Judgments - Regina v. Secretary of State for the Environment, Transport and the Regions and Another, Ex Parte Spath Holme Limited On 7 December 2000

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    Lord Simon and Lord Diplock went on to warn against a simplistic approach to construction based on an assumption that the draftsman has sought to remedy one mischief only (or, in other words, that an Act has only one statutory objective). At p. 393 they said:

    "For a court of construction to constrain statutory language which has a primary natural meaning appropriate in its context so as to give it an artificial meaning which is appropriate only to remedy the mischief which is conceived to have occasioned the statutory provision is to proceed unsupported by principle, inconsonant with authority and oblivious of the actual practice of parliamentary draftsmen. Once a mischief has been drawn to the attention of the draftsman he will consider whether any concomitant mischiefs should be dealt with as a necessary corollary."

    Reliance was also placed on the speech of Lord Wilberforce in Farrell v. Alexander [1977] AC 59 at 72 where he said:

    "I would agree and endorse the principle that it is quite wrong that, in every case where a consolidation Act is under consideration, one should automatically look back through the history of its various provisions, and the cases decided upon them, and minutely trace the language from Act to Act - a process which, incidentally, has led to an argument of four days' length in this House."

    Mr. Bonney relied on other authorities. We were referred to Reg. v. Schildkamp [1971] AC 1, where the issue turned on the construction of a section of the Companies Act 1948. At p. 22G Lord Upjohn said:

    "The argument of counsel for the appellant was straightforward. Reading subsection (3) he submits truly that its terms are perfectly clear and simple. There is no ambiguity; the subsection clearly applies so as to create an offence on the part of a person knowingly carrying on a business - with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, and the circumstance that the company may subsequently have been wound up is quite irrelevant. The subsection plainly applies as a matter of language to the case where there has been no subsequent winding up. Looking at that subsection alone, I agree. Naturally he relies upon the contrast between subsection (1) where there is a reference to winding up and subsection (3) where there is not; a point to which I shall return later.

    "But, my Lords, this, in my opinion, is the wrong approach to the construction of an Act of Parliament. The task of the court is to ascertain the intention of Parliament; you cannot look at a section, still less a subsection, in isolation, to ascertain that intention; you must look at all the admissible surrounding circumstances before starting to construe the Act. The principle was stated by Lord Simonds in Attorney-General v. Prince Ernest Augustus of Hanover [1957] A.C. 436, 461:

    'For words, and particularly general words, cannot be read in isolation: their colour and content are derived from their context. So it is that I conceive it to be my right and duty to examine every word of a statute in its context, and I use 'context' in its widest sense, which I have already indicated as including not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those other legitimate means, discern the statute was intended to remedy.'

    "So I look to the Companies Act, 1948, as a whole and the very first thing that I notice from the Long Title is that it is a consolidation Act. Therefore, bearing in mind that a consolidation Act is presumed not to alter the law, it becomes material to trace this subsection to its original source."

    Lord Upjohn then traced a section of the 1948 Act back to its origin in earlier Acts, and observed at p. 23G:

    "Nevertheless, in my opinion, the problem is essentially a question of construction of the 1928 Act and not the 1948 Act, for it was the former that created the new concept of making directors liable for the fraudulent trading of a company and the true scope and ambit of that liability, whether civil or criminal, must be determined by considering the terms of that Act and not of the subsequent consolidation Acts.

    "My Lords, the arguments of counsel for the appellant upon section 75(3) are, of course, precisely the same as upon section 332(3) but, for the reasons I have already given, in my opinion, are based upon the wrong approach; one must consider the whole of the 1928 Act before trying to ascertain and determine the true scope of section 75(3) thereof."

    Mr. Bonney also referred us to Lord Simon of Glaisdale's speech in Farrell v. Alexander, at p. 83 where he said:

    "This does not mean that the initial approach to the construction of a 'pure' consolidation Act must be via the statutes it has replaced. On the contrary, it is the consolidation Act itself which falls for interpretation. The initial judicial approach is the same as with the interpretation of any other statute. The judge places himself, as the saying goes, in the draftsman's chair. He will ascertain what facts were within the draftsman's knowledge, and what statutory objective he had both generally and as to the particular provision to be construed. The facts available to the draftsman of a consolidation Act will be all those which had been available to the draftsmen of the enactments to be consolidated. These facts and (closely related) the statutory objectives will generally be obvious from the statute falling for construction itself; but the court may, in default or by way of supplement or confirmation, have recourse to matters of which judicial notice may be taken or to official reports in the light of which any part of the legislation has been framed . . . The judge will then ascertain and tune in to the linguistic register of the statute: see Maunsell v. Olins [1975] A.C. 373, 391-392. Having done all this the judge will be in a position to read the statutory language in the primary and most natural sense which it bears in its context. Since the draftsman will himself have endeavoured to express the parliamentary meaning by words used in the primary and most natural sense which they bear in that same context, the court's interpretation of the meaning of the statutory words used should thus coincide with what Parliament meant to say.

