment [52]. That being said, there may be cases in which service of a judgment would engage article 6 or would call for further investigation of the basis on which the judgment had been obtained. That might occur, for instance, where service would lead more directly to enforcement or have other material consequences on the individual. In certain cases service of a foreign judgment might engage article 6. This is not such a case [53]. |
Scottish Widows Plc (Scottish Widows) is a life assurance company. It was established in 2000, when it acquired the business of Scottish Widows Fund and Life Assurance Society (the Society) under a scheme of transfer which had been approved by the Court of Session in Scotland. Scottish Widows acquired assets under the scheme which had an approximate value of 25bn, and it became subject to actuarial liabilities of approximately 19bn. Members of the Society received compensation of approximately 5.8bn, which represented the surplus of the Societys assets over its liabilities at the time of the transfer. The compensation was paid by Scottish Widows holding company, in return for the members of the Society giving up their right to participate in the surplus. The scheme provided that Scottish Widows was to establish and maintain a Long Term Business Fund (LTBF) to fund its long term insurance business. It also provided that there was to be a memorandum account within the LTBF, called the Capital Reserve. This was said to represent the value of shareholders capital within the LTBF. Life assurance companies are required to submit annual regulatory returns, in particular to demonstrate solvency. Various forms are prescribed for these returns. One these is known as Form 40, which is a revenue account in respect of the LTBF. In the years following transfer the value of the assets of Scottish Widows LTBF fell substantially, principally because of falls in the stock markets. To cover those losses and to allow for distributions to policyholders, Scottish Widows brought into account amounts on Form 40 for each of the accounting periods 2000, 2001 and 2002. These amounts were recorded in line 15 of the relevant Form 40s. They were described as transfers from the Capital Reserve. Section 83 Finance Act 1989 provides for certain sums to be brought into account in the computation of the profits of an insurance company in respect of its life assurance business for the purposes of corporation tax. In the terms that were in force between 2000 and 2003 section 83(2) provided that: [T]he following items, as brought into account for the period of account (and not otherwise), shall be taken into account as receipts of the period (a) the companys investment income from the assets of its long term business fund, and (b) any increase in value (whether realised or not) of those assets. Section 83(3)(a) made provision for ascertaining whether or to what extent a company had incurred a loss in respect of its life assurance business where an amount was added to an insurance companys long term business fund as part of or in connection with a transfer of business to that company. The Revenue maintained that the amounts to be brought into account as receipts for the computation of profits or losses for tax purposes under section 83(2)(b) or, in the alternative, under section 83(3)(a) were the amounts shown in line 15 on Form 40. It maintained that the reference to a difference in value as brought into account directed attention to the figures that had been entered on Form 40, not the market value of the assets of the LTBF. Scottish Widows argued that the words increase in value in section 83(2)(b) meant an increase in the actual value of actual assets, and that the words as brought into account were concerned with when the increase was brought into account, not the extent of the increase. Here the value of the assets of the LTBF had fallen during each of the relevant periods. So there was no increase which could be brought into account. The parties referred the question whether, in computing the Case I profit or loss of Scottish Widows for the accounting periods ending in 2000, 2001 and 2002, the amounts that fell to be taken into account as receipts to the Special Commissioners were the amounts shown in line 15 of Form 40. It was agreed that, if Scottish Widows argument that it is actual values and not those amounts that should be taken into account is correct, it will have allowable losses in respect of those years of 28.7m, 612.6m and 431.3m. The Special Commissioners answered the question in the affirmative. They held that, although the amounts shown on Form 40 were not to be brought into account by section 83(2), they were covered by section 83(3)(a). The Inner House unanimously dismissed the Revenues appeal against the decision on section 83(2) and by majority (Lord Emslie dissenting) dismissed Scottish Widows cross appeal against the decision in respect of section 83(3)(a). Scottish Widows appealed and the Revenue cross appealed. The Supreme Court unanimously allows the Revenues cross appeal and holds that the amounts that were to be taken into account as receipts by virtue of section 83(2) were the amounts shown on Form 40. It therefore answers the question that was referred to the Special Commissioners in the affirmative. Lord Hope and Lord Walker both give detailed judgments. Lady Hale and Lord Neuberger give shorter judgments, agreeing with each other and with Lord Hope and Lord Walker. Lord Clarke agrees with all of the judgments. Although the applicable statutory provisions had been amended on various occasions, it was not helpful to look at their legislative history. That should only be done where there is an interpretative difficulty which classical methods of construction cannot solve. The proper approach was to concentrate on the wording of sections 83(2) and (3)(a) as they were during the relevant accounting periods: [15], [73], [122] [124]. Lord Walker analyses in detail the regulatory and taxation regime which applies to life assurance companies and the particular features of the demutualisation scheme so as to provide a backdrop to the statutory construction: [40] [71]. There were two particularly important points. One was that when completing regulatory returns, book values could be used, and that an insurer enjoyed a certain freedom in determining what amount of its actuarial surplus to recognise in its returns: [82] [86]. It was also particularly important to appreciate the nature of the Capital Reserve. It was not a fund of particular assets, separate from the LTBF, but was merely an accounting category recording an initial value within the LTBF: [87] [91] [101]. The key to interpreting section 83(2) was the phrase as brought into account and, in particular, the use of the word as: [22], [76], [116], [125]. This demonstrated that the computation must proceed on basis of what was actually entered on the appropriate regulatory account, in this case the form known as Form 40. It was important that, when completing its returns, an insurance company should be permitted to use book values: [20]. The various arguments which were advanced in favour of Scottish Widows construction, based on general principles of interpreting tax legislation ([24] [26], [101] [102]), the statutory scheme and specific aspects of the drafting ([23], [107] [112]), fell to be rejected in the face of this clear statutory language. The Special Commissioners and, to some extent, the Court of Session had attached too much weight to the label Capital Reserve, which had led them to attach undue weight to the notion that capital gains ought not to be taxed under Schedule D, Case I: [26], [101]. Given that the Court allows the Revenues cross appeal, a majority preferred to express no view on section 83(3)(a). Lord Hope indicated that, had it been necessary to decide the point, he would have held in agreement with the majority in the Inner House that the relevant amounts would have been covered by section 83(3)(a): [28] [31]. |
This case is about the relationship between (a) the adjudication regime for building disputes and (b) a rule of insolvency law called insolvency set off. Adjudication was introduced by Parliament in 1996 to help resolve disputes in the building industry. Parties to a construction contract have the right to refer their disputes to an independent adjudicator for a quick decision. The adjudicators decision is binding unless and until it is successfully challenged in court. In the meantime, the losing party must comply with the adjudicators decision a principle known as pay now, argue later which is designed to stop financial disputes from holding up the projects cash flow. Insolvency set off means that, when a company enters liquidation and there are mutual debts between the company and one of its creditors, the debts in each direction automatically cancel each other out. This leaves a single net balance owed in one direction. The liquidator of the company will calculate the balance and decide how much the company owes or is owed overall. The facts of the case Bresco and Lonsdale are electrical contractors. In 2014 Bresco carried out installation work for Lonsdale on a construction site at 6 St Jamess Square, London SW1. In 2016 Bresco entered insolvent liquidation. Both parties claimed they were owed money by the other. Lonsdale said Bresco had abandoned the project prematurely, forcing them to pay 325,000 for replacement contractors. Bresco said Lonsdale had never paid for some work Bresco had done, so Lonsdale owed 219,000 in unpaid fees plus damages for lost profits. In 2018 Brescos liquidators took steps to refer their 219,000 claim to an adjudicator. Lonsdale objected to the adjudication. They said Brescos claim (if any) and Lonsdales cross claim had cancelled each other out by the process of insolvency set off. This meant there was no longer any claim, or therefore any dispute under the contract, so adjudication was unavailable (the jurisdiction point). In any case the adjudicators decision would not be enforced until the liquidator calculated the net balance. So an adjudication was pointless (the futility point). Mr Justice Fraser accepted both Lonsdales points and granted an injunction to stop the adjudication. Following an appeal by Bresco, the Court of Appeal rejected the jurisdiction point but upheld the injunction on the basis of the futility point. Bresco appealed again to the Supreme Court. Lonsdale cross appealed on the jurisdiction point. The Supreme Court unanimously allows the appeal and dismisses Lonsdales cross appeal, with the result that the adjudication can go ahead. Lord Briggs gives the only judgment. (1) The jurisdiction point The Supreme Court concludes that the adjudicator does have jurisdiction. The insolvency set off between Brescos claim and Lonsdales cross claim does not mean that there is no longer a dispute under the construction contract, or that the claims have simply melted away [47]. The claims maintained their separate identity for many purposes [29]. Despite insolvency set off, Bresco could have brought court proceedings to determine the value of its claim, or exercised a contractual right to go to arbitration [50 51]. It follows that Bresco could also refer its claim to adjudication [52]. (2) The futility point The Court of Appeal thought there was a basic incompatibility between adjudication and insolvency set off. If the adjudicator found in favour of Bresco, the courts would refuse to enforce the award because it would interfere with the insolvency process. The adjudication would not promote the goal of pay now, argue later: it was futile and a waste of resources [54 56]. The Supreme Court rejects that view [58]. Bresco has a statutory and contractual right to adjudication. It would ordinarily be inappropriate for the court to interfere with the exercise of that statutory and contractual right [59]. Maintaining cash flow is not the only purpose of adjudication under the 1996 Act. Adjudication was designed to be a method of alternative dispute resolution (ADR) in its own right. In reality most decisions of an adjudicator are never challenged in court and they lead to a speedy, cost effective and final resolution of the dispute [13 15]. Here an adjudication will be a simple, proportionate method for Brescos liquidators to determine the net balance [60 62]. It is possible that the courts will not grant summary enforcement of the adjudicators decision due to the insolvency process, but that does not deprive the adjudication of its potential usefulness to the liquidators [64 67]. |
The issue in this appeal is whether the appellant retained her right to reside in the United Kingdom as a worker pursuant to Article 7 of Directive 2004/38/EC (the Directive) during the period when she temporarily ceased to be employed by reason of the late stages of her pregnancy and early aftermath of childbirth. The appellant is a Frenchwoman who came to the UK in 2006. She worked in various jobs, mostly as a teaching assistant, enjoying the right of residence as a worker conferred by Article 7 of the Directive. By 12 March 2008 she was six months pregnant and she ceased taking agency positions working in nursery schools because the demands of this work were too strenuous. After a short period looking for lighter work she made a claim for income support on the advice of her doctor. It was refused by the respondent on the basis that she no longer held the status of worker, and was therefore a person from abroad who did not qualify for the benefit. Had she retained her right to reside as a worker under the Directive, she would have been entitled to income support under UK domestic law, which does not require a pregnant woman within 11 weeks of her expected date of confinement and for 15 weeks after the birth to be available for work. The appellants baby was born on 21 May 2008 and she returned to work three months later. Under Article 7(3) of the Directive, an EU citizen who is no longer working retains the status of worker in certain specified circumstances, including illness or accident, but these circumstances do not include ceasing to work by reason of late pregnancy or the immediate aftermath of childbirth. The appellant argued that under EU law a broad interpretation was given to the term worker, which did not necessarily depend on the actual or continuing existence of an employment relationship, and that it would be a substantial deterrent to the free movement of female workers, and amount to direct discrimination on grounds of sex, if they lost the right to reside around the time of giving birth. The respondent asserted, however, that Article 7 was intended to be a codification of the existing EU law on workers and women in the appellants position fell outside it. Any discrimination was on grounds of nationality, was indirect and was justified. The appellants appeals against the respondents refusal of income support were dismissed by the Upper Tribunal and the Court of Appeal. An appeal was made to the Supreme Court. The Supreme Court is obliged to refer questions of EU law to the Court of Justice for the European Union (the CJEU) if the application of the Directive in the circumstances of this case is not clear. The Supreme Court unanimously decides to refer two questions to the CJEU. The terms of the reference are set out by Lady Hale. The Supreme Court is not persuaded that the case of either appellant or respondent is clearly right and is therefore under a duty to refer the questions in issue to the CJEU. It considers it likely that the Directive codified the law as it then stood but that did not necessarily preclude further elaboration of the concept of worker to fit situations which had not been envisaged. Pregnancy and the immediate aftermath of childbirth (as opposed to leaving the workplace to look after children) are a special case, affecting only women, who will suffer comparative disadvantage in the workplace unless special account is taken of them. Equal treatment of men and women is one of the fundamental general principles of EU law and may lead to the development of the concept of worker by the CJEU to meet this particular situation. The following questions are therefore referred to the CJEU: 1. 2. Is the right of residence conferred upon a worker in Article 7 of the Citizenship Directive to be interpreted as applying only to those (i) in an existing employment relationship, (ii) (at least in some circumstances) seeking work, or (iii) covered by the extensions in Article 7(3), or is the Article to be interpreted as not precluding the recognition of further persons who remain workers for this purpose? (i) If the latter, does it extend to a woman who reasonably gives up work, or seeking work, because of the physical constraints of the late stages of pregnancy (and the aftermath of childbirth)? (ii) If so, is she entitled to the benefit of the national laws definition of when it is reasonable for her to do so? |
This appeal concerns the procedure for collective proceedings in competition damages claims. This is the first collective proceedings case of this kind to reach the Supreme Court. It addresses important questions about the correct legal requirements for certification of a claim. Mr Merricks claim arises out of the European Commissions decision in December 2007 that the appellants (Mastercard) breached competition law by fixing a default interchange fee as part of their payment card schemes between May 1992 and December 2007 (the Commission Decision). These payment card schemes allow consumers to purchase goods and services from retailers by card. The details of the scheme are at [6 8] and they were also considered by the Supreme Court earlier this year ([2020] UKSC 24). Mr Merricks issued a collective proceedings claim form against Mastercard under section 47B(1) of the Competition Act 1998 as amended (the Act). In the claim form, Mr Merricks argues that the difference between the interchange fee banks would have paid but for Mastercards breach of competition law, and the interchange fee that they did in fact pay, is an overcharge which retailers paid to their banks and crucially, which retailers then passed onto their customers. As a result, he argues that consumers paid higher prices for goods and services than they would otherwise have done. Mr Merricks seeks to bring the collective proceedings as the class representative on behalf of all UK resident adult consumers of goods and services purchased in the UK during the infringement period from retailers accepting Mastercard, unless the consumer opts out (the class). He seeks an award of damages for the whole class (an aggregate award), rather than damages for the claim of each class member [11 13]. To proceed with his collective proceedings claim, Mr Merricks needs the Competition Appeal Tribunal (the CAT) to certify the claim by making a Collective Proceedings Order (CPO) under section 47B of the Act. To certify a claim, the CAT must be satisfied that two main criteria have been met. First, that it is just and reasonable for Mr Merricks to act as the class representative (sections 47B(5)(a) of the Act). Second, that the claims are eligible for inclusion in collective proceedings (section 47B(5)(b) of the Act), which means that the claims all raise common issues of fact or law and are suitable to be brought in collective proceedings (section 47B(6) of the Act). The CAT refused to make a CPO as the claims failed this second requirement because: (1) the claims were not suitable for an aggregate award of damages per rule 79(2)(f) of the Competition Appeal Tribunal Rules 2015 (the CAT Rules) (the suitability for aggregate damages issue); and (2) Mr Merricks proposed distribution of any award did not satisfy the compensatory principle in common law, which the CAT considered relevant under rule 79(2) of the CAT Rules (the distribution issue). The Court of Appeal allowed Mr Merricks appeal, finding that the CAT had made five errors of law. Mastercard appealed to the Supreme Court. The Supreme Court dismisses Mastercards appeal. It agrees with the Court of Appeal that the CATs decision is undermined by error of law and sends Mr Merricks application for a CPO back to the CAT. Lord Briggs gives the main judgment, with which Lord Thomas agrees. Lord Kerr had agreed that the appeal should be dismissed for the reasons set out in Lord Briggs judgment prior to his retirement on 30 September 2020. Three days before the judgment was initially due to be handed down, Lord Kerr sadly died. The President of the Supreme Court re constituted the panel under section 43(4) of the Constitutional Reform Act 2005 to consist of Lord Briggs, Lord Sales, Lord Leggatt and Lord Thomas. Lord Sales and Lord Leggatt give a combined separate judgment in which they disagree with Lord Briggs reasoning in part. They do not dissent as they recognise that they were in the minority and the pure happenstance that Lord Kerr died after completion of the judgments, but just before they could be handed down, should not mean that the case has to be re heard due to an evenly divided panel [82 83]. Collective proceedings are a special form of civil procedure. They are designed to provide access to justice and ensure the vindication of private rights where an ordinary individual civil claim would be inadequate for that purpose. This purpose helps interpret the legal requirements of the certification process [45]. An important element of the background to collective proceedings is that courts frequently have to deal with difficult issues in calculating damages. Courts do not deprive an individual claimant of a trial merely because of these quantification issues, provided there is a triable issue that the claimant has suffered more than nominal loss [46 47]. If these issues would not have prevented an individual consumers claim from proceeding to trial, the CAT should not have stopped the collective proceedings claim at the certification phase [56]. This fundamental requirement of justice that the court must do its best on the available evidence in relation to damages is the broad axe principle and it applies to competition cases [51]. Justice requires that damages be quantified in order to vindicate a claimants rights and to ensure that a defendant pays to reflect the wrong done, especially where anti competitive conduct may never otherwise be restrained if individual consumers are unable to bring claims [53 54]. Another important element is to understand the meaning of suitable, both under section 47B(6) of the Act which requires the claims to be suitable to be brought in collective proceedings, and in rule 79(2)(f) which says that they must be suitable for an aggregate award of damages. Suitable means suitable relative to individual proceedings. Therefore, the CAT should have asked itself whether the claims were suitable to be brought in collective proceedings as compared to individual proceedings, and suitable for an award of aggregate damages as compared to individual damages [56 57]. Against this background, the Supreme Court finds that the CAT made five errors of law [64]. First, it failed to recognise that in addition to overcharge, the merchant pass on issue was also a common issue (as the Court of Appeal had found and which was not appealed to the Supreme Court). This should have been a powerful factor in favour of certification (rule 79(2)(a) of the CAT Rules) [66]. Second, the CAT placed great weight on its decision that the case was not suitable for aggregate damages. This is a relevant factor for certification, but it is not a condition [61, 67 69]. Third, the CAT should have applied a test of relative suitability. If the forensic difficulties would have been insufficient to deny a trial to an individual claimant, they should not have been sufficient to deny certification for collective proceedings [70 71]. Fourth (the most serious error), the CAT was wrong to consider that difficulties with incomplete data and interpreting the data are a good reason to refuse certification. Civil courts and tribunals frequently face problems with quantifying loss and the CAT owes a duty to the class to carry out the task in a case of proven breach of statutory duty coupled with a realistically arguable case that some loss was suffered [72 74]. Fifth, the CAT was wrong to require Mr Merricks proposed method of distributing aggregate damages to take account of the loss suffered by each class member. A central purpose of the power to award aggregate damages in collective proceedings is to avoid the need for individual assessment of loss and the Act expressly modifies the ordinary requirement for the separate assessment of each claimants loss [58, 77]. Lord Sales and Lord Leggatt agree with Lord Briggs that the CAT was wrong to refuse certification on the distribution issue [148 150]. However, they disagree on the suitability for aggregate damages issue. They consider that the CAT applied the test to determine the suitability of a class of claims for an aggregate award of damages under section 47C(2) of the Act correctly and thus the CAT was entitled to conclude that the claims were not suitable to be brought in collective proceedings [167 169]. Their key reasons are at [111, 116 119, 121, 124, 153, 156 166]. |