    "There is one rare situation in which it is permissible for - indeed, incumbent on - the court to construe a consolidation Act at this primary stage of construction by reference to a consolidated enactment. This is where the purpose of a statutory word or phrase can only be grasped by examination of the social context in which it was first used. George Hensher Ltd. v. Restawile Upholstery (Lancs.) Ltd.[1976] A.C. 64 provides an example. The phrase 'work of artistic craftsmanship' in the Copyright Act 1956 could only be properly understood by investigating the social and aesthetic circumstances in which it was first used in the Copyright Act 1911. (The Act of 1956, though not a consolidation Act, was relevantly in pari materia)."

    Finally, Mr. Bonney placed reliance on Johnson v. Moreton [1980] AC 37. At p. 56 Lord Hailsham of St Marylebone said:

    "This Act is a consolidating Act to which the observations of a majority of your Lordships in Farrell v. Alexander [1977] A.C. 59, 72 (Lord Wilberforce), 82 (Lord Simon of Glaisdale) and 97 (Lord Edmund-Davies) clearly apply. Even if I were not bound by these observations I would respectfully agree with them. In my view the whole purpose of consolidation would be defeated if they were not observed and rigidly adhered to or if endeavours were made to split the various components of the consolidation Act apart and construe them by reference to their individual histories. If, in the course of these remarks, I refer to the history of the legislation before and after 1948 it is not in order to construe the words of the Act, which, as will be seen, are in my view unambiguous as they stand, but simply to place them in their proper historical and social context as at 1948."

In the same case at p. 62 Lord Simon of Glaisdale said:

    "The 1948 statute was a consolidation Act. Any provision in it must therefore be construed in the context of the whole of the statute in which it now stands (Farrell v. Alexander [1977] A.C. 59); though it is legitimate (indeed, incumbent) to investigate the statutory history in so far as that throws light on the objective of a particular provision (at p. 84); the ascertainment of the parliamentary objective is an important - generally, an essential - part of the process of statutory interpretation."

    From these authorities, it is plain that courts should not routinely investigate the statutory predecessors of provisions in a consolidation statute, particularly where (as in Maunsell v. Olins, and Farrell v. Alexander) the issue concerns the construction of a single word or expression. Such a practice would reduce the benefit to be derived from the process of consolidation (although the advantage of gathering scattered, and often amended and re-amended, provisions together in a coherent sequence in a single statute should not be underrated). But the overriding aim of the court must always be to give effect to the intention of Parliament as expressed in the words used. If, even in the absence of overt ambiguity, the court finds itself unable, in construing the later provision in isolation, to place itself in the draftsman's chair and interpret the provision in the social and factual context which originally led to its enactment, it seems to me legitimate for the court - even, as Lord Simon said, incumbent on it - to consider the earlier, consolidated, provision in its social and factual context for such help as it may give, the assumption, of course, being (in the absence of amendment) that no change in the law was intended. I agree with the Court of Appeal that it is, in the present case, appropriate to consider the statutory predecessor of section 31.

    The 1985 Act did not itself repeal any earlier statutory provision. It was, however, one of three consolidating statutes passed in that year in the housing field, and the repeals, consequential amendments, transitional matters and savings in connection with each of the three were contained in a fourth Act, the Housing (Consequential Provisions) Act 1985, which provided for repeal of the whole of the Housing Rents and Subsidies Act 1975 ("the 1975 Act"). While the propriety of referring to the provision consolidated in section 31 was in issue between the parties to this appeal, it was accepted that the provision which section 31 consolidated was section 11 of the 1975 Act. This section was preceded by a heading "Rent - general power" and carried a sidenote "Reserve power to limit rents". It provided in full;

    "(1) An order may provide for restricting or preventing increases of rent for dwellings which would otherwise take place, or for restricting the amount of rent which would otherwise be payable on new lettings of dwellings.

    (2) The supplemental and incidental provisions that may be made by an order under this section may include provisions excluding, adapting or modifying any provision contained in or having effect under any Act which relates to rent (including this Act and any Act passed after it), and in particular provisions for the recovery of overpaid rent.

    (3)An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

    (4)Upon the coming into force of this subsection, the power to make orders under section 11 of the Counter-iInflation Act 1973 (general power to make orders restricting or preventing increases of rent) shall cease to include power to make orders relating to rent for dwellings; but the coming into force of this subsection shall not affect the validity of anything done, whether before or after the coming into force of this subsection, by virtue of any order under the said section 11.

    (5)The Counter-Inflation (Private Sector Residential Rents) (England and Wales) Order 1974 and the Counter-Inflation (Private Sector Residential Rents) (England and Wales) No. 2 Order 1974 are revoked, and the standstill period under the first order (which was extended by Article 3 of the second order) shall terminate on the coming into force of this subsection.

    (6)Notwithstanding the revocation of the orders -

(a)

    Article 5 of the first order (recovery of excess rent) shall continue to have effect, for the purposes of both orders, so as to enable a tenant to recover rent at any time during which he would have been able to recover it if the orders had not been revoked, and

(b)

    Article 8 of that order (jurisdiction of the county court) shall continue to have effect, for the purposes of both orders, in respect of any proceedings commenced before the expiry of a period of two years from the date of the revocation.

    (7)Paragraphs (a) and (b) of subsection (6) above shall continue to have effect during the periods specified in them, whether or not Part II of the Counter-Inflation Act 1973 (under which the two revoked orders were made) is in effect.

    (8)Notwithstanding the revocation of the orders, the rent recoverable under a regulated tenancy of a dwelling-house in respect of a contractual period beginning before but ending after the revocation shall not exceed the amount which, by virtue of the orders, was the counter-inflation limit for the dwelling-house immediately before the revocation.

    (9)Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the orders as it applies to an enactment which is repealed by another Act.

    (10)For the purposes of this section an increase in rent takes place at the beginning of the rental period for which an increased rent is payable.

    (11) In this section -

    'dwelling' does not include a dwelling forming part of a property subject to a tenancy to which Part II of the Landlord and Tenant Act 1954 (business tenancies) applies (but without prejudice to the application of this section in relation to a sub-tenancy of any part of the premises comprised in such a tenancy;)

    'local authority' includes a county council;

    'new letting' includes any grant of a tenancy, or agreement to grant a tenancy, whether or not the premises were previously let, and any grant of a licence;

    'rent' includes any sum payable under a licence but does not include any sum attributable to rates, or, in the case of dwellings of local authorities or new town corporations, to the use of furniture, or the provision of services."

This section, as its terms made plain, replaced the power previously conferred by section 11 of the Counter-Inflation Act 1973, which itself replaced the power conferred by section 2(4) of the Counter-Inflation (Temporary Provisions) Act 1972. This context, as Mr. Bonney submitted and the Court of Appeal accepted, showed that the power in section 11 of the 1975 Act, and therefore section 31 of the 1985 Act, was conferred, and conferred only, to enable the minister to restrict rents where such represented a significant cause of general inflation. This was the foundation of Mr. Bonney's central argument that the Order was ultra vires, since the ministers in making it were not seeking to curb general inflation in the national economy.

    It is a matter of historical record that in the early and mid-1970s excessive inflation in the national economy was recognised as a major threat to the economic health and social cohesion of the nation. The Acts of 1972 and 1973 to which I have referred were passed to counter that threat, and I think it plain from the terms of section 11 of the 1975 Act that it conferred a power to restrict rents where such represented a significant cause of general inflation. The more difficult, and for present purposes more crucial, question is whether that was the only purpose for which the section 11 power could be lawfully exercised. A number of considerations lead me to conclude that the power could in appropriate circumstances be used for other purposes as well:

(1)

Whereas the Acts of 1972 and 1973 were expressly and exclusively directed to countering inflation, the Act of 1975 was not. It repealed, in section 1, provisions of the Housing Finance Act 1972, which had changed the basis on which local authorities and new town corporations had determined their rents, and had led to their increasing such rents. It provided for the payment of subsidies to local authorities and new town corporations. It made provision for the phasing of increases of rent of certain registered regulated tenancies not covered by existing phasing provisions. It amended, in a way favourable to tenants, the basis on which fair rents were to be assessed. It reversed the decontrol of certain tenancies. It permitted increases in the rent of controlled tenancies to reflect the value of repairs effected by the landlord or any superior landlord. The 1975 Act accordingly contained a number of provisions, generally protective of tenants, no doubt reflecting at least a partial change of political priorities consequent upon a change of government. No reference was made to inflation or counter-inflation in the long title of the Act nor in the body of the Act itself, save where reference was made to the short titles of previous Acts and the orders made under those Acts.