These appeals concern the obligations of insurance companies under various contracts of employers liability (EL) insurance. In particular, the appeals concern the scope of the insurers obligations to indemnify employers against their liabilities towards employees who have contracted mesothelioma following exposure to asbestos. Mesothelioma has an unusually long gestation period, which can be in excess of 40 years between exposure to asbestos and manifestation of the disease. The insurers maintain that the EL policies only cover mesothelioma which manifested as a disease at some point during the relevant policy period. In contrast, the employers submit that the insurance policies respond to mesothelioma caused by exposure to asbestos during the relevant policy period but which develops and manifests itself sometime later. The usual rule in negligence cases is that the claimant must establish on the balance of probabilities that the defendants negligence caused his injury or disease. In Fairchild v Glenhaven Funeral Services Ltd [2002] UKHL 22 and Barker v Corus UK Ltd [2006] UKHL 20 the House of Lords developed an exception to this general principle in cases involving mesothelioma caused by exposure to asbestos. The effect of this special rule is that an employer is liable where exposure to asbestos contributed to the risk that the employee would suffer mesothelioma and where the employee in fact develops the disease. The insurers submit that the special rule in Fairchild/Barker is not applicable when deciding, for the purposes of an EL insurance policy, whether an employees mesothelioma was caused by exposure to asbestos during a particular policy year. At first instance Burton J held that the policies should all be interpreted as having a causation wording. He therefore held that the liability trigger under the EL policy was when the employee inhaled the asbestos and not the date when the malignant lesion developed. A majority of the Court of Appeal (Rix and Stanley Burnton LJJ) upheld the judge in relation to some of the EL insurance policies (particularly those covering disease contracted during the relevant insurance period); however they concluded that other policies (particularly those covering disease sustained during the insurance period) responded only on an occurrence or manifestation basis. These appeals to the Supreme Court raise two issues: (i) On the correct construction of the EL policies, is mesothelioma sustained or contracted at the moment when the employee is wrongfully exposed to asbestos or at the moment when the disease subsequently manifests in the employees body? (ii) Does the special rule in Fairchild/Barker apply when determining whether, for the purposes of the EL policies, an employee sustained or contracted mesothelioma during a particular policy period? The Supreme Court dismisses the insurers appeal by a 4 1 majority; Lord Phillips dissenting on the second issue. Lord Mance gives the main judgment. To resolve the meaning of the EL policies it is necessary to avoid over concentration on the meaning of single words or phrases viewed in isolation, and to look at the insurance contracts more generally [19]. Several features point the way to the correct construction. First, the wordings of the policies on their face require the course of employment to be contemporaneous with the sustaining of the injury [20]. Second, the wordings demonstrate a close link between the actual employment undertaken during each period and the premium agreed by the parties for the risks undertaken by the insurers in respect of that period. Third, on the insurers case there is a potential gap in cover as regards employers breaches of duty towards employees in one period which only lead to disease or injury in another later period [24]. Fourth, on the insurers case employers would be vulnerable to any decision by the insurers not to renew the policy. A decision not to renew might arise from the employers complying with their duty to disclose past negligence upon any renewal. Employers who discovered that they had been negligent in the course of past activities in respects that had not yet led to any manifest disease would have such a duty. The insurers could then simply refuse any renewal or further cover [25]. Fifth, the way most of the policies deal with extra territorial issues throws doubt on any suggestion that the wordings are so carefully chosen that a court should stick literally to whatever might be perceived as their natural meaning [28]. Section 1 of the Employers Liability Compulsory Insurance Act 1969 also points the way to the correct interpretation. This states that every employer shall insure, and maintain insuranceagainst liability for bodily injury or disease sustained by his employees, and arising out of and in the course of their employment. In order to give proper effect to the protective purpose of that legislation, the Act requires insurance on a causation basis [47]. There is no difficulty in treating the word contracted as looking to the causation of a disease, rather than its development or manifestation. The word contracted used in conjunction with disease looks to the initiating or causative factor of the disease [49]. While the word sustained may initially appear to refer to the manifestation of an injury, the nature and underlying purpose of the EL insurances is one which looks to the initiation or causation of the accident or disease which injured the employee. Accordingly a disease may properly be said to have been sustained by an employee in the period when it was caused or initiated, even though it only developed or manifested itself later [50]. In relation to the second issue, the question is whether the EL policies cover employers liability for mesothelioma arising under the special rule in Fairchild/Barker [71]. Under that rule the law accepts a weak or broad causal link between the employers negligence and the employees mesothelioma. When construing the EL policies the concept of a disease being caused during the policy period must be interpreted sufficiently flexibly to embrace the role assigned to exposure by the Fairchild/Barker rule [74]. The purpose of the EL policies was to insure the employers against liability to their employees. Once it is held that the employers are liable to the employees, it would be remarkable if the insurers were not liable under the policies [88]. Accordingly, for the purposes of the EL policies, the negligent exposure of an employee to asbestos during the policy period has a sufficient causal link with subsequently arising mesothelioma to trigger the insurers obligation to indemnify the employer [74]. Lord Phillips dissents on the second issue. The special approach developed in Fairchild/Barker raises no implication or fictional assumption as to when mesothelioma is initiated. The consequence is that if claimants have to show that mesothelioma was initiated in a particular policy year in order to establish that insurers are liable they are unable to do so. This conclusion is not affected by section 3 of the Compensation Act 2009, which did not alter the jurisprudential basis of the Fairchild/Barker approach [132] [133]. |
This judgment deals with two English cases, while a separate judgment deals with the Scottish case Eba v Advocate General for Scotland. The issue common to all three is the scope for judicial review by the High Court or Court of Session of unappealable decisions of the Upper Tribunal established under the Tribunals, Courts and Enforcement Act 2007 (the 2007 Act). In all of them the claimant failed in an appeal to the First tier Tribunal and was refused permission to appeal to the Upper Tribunal against that decision both by the First tier Tribunal and by the Upper Tribunal. In all three the claimant seeks a judicial review of the refusal of permission to appeal by the Upper Tribunal. The tribunal systems with which the three cases are concerned, both before and after their restructuring in the 2007 Act, are common to both parts of the United Kingdom, and in many contexts also to Northern Ireland. Part 1 of the 2007 Act established a new unified tribunal structure, which accommodates a diversity of jurisdictions. There is a right of appeal to the Court of Appeal, in England and Wales or Northern Ireland, or the Court of Session in Scotland, on any point of law arising from a decision made by the Upper Tribunal other than an excluded decision (s 13(1), (2)). Excluded decisions include any decision of the Upper Tribunal on an application for permission or leave to appeal (s 13(8)(c)). Mr Cart appealed to the Social Security and Child Support Tribunal (whose jurisdiction has since been taken over by the First tier Tribunal) against the refusal of the Child Support Agency to revise a variation in the level of child maintenance to be paid to his ex wife. His appeal was dismissed. He applied for permission to appeal to the Child Support Commissioners (whose functions were subsequently taken over by the Administrative Appeals Chamber of the Upper Tribunal). Commissioner Jacobs gave him permission to appeal on three grounds but refused him permission to appeal on a fourth. The Upper Tribunal dismissed his appeal on the first three grounds and declined permission to reopen the fourth. Mr Cart sought judicial review of the Upper Tribunals refusal of permission to appeal on the fourth point. Determining the amenability of the Upper Tribunal to judicial review as a preliminary issue, the Divisional Court dismissed his claim for judicial review, holding that this was only available in exceptional circumstances. The Court of Appeal dismissed his appeal, reaching the same result but by a different route. MR is a native of Pakistan whose application for asylum was refused. His appeal to the Immigration and Asylum chamber of the First tier Tribunal was dismissed. Both the First tier Tribunal and then the Upper Tribunal refused his application for permission to appeal to the Upper Tribunal. MR sought judicial review of the Upper Tribunals refusal of permission to appeal. Sullivan LJ dismissed the judicial review claim in accordance with the decision of the Court of Appeal in Cart. He granted a certificate so that the appeal against his decision could leap frog over the Court of Appeal and be heard by this Court together with the appeals in Cart and Eba. The Supreme Court unanimously dismisses the appeals but on a different basis from that adopted in the Divisional Court and the Court of Appeal. It decides that permission for judicial review should only be granted where the criteria for a second tier appeal apply, that is where there is an important point of principle or practice or some other compelling reason to review the case. Lady Hale gives the leading judgment. The scope of judicial review is an artefact of the common law whose object is to maintain the rule of law. The question is, what machinery is necessary and proportionate to keep mistakes of law to a minimum? What level of independent scrutiny outside the tribunal structure is required by the rule of law? [37], [51] There are