(2)

In marked contrast with the Acts of 1972 and 1973, the 1975 Act did not provide that the powers exercisable under it should cease to be exercisable after the expiration of a specified period of time. If, when inflation was at its most threatening, Parliament thought it desirable to impose a strict time - limit on the exercise of ministerial powers, it is difficult to see any reason why, in 1975, that safeguard should have been thought unnecessary if inflation alone could justify exercise of the powers.

(3)

If Parliament had intended in 1975 to restrain the exercise of the section 11 power save for the purpose of countering inflation, I would expect the section to have been drafted, in the context of this Act, so as to make much more specific reference to that limitation.

(4)

Section 11 of the 1975 Act did not simply consolidate any earlier enactment.

I would not therefore hold, differing with respect from the Court of Appeal, that the scope of section 11 (and thus of section 31) was or is limited in the way for which Mr. Bonney contended. Section 11 conferred a reserve power, to be exercised by the minister if he reasonably judged it necessary or desirable to protect tenants from hardship caused by increased or excessive rents. To treat countering inflation as the sole mischief at which section 11 was directed is to fall into the fallacy identified by Lord Simon and Lord Diplock of treating a single identified mischief as the only mischief.

    If, contrary to his main submission, the language and context of section 11 did not resolve the issue of interpretation in his favour, Mr. Bonney submitted that it was appropriate, on the authority of Pepper v. Hart [1993] AC 593, to refer to statements in Parliament which made plain that the scope of section 11 was intended to be limited in the way for which he contended. Mr. Parker, for the ministers, submitted that reference should not be made to Hansard, but also that, if reference were made, it was clear that the scope of section 11 was not intended to be so limited. Thus the threshold question arises whether, in this case, resort to Hansard should be permitted.

    In Pepper v. Hart the House (Lord Mackay of Clashfern L.C. dissenting) relaxed the general rule which had been understood to preclude reference in the courts of this country to statements made in Parliament for the purpose of construing a statutory provision. In his leading speech, with which all in the majority concurred, Lord Browne-Wilkinson made plain that such reference was permissible only where (a) legislation was ambiguous or obscure, or led to an absurdity; (b) the material relied on consisted of one or more statements by a minister or other promoter of the Bill together, if necessary, with such other parliamentary material as might be necessary to understand such statements and their effect; and (c) the effect of such statements was clear (see pp. 640B, 631D, 634D). In my opinion, each of these conditions is critical to the majority decision:

(1)

Unless the first of the conditions is strictly insisted upon, the real risk exists, feared by Lord Mackay, that the legal advisers to parties engaged in disputes on statutory construction will be required to comb through Hansard in practically every case (see pp. 614G, 616A). This would clearly defeat the intention of Lord Bridge of Harwich that such cases should be rare (p. 617A), and the submission of counsel that such cases should be exceptional (p. 597E).

(2)

It is one thing to rely on a statement by a responsible minister or promoter as to the meaning or effect of a provision in a bill thereafter accepted without amendment. It is quite another to rely on a statement made by anyone else, or even by a minister or promoter in the course of what may be lengthy and contentious parliamentary exchanges, particularly if the measure undergoes substantial amendment in the course of its passage through Parliament.

(3)

Unless parliamentary statements are indeed clear and unequivocal (or, as Lord Reid put it in Reg. v. Warner [1969] 2 AC 256 at 279E, such as "would almost certainly settle the matter immediately one way or the other"), the court is likely to be drawn into comparing one statement with another, appraising the meaning and effect of what was said and considering what was left unsaid and why. In the course of such an exercise the court would come uncomfortably close to questioning the proceedings in Parliament contrary to article 9 of the Bill of Rights 1689 and might even violate that important constitutional prohibition.