three possible approaches which the Court could take. First, that the scope of judicial review should be restricted to the exceptional circumstances identified in the Divisional Court and Court of Appeal, namely pre Anisminic excess of jurisdiction and the denial of fundamental justice (and possibly other exceptional circumstances). Second, that unrestricted judicial review should be available. Third, that judicial review should be limited to the grounds upon which permission to make a second tier appeal to the Court of Appeal would be granted, namely (a) the proposed appeal would raise some important point of principle or practice, or (b) there is some other compelling reason for the court to hear the appeal. [38] While the introduction of the new system may justify a more restricted approach, the exceptional circumstances approach is too narrow, leaving the possibility that serious errors of law affecting large numbers of people will go uncorrected. As regards the second approach, it is well known that the High Court and Court of Appeal were overwhelmed with judicial review applications in immigration and asylum cases until the introduction of statutory reviews. The mere fact that something has been taken for granted without causing practical problems in the social security context until now does not mean that it should be taken for granted forever. [44], [47], [51] The adoption of the second tier appeals criteria would be a rational and proportionate restriction upon the availability of judicial review of the refusal by the Upper Tribunal of permission to appeal to itself. It would recognise that the new and in many ways enhanced tribunal structure deserves a more restrained approach to judicial review than has previously been the case, while ensuring that important errors can still be corrected. It is a test which the courts are now very used to applying. It is capable of encompassing both the important point of principle affecting large numbers of similar claims and the compelling reasons presented by the extremity of the consequences for the individual. There is clearly nothing in Mr Cart or MRs cases to bring them within the second tier appeal criteria. [57], [59], [128], [130], [131], [133] Per Lord Phillips. Where statute provides a structure under which a superior court or tribunal reviews decisions of an inferior court or tribunal, common law judicial review should be restricted so as to ensure, in the interest of making the best use of limited judicial resources, that this does not result in a duplication of judicial process that cannot be justified by the demands of the rule of law. [89] |
Trump International Golf Club Scotland Ltd (TIGC) has developed a golf resort at Menie Estate and Menie Links, Balmedie, Aberdeenshire. In 2011, Aberdeen Offshore Wind Farm Ltd applied for consent under s.36 of the Electricity Act 1989 (the 1989 Act) to construct and operate the European Offshore Wind Deployment Centre in Aberdeen Bay. The application concerned the construction of up to 11 wind turbines, which might be of different sizes, with a maximum power generation of 100 MW. The proposed windfarm would be located about 3.5km from the golf resort and would be seen by people at the resort. TIGC opposed the application. In March 2013, the Scottish Ministers granted consent (the Consent) for the development and operation of the windfarm subject to conditions. TIGC challenged the Consent on various grounds in the Scottish courts without success [1]. TIGC appealed to the Supreme Court on two remaining grounds, arguing that the Consent should be quashed: (a) because the Scottish Ministers had no power under the 1989 Act to grant consent to the windfarm application as only the holder of a licence to generate, transmit, or supply electricity granted under s.6, or a person exempted under s.5 from holding such a licence may apply under s.36 (the Section 36 Challenge); and (b) because condition 14 of the Consent, which requires the submission and approval of a design statement, is void for uncertainty (the Condition 14 Challenge) [2]. The Supreme Court unanimously dismisses the appeal by TIGC. The leading judgment is given by Lord Hodge, with whom Lord Neuberger, Lord Mance, Lord Reed and Lord Carnwath agree. Lord Mance and Lord Carnwath each give concurring judgments. Section 36 Challenge TIGCs Section 36 Challenge is rejected. It is not supported by the structure and language of the 1989 Act [8 13]. Further, there is nothing in the policy background to the 1989 Act which requires the Court to take a different view of the statutory provisions. There are five reasons for this [14]: (1) The 1989 Act aimed to liberalise the British electricity market by privatisation. The policy did not address who would construct generating stations, and it was not a necessary part of the policy that the persons who built generating stations would also be the persons generating the electricity [15]. (2) The 1989 Act contains two separate regulatory regimes: (a) one for the construction of generation stations and overhead lines, and (b) one for the licensing of electricity supply, including generation. Since devolution, there have been separate regulators for those activities in Scotland [16]. (3) Parliament did not create a regulatory gap by allowing persons who are not subject to environmental duties under para 3(1) of Schedule 9 to apply for construction consents under s.36. The Scottish Ministers have a duty when considering a s.36 application to have regard to environmental matters, and wide powers to impose conditions to protect the environment [17]. (4) There is no need to require a s.36 applicant to hold in advance a generating licence or exemption, as the Scottish Ministers may (pursuant to s.36(5)) include appropriate conditions in a consent [18]. (5) It is established practice in both British jurisdictions for commercial organisations to apply for and obtain s.36 consents before they seek a licence to generate electricity, or an exemption [19]. Condition 14 Challenge The short answer to this challenge is that, even if condition 14 were unenforceable, the Consent would not be invalidated. Condition 7 requires that the development be constructed in accordance with the supplemental environmental information statement (SEIS) which covers important elements of the benefits promoted by condition 14, and the Scottish Ministers can insist on compliance with the SEIS. Further, the scope of the development is defined by Annex 1 of the Consent and the SEIS specifies the maximum size and location of the turbines. Condition 14 is not therefore a fundamental condition determining the scope and nature of the development which, if invalid, would invalidate the Consent [24 26]. Even if condition 14 could not be enforced, a planning condition is only void for uncertainty if it can be given no sensible or ascertainable meaning. This cannot be said for condition 14, which provides that the Scottish Ministers must approve the design statement before the development can begin [27]. Further, condition 14 is not invalid owing to any uncertainty as to what amounts to compliance with its terms. Construing the conditions as a whole (in particular conditions 13 and 24), it is clear that the Consent contains a mechanism enabling the Scottish Ministers to use both the construction method statement and the design statement to regulate the design of the windfarm in the interests of environmental protection, and to require compliance with those statements [28 30]. Given those conclusions, it is unnecessary to consider whether terms could be implied into the Consent [31]. Had it been necessary, however, an inference would have been drawn that the Consent read as a whole required the developer to conform to the design statement [37]. There is not a complete bar on implying terms into planning permissions, and the planning legislation cases relied on by TIGC which suggest otherwise are not directly applicable to conditions under the 1989 Act given the different statutory language [32]. Whether words are implied into a document depends on the interpretation of the express words and, while restraint is required when implying terms into public documents with criminal sanctions, there is no reason for excluding implication altogether [33 36]. Finally, the flexibility conferred on the Scottish Ministers in conditions 7 and 13 to modify the way in which the windfarm is constructed and operated does not invalidate those conditions, as the Scottish Ministers are not able to alter the nature of the approved development [38 39]. Lord Mance provides some comments on the process of implication of terms [41 44]. Lord Carnwath agrees that the planning cases do not assist in this appeal, given the differences between the statutory schemes [67 70], but he provides some guidance on the principles of interpretation derived from them [45]. He considers that the process of interpreting a planning permission does not differ materially from that appropriate to other legal documents and that there is no reason to exclude implication as a technique of interpretation where it is justified [46 66]. |
On 24 October 2007 Mr Perry, was convicted in Israel of a number of fraud offences in relation to a pension scheme that he had operated in Israel. He was given a substantial prison sentence and paid a fine of approximately 3m. The Serious Organised Crime Agency (SOCA) is now seeking to deprive Mr Perry, together with members of his family and entities associated with them, of assets obtained in connection with his criminal conduct, wherever in the world those assets may be situated. None of these persons resides in the United Kingdom. As a preliminary step, aimed at ensuring that its action to recover assets is effective, SOCA obtained a worldwide property freezing order (PFO) against Mr Perry, his wife and Leadenhall Property Limited (the PFO appellants). Before that, it had obtained a disclosure order (DO) under which notices requesting information were given to Mr Perry and his daughters (the DO appellants) by letter addressed to Mr Perrys house in London. The PFO appellants challenged the PFO on the basis that a civil recovery order could only be made in respect of property that was within the territorial jurisdiction of the court making it. The DO appellants contended that notices under the DO could not be addressed to persons who were not within the UK. In the PFO matter, the High Court ruled that the provisions of the Proceeds of Crime Act 2002 (POCA) relied on by SOCA did apply, save as to orders made in Scotland, to property outside the jurisdiction and upheld the scope of the PFO. An appeal from this decision was dismissed by the Court of Appeal on 18 May 2011. Earlier, the Court of Appeal had also upheld the validity of the notices requesting information given to the DO appellants under the DO. Appeals against the PFO and the DO notices were brought to the Supreme Court and were heard together. The Supreme Court allows both appeals: the PFO appeal by a majority (Lord Judge and Lord Clarke dissenting) and the DO appeal unanimously. Lord Phillips (with whom Lady Hale, Lord Brown, Lord Kerr and Lord Wilson agree) gives the main judgment. Lord Reed and Sir Anthony Hughes give shorter concurring judgments. Lord Judge and Lord Clarke give a joint dissenting judgment on the PFO appeal. SOCAs application was pursuant to the powers in Part 5 of POCA for the court to make a civil recovery order in respect of property which is, or represents, property obtained through criminal conduct. The applicable definition of the term property is in section 316(4) which provides that property is all property wherever situated. However, many of the provisions referring to property in POCA plainly apply only to property within the UK and the scope of the term depends on its context. Thus the definition should not have been given the weight it had carried in the courts below [14]. Although there was a presumption under principles of international law that a statute does not have extraterritorial effect, states have departed from this by agreement in the case of confiscating the proceeds of crime. POCA must be read in the light of the Strasbourg Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, which recognises that the courts of state A may seek to seize property in state B which is the proceeds of the criminal conduct of a defendant subject to the criminal jurisdiction of state A [18 29]. Parts 2, 3 and 4 of POCA provide for (a) the imposition of personal obligations in respect of property worldwide; (b) proprietary measures to secure and realise property within the UK and (c) requests to be made to other states to take such measures in respect of property within their territories. This represents a coherent international scheme which accords with the Strasbourg Convention and with principles of international law [31 38]. The purpose of Part 5 of POCA is to enable recovery in civil proceedings in each part of the UK of property which is or represents property obtained through unlawful conduct. The focus is on the property rather than a particular defendant. In their natural meaning, and in the absence of provisions corresponding to those for enforcement abroad in Parts 2, 3 and 4, the provisions of Part 5 apply only to property within the UK [53 56, 136]. The only anomaly with this analysis was the presence of section 286(2) POCA which purported to create a different position in Scotland from that in the rest of the UK. There was no satisfactory explanation for this and it remained an enigma [75 77] (Lord Reed thought it may have reflected a misunderstanding [152]), but it did not alter the overall conclusion that the High Court of England and Wales had no jurisdiction under Part 5 to make a recovery order in relation to property outside England and Wales. Thus the property covered by the PFO must be limited to such property, and the appellants could not be required under it to disclose all their worldwide assets [78 82]. The notices under the DO were given to persons who were, and were known by SOCA to be, outside the jurisdiction of the UK. Compliance with such orders was subject to penal sanction. It was generally contrary to international law for country A to purport to make criminal conduct in country B committed by persons who are not citizens of country A. It was therefore implicit that the power to impose positive obligations to provide information could only be exercised in respect of persons who were within the UK and the DO did not authorise the sending of notices to persons outside the UK [94, 98]. Lord Judge and Lord Clarke, dissenting on the PFO appeal, agreed that POCA was poorly drafted but held that the objective was clearly to deprive criminals of the proceeds of their crimes, whether here or abroad [160]. The expression all property wherever situated should have the same meaning in all sections in which it appeared [164]. Control mechanisms had been created in Part 5 to ensure that orders made could avoid any improper extra territorial effect or infringement of the principle of sovereignty. Recovery orders took personal effect and, in respect of foreign property, were subject to the local law [167]. |
This pre trial appeal concerns a point of pure statutory construction. The Respondents face charges of knowingly making false declarations in relation to election expenses, or aiding and abetting or encouraging or assisting such offences. The parties asked the judge to determine the point on a preparatory hearing, pursuant to Part III of the Criminal Procedure and Investigations Act 1996. The question of law certified by the Court of Appeal (Criminal Division) as a point of law of general public importance is as follows: Do property, goods, services or facilities transferred to or provided for the use or benefit of a candidate free of charge or at a discount (as identified in section 90C(1)(a) of the Representation of the People Act 1983 (as amended)) only fall to be declared as election expenses if they have been authorised by the candidate, his election agent or someone authorised by either or both of them? The Court of Appeal held that section 90C of the Representation of the People Act 1983 (the RPA 1983) requires authorisation of expenses before the need for them to be declared arises. The Supreme Court unanimously allows the appeal, answering the certified question in the negative. Lord Hughes gives the judgment with which the other justices agree. The concept of authorisation of expenses is frequently resorted to in the legislation [16]. The critical question is whether this concept also governs the notional expenditure provision in section 90C of RPA 1983 [17]. Section 90C asks, by subsections (1)(a) and (b), three questions about the notional expenditure it is considering. If the answer to all of these questions is yes, then subsection (2) stipulates that the expenditure shall be treated as incurred by the candidate for the purposes of the Act. The questions, which equally apply to goods, property or facilities, are: 1. Were the services provided for the use or benefit of the candidate either free of charge or at a discount of more than 10% of commercial value; 2. Were they made use of by or on behalf of the candidate; and 3. If the services had actually been paid for (expenses actually incurred) by or on behalf of the candidate, would those expenses be election expenses incurred by or on his behalf (and thus subject to the various controls imposed by the Act)? [18] There is no room in these questions for an additional requirement that the provision of services must have been authorised by the candidate or his election agent, or by someone authorised by either of them. The test is whether the goods, property or facilities are used by, or on behalf of, the candidate. This differs from the test in section 90ZA(4) of RPA 1983 for expenses actually incurred which does require authorisation. The ambit of the use test is not resolved by the question asked and will depend on the facts as they emerge in each case. [19, 25]. Section 90ZA(1) confirms this analysis by the express provision that the definition of election expenses therein is subject to section 90C. Rather than 90C incorporating the words of 90ZA(4), it imports an additional category of expenditure to be included in 90ZA(4), namely expenses notionally incurred by the candidate [20]. The plain reading of the Act cannot be displaced by possibly inconvenient or even newly recognised consequences [27 28]. The point that the candidate and election agent risk the commission of criminal offences is well made. The more serious offence of knowingly making false declarations requires a dishonest state of mind. While the strict liability offence is different, section 86 of the Act provides for relief from sanctions where the offence has been committed despite good faith [29]. |
RFC 2012 Plc (RFC) was a member of a group of companies whose parent company was Murray International Holdings Ltd. By a deed dated 20 April 2001, Murray Group Management Ltd, which was also a member of the group, set up a trust known as the Remuneration Trust (the Principal Trust). When a group company wished to benefit an employee it made a payment to the Principal Trust. On payment, the employing company asked the trustee of the Principal Trust to resettle the sum on to a sub trust and requested that the sub trust income and capital should be applied in accordance with the employees wishes. The trustee of the Principal Trust had a discretion whether to comply with those requests, but, in practice, the trustee without exception created the requested sub trust. The employee was appointed as protector of the sub trust with the power to change its beneficiaries. When RFC negotiated the engagement of a footballer, RFC would explain the sub trust mechanism, in particular, that the prospective employee could obtain a loan of the sum paid to the sub trust from its trustee which would be greater than the payment net of tax deducted under PAYE if he were to be paid through RFCs payroll. The trust fund would be held for the benefit of the beneficiaries of the sub trust, being members of the footballers family whom he specified. On the footballers death, the loans and interest would be repayable out of his estate, thereby reducing its value for Inheritance Tax purposes. RFC used the same mechanisms in paying discretionary bonuses to its senior executives. The Income Tax (Earnings and Pensions Act) 2003 (ITEPA) governs RFCs liability to income tax on employment income during the relevant tax years from 2003/04 to 2008/09. Section 6 imposes a tax on general earnings. Section 7 defines general earnings by reference to section 62. Section 62(2) provides [E]arnings, in relation to an employment, means (a) Any salary, wages or fee, (b) Any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or moneys worth, or (c) Anything else that constitutes an emolument of the employment. The Income and Corporation Taxes Act 1988 (ICTA) applied in the tax years 2001/02 and 2002/003. The relevant provisions in ICTA, under which income tax is charged on emoluments, are essentially to the same effect as those in ITEPA. In accordance with the Income Tax (Employments) Regulations 1993 and the Income Tax (Pay As You Earn) Regulations 2003 (the PAYE Regulations), employers who pay emoluments or earnings which are assessable to tax are required to deduct income tax from their payments to their employees under the pay as you earn (PAYE) regime. Under the PAYE Regulations, HM Revenue and Customs Commissioners determined that RFC had failed to pay income tax and National Insurance Contributions (NICs) on the sums paid to the trusts as remuneration. The parties to the appeal agreed that the determination of the appeal in relation to income tax governs the liability to NICs. The First tier Tribunal (the FTT) held that the scheme was effective in avoiding liability to income tax and NICs because the employees had only received a loan of the moneys paid to the trusts. The Upper Tribunal (Tax and Chancery Chamber) upheld the FTTs decision. The Inner House allowed HMRCs appeal. It held that income derived from an employees work is assessable to income tax, even if the employee agrees that it be redirected to a third party. The central issue in this appeal is whether it is necessary that the employee should himself or herself receive, or at least be entitled to receive, the remuneration for his or her work in order for that payment to amount to taxable earnings. The Supreme Court unanimously dismisses RFCs appeal. Lord Hodge gives the judgment, with which the other Justices agree. Three aspects of statutory interpretation are important in determining this appeal. First, provisions in the tax code imposing specific tax charges do not militate against the existence of a more general charge to tax which may have priority over or qualify the specific charge. Secondly, it is necessary to pay close attention to the statutory wording and not be distracted by judicial glosses which have enabled the court to apply the statutory words in other factual contexts. Thirdly, a purposive approach to the interpretation of the taxing provisions must be adopted [15]. As a general rule, the charge to tax on income extends to money that the employee is entitled to have paid as remuneration irrespective of whether it is paid to the employee or to a third party [41]. The relevant ICTA and ITEPA provisions do not restrict the concept of earnings by requiring payment to a specific recipient [38]. Section 62(2)(b) ITEPA confines the charge on perquisites and profits to benefits received by the employee, but there is no such restriction in section 62(2)(a) or 62(2)(c) [49]. Nothing in the wider purpose of the legislation excludes from the tax charge remuneration which the employee is entitled to have paid to a third party [39]. Parliament has sought to tax remuneration paid in money or moneys worth. There is no rationale for excluding from the scope of this tax charge remuneration in the form of money which the employee agrees should be paid to a third party [59]. For the purposes of PAYE it is necessary to determine whether there has been a payment of earnings from which deductions were required. Misplaced reliance on judicial glosses in relation to the concept of payment is evident in the case law leading up to the appeal [51]. There is no basis for establishing a general rule that a payment is made for the purposes of PAYE only if the money is paid to or at least placed unreservedly at the disposal of the employee [54]. The references to making a relevant payment to an employee or other payee in the PAYE Regulations fall to be construed as payment either to the employee or to the person to whom payment is made with the agreement of the employee [58]. The sums paid to the trustee of the Principal Trust for a footballer constituted the footballers earnings [64]. The risk that the trustee might not set up a sub trust or give a loan of the sub trust funds to the footballer does not alter the nature of the payments made to the trustee of the Principal Trust [65]. The discretionary bonuses made available to RFCs employees through the same trust mechanisms also fall within the tax charge as these were given in respect of the employees work [66]. Payment to the Principal Trust should have been subject to deduction of income tax under the PAYE Regulations [67]. As the sums paid into the Principal Trust were earnings in the first place, the specific provisions of the tax code which deem the benefit of loans to be earnings cannot apply [69]. |