It has been argued that the stringent conditions laid down by the House in Pepper v. Hart were not satisfied in that very case; see Bennion on Statutory Interpretation (3rd ed., 1997) at pp. 483-485. That is not a view I could accept; there was a difference of judicial opinion when the matter was first argued in the House and there were very clear statements on the point at issue by the responsible minister. But the case turned on a narrow point, the meaning of "the cost of a benefit" in section 63(2) of the Finance Act 1976. The minister gave what was no doubt taken to be a reliable statement on the meaning of that expression. Here the issue turns not on the meaning of a statutory expression but on the scope of a statutory power. In this context a minister might describe the circumstances in which the government contemplated use of a power, and might be pressed about exercise of the power in other situations which might arise. No doubt the minister would seek to give helpful answers. But it is most unlikely that he would seek to define the legal effect of the draftsman's language, or to predict all the circumstances in which the power might be used, or to bind any successor administration. Only if a minister were, improbably, to give a categorical assurance to Parliament that a power would not be used in a given situation, such that Parliament could be taken to have legislated on that basis, does it seem to me that a parliamentary statement on the scope of a power would be properly admissible.

    I think it important that the conditions laid down by the House in Pepper v. Hart should be strictly insisted upon. Otherwise, the cost and inconvenience feared by Lord Mackay, whose objections to relaxation of the exclusionary rule were based on considerations of practice not principle (see p. 615G), will be realised. The worst of all worlds would be achieved if parties routinely combed through Hansard, and the courts dredged through conflicting statements of parliamentary intention (see p. 631F), only to conclude that the statutory provision called for no further elucidation or that no clear and unequivocal statement by a responsible minister could be derived from Hansard. I would further draw attention to the terms of Practice Direction (Hansard: Citation) [1995] 1 WLR 192 and Practice Direction (House of Lords: Supporting Documents) [1993] 1 WLR 303.

    Since, for reasons I have already given, I do not regard the meaning or effect of section 11 as ambiguous or obscure or such as to give rise to absurdity, and the unease I felt on reading section 31 in isolation has been dispelled by considering section 11 in its social and factual context, I do not for my part find that the first threshold test for resorting to Hansard is met. In this, as in most cases, the statute should be treated as "the formal and complete intimation to the citizen of a particular rule of the law which he is enjoined, sometimes under penalty, to obey and by which he is both expected and entitled to regulate his conduct" (per Lord Oliver of Aylmerton, Pepper v. Hart, at 619H). The present case illustrates the dangers of weakening this first threshold test. The House has been referred, as was the Court of Appeal, to a number of statements by several ministers with responsibility for the Bill. Understandably enough, they used different expressions, particularly when responding to points made in debate. Spath Holme have placed particular reliance on statements by ministers linking section 11 to inflation and the government's counter-inflation policy. The ministers have placed particular reliance on statements suggesting that the section could be used for other purposes as well. It is hard to judge the significance of these statements without reading the debates to discover what were the points to which ministers were responding. Reading the debates, one finds that the thrust of the Bill was modified and widened during its passage through Parliament. But nowhere did ministers give a categorical assurance that section 11 would not be invoked save to counter excessive inflation, and nowhere did ministers attempt to give a comprehensive legal definition of what section 11 meant. In my view, the third threshold test under Pepper v. Hart, is not satisfied in this case: there was no clear and unequivocal statement to the effect for which Spath Holme contended.

Additional points

    Before the Court of Appeal and the House Spath Holme relied on a number of additional grounds for impugning the lawfulness of the Order. The Court of Appeal did not accept these arguments, and nor would I. I give my reasons for rejecting them briefly.

Ground 1

    This ground rested on the reference in section 31 to "dwellings" and the definition of "dwelling" in section 38 of the 1985 Act to mean

    "a building or part of a building occupied or intended to be occupied as a separate dwelling, together with any yard, garden, outhouses and appurtenances belonging to it or usually enjoyed with it."

This definition, it was submitted, defined a dwelling in terms of its physical attributes, but the Order wrongly restricted rent increases by reference to the characteristics of the tenancy to which the dwelling was subject. The Court of Appeal rejected this approach as too narrow, pointing out that the exclusion in section 32(3) was directed to the legal character of the tenancy and not the physical attributes of the dwelling. I agree. There is no reason to constrain the very broad statutory language in the way suggested. The words "either generally or in relation to any specified description of dwelling" were in my view intended to preclude use of the section to target particular local authorities or landlords.

Ground 2

 
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