The appellants are 14 lead claimants in claims by over 600 Iraqi citizens who claim to have suffered unlawful detention and/or physical maltreatment at the hands of British armed forces in Iraq between 2003 and 2009. The claims are brought in tort in England against the Ministry of Defence. The torts are governed by Iraqi law. The Foreign Limitation Periods Act 1984 provides that where a claim is brought in England which is governed by a foreign law, the English courts are to apply the foreign law of limitation. In a substantial number of these cases the action was begun more than three years after the relevant claimant became aware of the injury and the person who caused it, and was therefore time barred under article 232 of the Iraqi Civil Code. The appellants argued that time had been suspended for limitation purposes under article 435(1) of the Civil Code, which suspends the time limit during any period when there is [an] impediment rendering it impossible for the plaintiff to claim his right. They said that Coalition Provisional Authority Order 17 (CPA Order 17), which gave coalition forces immunity from Iraqi legal process and jurisdiction and still has force of law in Iraq, was such an impediment. The first instance judge directed the hearing of a preliminary issue, namely whether the suspensory proviso in article 435(1) applied to the claimants proceedings in England. He held that the limitation period was suspended under article 435(1). The Court of Appeal allowed the Ministry of Defences appeal, holding that article 435(1) was not engaged, because the English courts are not bound to apply CPA Order 17, which is a mere procedural bar that is irrelevant to proceedings in England. The Supreme Court unanimously dismisses the appeal by the Iraqi civilians, and affirms the Court of Appeals conclusion that the limitation period was not suspended under article 435(1) of the Iraqi Civil Code. Lord Sumption gives the only judgment, with which the other Justices agree. The Foreign Limitation Periods Act 1984 requires an English court to apply to English proceedings a foreign law of limitation which will have been designed for proceedings in the foreign country. This requires a process of transposition. Facts that the foreign law would have treated as relevant to the foreign proceedings might be irrelevant to the proceedings in England [13]. Where the Iraqi law of limitation depends on some fact about the proceedings, the English court must ask whether that fact is applicable to proceedings brought in England, and not to hypothetical proceedings that might have been brought in Iraq [15]. CPA Order 17 applies only in Iraq. It is not an impediment to the only relevant proceedings, which are in England. It does not therefore suspend the running of the Iraqi law limitation period [16]. |
At the heart of this appeal is whether a breach of certain provisions of the Electricity Supply Regulations 1988 can give rise to a private right of action. In March 1998 Mr Brian Pritchers owned two buildings, at 23 and 25 Moss Street, Paisley. The tenants of the ground floor shop at number 23 were Morrison Sports Ltd. On 6 March 1998 the building at number 23 was destroyed by fire. Two other buildings were also damaged. Investigations identified the seat of the fire as an electricity meter cupboard in number 23. Those affected by the fire, who are now the respondents, raised three separate actions for damages against Scottish Power UK plc. All three actions are framed in the same way. The respondents aver that it was the presence of a shim fitted by employees of Scottish Power that was the cause of the fire. Scottish Power deny that the shim was fitted by their employees. One of the bases on which the respondents seek to hold Scottish Power liable is that the fire was caused by Scottish Powers breach of their statutory duty under regulations 17, 24 and 25 relating to a suppliers works of the 1988 Regulations. The 1988 Regulations were made by the Secretary of State by virtue of his powers under section 16 of the Energy Act 1983. Part I of the 1983 Act, including section 16, was repealed by the Electricity Act 1989, but the power to make regulations was maintained in section 29 of the new Act. Scottish Power now accept that the 1988 Regulations have effect as if they were made under section 29 of the 1989 Act. The difference between section 16 of the 1983 Act and section 29 of the 1989 Act and, hence, the point in dispute in the Court of Session lies in the concluding words of section 29(3). Section 29(3) of the 1989 Act, but not section 16(3) and (4) of the 1983 Act, provides that nothing in subsection (3) shall affect any liability of any such person to pay compensation in respect of any damage or injury which may have been caused by the contravention. The Extra Division thought that, by enacting section 29(3), Parliament had indeed made specific provision for a private right of action for damages for loss caused by breaches of the regulations. They therefore considered that in section 29(3) Parliament had introduced an important private right of action for damages by reservation. Scottish Power appealed to the Supreme Court. The Supreme Court unanimously allows the appeal. It holds that contraventions of regulations 17, 24 and 25 of the 1988 Regulations do not give rise to a private right of action. The judgment of the Court is delivered by Lord Rodger. There is no basis whatever for thinking that the drafter of section 29(3) of the 1989 Act intended to introduce a civil right of action but somehow botched that comparatively straightforward task and came up with the words in the subsection which are so singularly ill suited to the supposed purpose. Far from itself providing that a person who contravenes a provision should be liable to pay compensation, the subsection merely confirms that the liability to the criminal penalty is not to affect any liability of the offender to pay compensation. By any liability Parliament means the offenders liability, if any, to pay compensation, for which regulations made under section 29 may provide [paras 16 and 27]. The language used in the subsection reflects language used in earlier regulations. On the other hand there is nothing to show why the tailpiece was omitted from section 16(4) of the 1983 Act [paras 18 22]. There are indications in the overall legislative scheme that a breach of the relevant provisions of the 1988 Regulations would not give rise to a private law statutory right of action. First, there are provisions in the 1989 Act and the 1988 Regulations that point strongly to the conclusion that the regulations are to be enforced by the Secretary of State and those appointed to act on his behalf, rather than by individuals raising private actions [paras 30 32]. In addition, there are provisions in the 1988 Regulations which envisage situations where a consumer may be in breach of a requirement of the 1988 Regulations and where that breach may give rise to a risk of danger to others. If the respondents argument were correct, the 1988 Regulations would confer a right of action against individual consumers of electricity for any failure to comply with a requirement under these provisions. It seems unlikely that Parliament intended the legislation to operate in that way [para 35]. If it really were the case that a supplier could be held liable in damages for a contravention of any regulations made under section 29 of the 1989 Act, then the protection afforded by section 21(b) of the Act (under which a supplier of electricity under section 16(1) of the Act may require any person who requires a supply of electricity to accept any terms restricting any liability of the supplier for economic loss resulting from negligence which it is reasonable in all the circumstances for that person to be required to accept) would be ineffective in the situation where the suppliers negligence constituted a contravention of the regulations [para 36]. That no private right of action is available is reinforced by the fact that it is difficult to identify any limited class of the public for whose protection the 1988 Regulations were enacted and on whom Parliament intended to confer a private right of action for breach of the provisions of the Regulations. One of the necessary preconditions of the existence of a private law cause of action is that the statutory duty was imposed for the protection of a limited class of the public [paras 38 40]. |
The appeal arises out of a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependants) Act (the Act), brought against the estate of Mrs Jackson by her daughter, Mrs Ilott. Mrs Ilott and her mother had been estranged for the majority of the 26 years preceding Mrs Jacksons death in 2004. The estrangement began when Mrs Ilott left home at 17 to live with her now husband, with whom she has five children. Since that time Mrs Ilott has lived independently of her mother but in straitened financial circumstances. Mrs Ilott and her family received a number of benefits, with a net annual income of around 20,000. In her last will of 2002, Mrs Jackson left the majority of her estate to a number of charities, and made no provision for her daughter. This was a decision Mrs Jackson had made as early as 1984, reflected in her will of that year. Mrs Ilott had been aware for many years of this decision and had lived without any expectation of benefit from the estate. The District Judge found that Mrs Jacksons will did not make reasonable financial provision for Mrs Ilott and awarded her 50,000. The charitable beneficiaries under the will initially challenged the finding that there was any lack of reasonable provision, but that challenge failed and the dispute has since proceeded only on the issue of the quantum of the award, which Mrs Ilott appealed as too low. The Court of Appeal held the District Judge had made two errors of principle in his approach. Firstly, he held the award should be limited in light of the long estrangement and lack of expectation of benefit, but did not identify what the award would have been without these factors and the reduction attributable to them. Secondly, he made his award without knowing what the effect of it would be on the benefits which Mrs Ilott and her family presently received, some of which were subject to a means test and which would not payable if Mrs Ilott had savings in excess of 16,000. The Court of Appeal re evaluated the claim for itself, and awarded Mrs Ilott 143,000 to buy the home she lived in, and an option to receive 20,000 in one or more instalments. The award was designed to avoid affecting Mrs Ilotts benefits entitlement. The Supreme Court unanimously allows the charities appeals. Lord Hughes gives the judgment, with which the rest of the Court agrees. Lady Hale gives a supplementary judgment, with which Lord Kerr and Lord Wilson agree. The District Judge did not make either of the two errors on which the Court of Appeal relied to revisit his award, and so the Court of Appeals order must be set aside and the District Judges order restored. The matters to which the court must have regard in exercising its power to award reasonable financial provision are listed under s.3 of the Act. For an applicant other than a spouse or partner, reasonable financial provision is limited to what it would be reasonable for her to receive for maintenance only. This is an objective standard, to be determined by the court. The limitation to maintenance provision represents a deliberate legislative choice and demonstrates the significance attached by English law to testamentary freedom. Maintenance cannot extend to any or everything which it would be desirable for the claimant to have, but is not limited to subsistence level. The level at which maintenance may be provided is clearly flexible and falls to be assessed on the facts of each case, as at the date of hearing. Although maintenance is by definition the provision of income rather than capital, it may be provided by way of a lump sum. [12 25] As to the first suggested error, the process suggested by the Court of Appeal is not warranted by the Act. The Act does not require the judge to fix some hypothetical standard of reasonable provision and then increase or discount it with reference to variable factors. All of the s.3 factors, so far as they are relevant, must be considered, and in light of them a single assessment of reasonable financial provision should be made. The District Judge worked through each of the s.3 factors, and was entitled to take into account the nature of the relationship between Mrs Jackson and Mrs Ilott in reaching his conclusion. As to the second suggested error, the District Judge specifically addressed the impact on benefits twice. The Court of Appeals criticism that his award was of little or no value to Mrs Ilott was unjustified. A substantial part of the award could be spent on replacing old and worn out household equipment which the family had previously been unable to afford. This fell within the provision of maintenance of daily living, and would avoid Mrs Ilott retaining capital for long above the 16,000 threshold. [29 41] Reasonable financial provision can in principle include the provision of housing, but ordinarily by creating a life interest rather than a capital and inheritable sum, which possibility appeared not to have been considered by the Court of Appeal. To the extent that the benefits means test was relevant, it was likely to apply also to the additional sum of 20,000 apparently awarded with a view to avoiding that test. The statement in the Court of Appeal that a claimant in receipt of benefits should be treated in the same way as a disabled claimant was problematic; what must have been meant was that receipt of means tested benefits is likely to be a relevant indication of a claimants financial position. Finally, the Court of Appeals order gave little weight to Mrs Jacksons very clear wishes and the long period of estrangement. The Court of Appeals justification for this approach was that the charities had little expectation of benefit either. This approach should be treated with caution, given the importance of testamentary bequests for charities, and because the testators chosen beneficiaries, whether relatives, charities or otherwise, do not need to justify their claim either by need or by expectation. [44 47] Lady Hale in her judgment reviews the history of the Act and preceding legislation. She comments on the unsatisfactory state of the law, giving as it does no guidance as to the weight of the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance. The approach under the Act invariably involves a value judgment, which may be problematic as there is a wide range of opinion among the public and the judiciary about the circumstances in which adult descendants ought or ought not to be able to make a claim on an estate which would otherwise go elsewhere. [49 66] |
These appeals concern the proper approach for the court to adopt, and the proper orders for the court to make, in confiscation proceedings where a number of criminals, some of whom may not be before the court, have between them acquired property or money as a result of committing an offence for which all or some of them have been convicted in the trial which led to the proceedings. In the first appeal, the appellants, Shakeel Ahmad and Syed Ahmed (the Ahmad defendants) were convicted of a carousel fraud (which involves criminally misusing the collection system of VAT to extract money from the revenue authorities) and sentenced to seven years in prison. The Ahmad defendants had been the sole directors and shareholders of a company, MST, which was registered for VAT. MST participated in 32 circular transactions by which goods were purportedly sold, and later bought back by, companies in Ireland in circumstances which resulted in 12.6 million being fraudulently reclaimed from HMRC. After a confiscation hearing, Flaux J concluded that, for the purposes of the Criminal Justice Act 1988 (the 1988 Act), the benefit obtained by MST was the benefit obtained by the Ahmad defendants jointly. (While the 1988 Act has been repealed and replaced by the Proceeds of Crime Act 2002 (the 2002 Act), the 1988 Act still applies to crimes committed before the 2002 Act came into force). The Court of Appeal determined that the benefit jointly obtained by the Ahmad defendants was the loss suffered by HMRC, uplifted to 16.1m to adjust for inflation, and that each of the Ahmad defendants was liable for the whole of this amount. In the second appeal, the three appellants, Michael Fields, Mitesh Sanghani and Karamjit Sagoo (the Fields defendants), and a fourth man, Wasim Rajput, were found guilty by a jury of conspiracy to defraud. The Fields defendants were each sentenced to five years in prison. The fraudulent conspiracy involved the use of a company, MDL, whose published accounts falsely recorded that it had over 1m in fixed assets in order to secure credit agreements to buy goods or obtain services. MDL made no payments under these agreements, and the majority of the goods disappeared. In the subsequent confiscation proceedings HH Judge Carr found that the total benefit arising from the conspiracy was about 1.4m, which had been acquired jointly by the Fields defendants. This figure was adjusted upwards to about 1.6m to allow for inflation and the judge made confiscation orders under the 2002 Act against each of the Fields defendants for the whole of this amount. The subsequent appeal to the Court of Appeal was unsuccessful. The Ahmad defendants and the Fields defendants now appeal to this court. They do not challenge the quantification of the aggregate recoverable amount, or the finding that they obtained that amount jointly. What they challenge is the decision of the Court of Appeal that each of the appellants should be separately liable for the whole of that amount. The Supreme Court unanimously allows the appeal in part. Lord Neuberger, Lord Hughes and Lord Toulson, with whom Lord Sumption and Lord Reed agree, give the judgment. The confiscation orders made in respect of each defendant should be amended to provide that they can be enforced only to the extent that the same sum has not been recovered through another confiscation order made in relation to the same joint benefit. However, the orders should not be amended to apportion the benefit between the respective defendants. Although the language of the 1988 and 2002 Acts is not identical, there is no material difference between them for present purposes [28]. A court considering an application for a confiscation order must address and answer three questions. The first question is whether a defendant has benefited from the relevant criminal conduct; the second question concerns the value, or quantification of the benefit; and the third question is what sum is recoverable from the defendant [34]. The first question: has the defendant benefited? Section 76(4) of the 2002 Act provides that a person benefits from conduct if he obtains property as a result or in connection with the conduct. As Lord Bingham held in Jennings v Crown Prosecution Service [2008] AC 1046 and R v May [2008] AC 1028, the essence of benefit in that phrase is given by the word obtains, which in this context should be given a broad, normal meaning connoting a power of disposition or control rather than ownership [41 45]. In many cases it is unclear how many people were involved in the crime, what their roles were, and where the money went. As a result, if the court could not proceed on the basis that the conspirators should be treated as having acquired the proceeds of the crime together, so that each of them obtained the property, it would often be impossible to decide what part of the proceeds had been obtained by any or all of the defendants. It is one thing for the court to have to decide whether a defendant obtained any property, which is required by the 2002 Act. It is another for the court to have to adjudicate on the respective shares of benefit jointly obtained, which is not required [56]. Where property is obtained as a result of a joint criminal exercise, it will often be appropriate for a court to hold that each of the conspirators obtained the whole of that property. However, where the evidence discloses separate obtainings, the judge should make that finding [46 51]. The second question: what is the value of the benefit? A defendant who steals property or obtains it by deception does not acquire ownership of that property. When valuing the benefit the court takes the market value of the property obtained, not because this represents the value of the thiefs legal interest in the goods, but because that is the value of what the thief has misappropriated [61]. The third question: what is the sum payable? To take the same proceeds twice over would not serve the legitimate aim of the 2002 Act and, even if that were not so, it would be disproportionate. The enforcement of an order for the confiscation of proceeds of crime that have already been paid to the state would violate Article 1 of the First Protocol the European Convention on Human Rights, which protects the right to property [71]. |
Scottish Widows Plc (Scottish Widows) is a life assurance company. It was established in 2000, when it acquired the business of Scottish Widows Fund and Life Assurance Society (the Society) under a scheme of transfer which had been approved by the Court of Session in Scotland. Scottish Widows acquired assets under the scheme which had an approximate value of 25bn, and it became subject to actuarial liabilities of approximately 19bn. Members of the Society received compensation of approximately 5.8bn, which represented the surplus of the Societys assets over its liabilities at the time of the transfer. The compensation was paid by Scottish Widows holding company, in return for the members of the Society giving up their right to participate in the surplus. The scheme provided that Scottish Widows was to establish and maintain a Long Term Business Fund (LTBF) to fund its long term insurance business. It also provided that there was to be a memorandum account within the LTBF, called the Capital Reserve. This was said to represent the value of shareholders capital within the LTBF. Life assurance companies are required to submit annual regulatory returns, in particular to demonstrate solvency. Various forms are prescribed for these returns. One these is known as Form 40, which is a revenue account in respect of the LTBF. In the years following transfer the value of the assets of Scottish Widows LTBF fell substantially, principally because of falls in the stock markets. To cover those losses and to allow for distributions to policyholders, Scottish Widows brought into account amounts on Form 40 for each of the accounting periods 2000, 2001 and 2002. These amounts were recorded in line 15 of the relevant Form 40s. They were described as transfers from the Capital Reserve. Section 83 Finance Act 1989 provides for certain sums to be brought into account in the computation of the profits of an insurance company in respect of its life assurance business for the purposes of corporation tax. In the terms that were in force between 2000 and 2003 section 83(2) provided that: [T]he following items, as brought into account for the period of account (and not otherwise), shall be taken into account as receipts of the period (a) the companys investment income from the assets of its long term business fund, and (b) any increase in value (whether realised or not) of those assets. Section 83(3)(a) made provision for ascertaining whether or to what extent a company had incurred a loss in respect of its life assurance business where an amount was added to an insurance companys long term business fund as part of or in connection with a transfer of business to that company. The Revenue maintained that the amounts to be brought into account as receipts for the computation of profits or losses for tax purposes under section 83(2)(b) or, in the alternative, under section 83(3)(a) were the amounts shown in line 15 on Form 40. It maintained that the reference to a difference in value as brought into account directed attention to the figures that had been entered on Form 40, not the market value of the assets of the LTBF. Scottish Widows argued that the words increase in value in section 83(2)(b) meant an increase in the actual value of actual assets, and that the words as brought into account were concerned with when the increase was brought into account, not the extent of the increase. Here the value of the assets of the LTBF had fallen during each of the relevant periods. So there was no increase which could be brought into account. The parties referred the question whether, in computing the Case I profit or loss of Scottish Widows for the accounting periods ending in 2000, 2001 and 2002, the amounts that fell to be taken into account as receipts to the Special Commissioners were the amounts shown in line 15 of Form 40. It was agreed that, if Scottish Widows argument that it is actual values and not those amounts that should be taken into account is correct, it will have allowable losses in respect of those years of 28.7m, 612.6m and 431.3m. The Special Commissioners answered the question in the affirmative. They held that, although the amounts shown on Form 40 were not to be brought into account by section 83(2), they were covered by section 83(3)(a). The Inner House unanimously dismissed the Revenues appeal against the decision on section 83(2) and by majority (Lord Emslie dissenting) dismissed Scottish Widows cross appeal against the decision in respect of section 83(3)(a). Scottish Widows appealed and the Revenue cross appealed. The Supreme Court unanimously allows the Revenues cross appeal and holds that the amounts that were to be taken into account as receipts by virtue of section 83(2) were the amounts shown on Form 40. It therefore answers the question that was referred to the Special Commissioners in the affirmative. Lord Hope and Lord Walker both give detailed judgments. Lady Hale and Lord Neuberger give shorter judgments, agreeing with each other and with Lord Hope and Lord Walker. Lord Clarke agrees with all of the judgments. Although the applicable statutory provisions had been amended on various occasions, it was not helpful to look at their legislative history. That should only be done where there is an interpretative difficulty which classical methods of construction cannot solve. The proper approach was to concentrate on the wording of sections 83(2) and (3)(a) as they were during the relevant accounting periods: [15], [73], [122] [124]. Lord Walker analyses in detail the regulatory and taxation regime which applies to life assurance companies and the particular features of the demutualisation scheme so as to provide a backdrop to the statutory construction: [40] [71]. There were two particularly important points. One was that when completing regulatory returns, book values could be used, and that an insurer enjoyed a certain freedom in determining what amount of its actuarial surplus to recognise in its returns: [82] [86]. It was also particularly important to appreciate the nature of the Capital Reserve. It was not a fund of particular assets, separate from the LTBF, but was merely an accounting category recording an initial value within the LTBF: [87] [91] [101]. The key to interpreting section 83(2) was the phrase as brought into account and, in particular, the use of the word as: [22], [76], [116], [125]. This demonstrated that the computation must proceed on basis of what was actually entered on the appropriate regulatory account, in this case the form known as Form 40. It was important that, when completing its returns, an insurance company should be permitted to use book values: [20]. The various arguments which were advanced in favour of Scottish Widows construction, based on general principles of interpreting tax legislation ([24] [26], [101] [102]), the statutory scheme and specific aspects of the drafting ([23], [107] [112]), fell to be rejected in the face of this clear statutory language. The Special Commissioners and, to some extent, the Court of Session had attached too much weight to the label Capital Reserve, which had led them to attach undue weight to the notion that capital gains ought not to be taxed under Schedule D, Case I: [26], [101]. Given that the Court allows the Revenues cross appeal, a majority preferred to express no view on section 83(3)(a). Lord Hope indicated that, had it been necessary to decide the point, he would have held in agreement with the majority in the Inner House that the relevant amounts would have been covered by section 83(3)(a): [28] [31]. |
The Appellant is a strategic development planning authority for the Aberdeen region. In February 2013, it produced draft supplementary planning guidance in support of its proposed strategic development plan for its area. This guidance allowed for a Strategic Transport Fund (the Fund) to deliver infrastructure needed because of proposed development in four strategic growth areas. In substance, the guidance required developers to enter into planning obligations under the Town and Country Planning (Scotland) Act 1997 (the 1997 Act) with the Appellant to make financial contributions to the Fund. Such contributions were to be pooled and spent on required infrastructure. The Respondent property developer objected to the draft supplementary planning guidance. It sought removal of reference to the Fund from the proposed strategic development plan on the basis that it was contrary to Scottish Government guidance on planning obligations (The Circular). The Respondent asserted that the contribution it was required to pay to the Fund was disproportionate to the infrastructure demands created by its development. In the meantime, the Respondent voluntarily entered into a planning obligation under s75 of the 1997 Act to contribute to the Fund in terms of the draft supplementary guidance but on the basis that no contributions would be paid if the guidance was found to be invalid. The Appellant adopted the supplementary guidance after making an amendment advised by the Scottish Ministers to the effect that the use of any planning obligation should follow the advice in the Circular. As adopted, the supplementary guidance listed the cumulative infrastructure requirements identified by the cumulative transport appraisal (CTA) for the area. These requirements had been revised following criticism by the Reporter appointed by the Scottish Ministers that it had not been demonstrated that there was a clear and direct relationship between the development contributing to the Fund and the infrastructure which would be delivered. Upon appeal by the Respondent, the Inner House of the Court of Session quashed the supplementary guidance on the basis that, notwithstanding the amendments made thereto, the obligation to contribute to the pooled Fund breached the Circular and such a planning obligation must fairly and reasonably relate to the permitted development. The Appellant appealed to the UKSC and argued, amongst other things, that the policy tests in the Circular were not part of the legal tests for the validity of a planning obligation. The Supreme Court unanimously dismisses the Appellants appeal. Lord Hodge gives the lead judgment with which the other Justices agree. An approved strategic development plan is of central importance to planning decisions under the 1997 Act [25]. Supplementary guidance deals with the provision of further information in respect of proposals set out in the plan [24]. Planning obligations in terms of s75 of the 1997 Act do not necessarily need to relate to a particular permitted development on the burdened land. A planning obligation may be entered into in circumstances which are not connected with any planning application [38]. For instance, a planning authority may contract for the payment of financial contributions towards certain infrastructure necessitated by the cumulative effect of various developments, so long as the land which is subject to the obligation contributes to that cumulative effect [41]. However, it is not lawful to restrict the commencement of development by planning obligation until the developer undertakes to make a financial contribution towards infrastructure which is unconnected with the development of the site [42 43]. If such a planning obligation were lawful, an authority could use an application to extract benefits which are unrelated to the proposed development [44]. Moreover, it is not lawful to require contributions towards such infrastructure in a planning obligation which does not restrict the development of the site by means of a negative suspensive condition, as such a planning obligation would neither restrict nor regulate the development of the site in terms of s75 [43]. In determining a planning application, the authority must take into consideration material provisions of the development plan and other material considerations. For a planning obligation to be material it must have some connection with the proposed development which is not trivial [47 48]. If a planning obligation, which is otherwise irrelevant to the application, is sought as a policy in the development plan, the policy seeking to impose such an obligation is an irrelevant consideration for determination of the planning application [51]. In the instant case, the scheme established in the supplementary guidance involved the pooling of payments which were not tied to a particular development [56]. The opt out did not make the scheme voluntary in any real sense [57]. The 1997 Act does not allow for such a scheme. The supplementary guidance and the planning obligations which it promotes are unlawful for two reasons [60]. Firstly, the use of the developers contribution to the pooled Fund on infrastructure with which its development has no more than a trivial connection means that the planning obligation is not imposed for a purpose related to the development and use of the burdened site as required by s75, [61] nor did the planning obligation restrict or regulate the development within the meaning of s75 [62]. Secondly, the planning obligation entered into by the Respondent was an irrelevant consideration in terms of a planning application because there was only a trivial connection between the development and the infrastructure intervention(s) which the proposed contribution would fund. An authority is not empowered to require a developer to enter into an obligation which would be irrelevant to an application for permission as a precondition of the grant of that permission [63]. The scheme was not unlawful because it did not comply with the Circular. The Circular was simply a material consideration which was required to be taken into account but not necessarily followed [53 54; 60]. |
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