Judgments - Regina v. Secretary of State For Health and Others, Ex Parte Imperial Tobacco Limited and Others On 7 December 2000

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    My Lords, I have formed the clear view that upon the principal matter in dispute the decisions of Turner J. and Laws L.J. were right and that it would not be in the interests of justice to leave the point to be argued in a later appeal. I can see the advantages to the Secretary of State in facing future litigants with the prospect of having to bring the matter before your Lordships in order to have the authority of the Court of Appeal's decision overturned. But I do not think that this would be fair.

    In order to decide whether the court was required by Community law to apply the principles stated in Zuckerfabrik, it is necessary to examine the reasoning of the Court of Justice in that case. It concerned a Council Regulation forming part of the common agricultural policy which imposed various levies on sugar manufacturers. The Customs Office at Itzehoe in Schleswig-Holstein made a decision that Zuckerfabrik Süderdithmarschen ("Zuckerfabrik"), a sugar manufacturer, was liable to pay about DM 2 million as "special elimination levy" pursuant to the Regulation. Zuckerfabrik claimed that the Regulation was invalid and applied to the Revenue Court in Hamburg for an interlocutory order suspending enforcement of the Customs Office order pending a preliminary ruling by the Court of Justice. The court also referred the questions of whether it had jurisdiction to make such an interlocutory order and the conditions upon which it could do so. In particular, it asked whether a uniform Community criterion existed or whether the matter should be decided according to national law.

    There is no doubt that the Regulation, if valid, was immediately and directly applicable in Germany. The decision of the Customs Office were merely an administrative order giving effect to the requirements of the Regulation. The Court of Justice said that justice required national courts to have jurisdiction to suspend the enforcement of a Community regulation pending a decision on its validity. The right of individuals in Member States to challenge the validity of Community regulations would be compromised if -

    "pending delivery of a judgment of the court, which alone has jurisdiction to declare that a Community regulation is invalid (see judgment in Foto-Frost v. Hauptzollamt Lubeck-Ost Case 314/85 [1987] E.C.R. 4199, at para. 20), individuals were not in a position, where certain conditions are satisfied, to obtain a decision granting suspension of enforcement which would make it possible for the effects of the disputed regulation to be rendered for the time being inoperative as regards them." (p. I-541, para.17.)

    The court then went on to consider what conditions should be satisfied, and in particular, whether those conditions should be left to national law or be uniform throughout the Community. It decided on uniformity and it is important to note the reason. The court said in paragraphs 25-26, at p. I-542, that otherwise, differences in the criteria applied by national courts "may jeopardise the uniform application of Community law...Such uniform application is a fundamental requirement of the Community legal order." The obligation of the national courts to adopt uniform criteria is thus one facet of the general obligation of a Member State, as expressed for example in article 5 (now article 10 E.C.), to take all appropriate measures "to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community."

    The court went on to say that the criteria applied by a national court should be the same as those applied by the Court of Justice in exercising its power under article 185 (now article 242 E.C.) to suspend the operation of a contested Community act in actions to annul such acts brought before the court itself under article 173 (now article 230 E.C.)

    The question is therefore whether the reasoning in Zuckerfabrik can be extrapolated from the case in which it is sought to suspend the enforcement of a Community regulation which is prima facie enforceable to the case in which it is sought to suspend national legislation made to implement a directive which is not yet enforceable. Is there the same need for uniform criteria? This must in my opinion depend upon whether, in such a situation, differences in national criteria would jeopardise the uniform application of Community law.

    In my view it is obvious that during the implementation period, differences in national criteria for the grant of interlocutory relief cannot jeopardise the uniform application of Community law. This is because Community law does not require uniform implementation of the directive before the implementation date. The Member State has only the negative obligation stated in Inter-Environnement Wallonie ASBL v. Région Wallonne (Case C-129/96) [1997] E.C.R. I-7411, 7449, para. 45, to "refrain from taking any measures liable seriously to compromise the result prescribed." It is not disputed that the executive or legislative branches of government of a Member State can delay the implemention of a directive until the end of the implementation period for any reasons of politics or expedience which they think fit. No one suggests that this would be a breach of their obligations under article 5 or jeopardise the uniform application of Community law. To object to the judicial branch of government delaying implementation on the narrow ground that, according to national criteria, the interests of justice so require, seems to me to swallow a camel and strain at a gnat.

    The argument for the Secretary of State comes to saying that Community law requires the judiciary of a Member State to defer to the executive on the question of when the Directive should be implemented. Once the executive had decided that the Directive should be implemented, the judiciary comes under a Community law obligation to co-operate and should behave as if the Directive were already enforceable. In this way it is argued that enforcement can be suspended only if the Zuckerfabrik criteria are satisfied.

    In my opinion this argument is mistaken. There is no authority for the proposition that Community law is concerned with the relations between the different branches of government of a Member State. On the contrary, Community law is indifferent to the internal arrangements of power within a Member State. The obligations of Community law are imposed on all the organs of government of the Member State. It is in accordance with this principle that the duty of a Member State to give effect to a directive applies not only to its legislature or executive, which would, under the national constitution, ordinarily have the power to take the necessary measures, but also to its judiciary. This is the basis of the famous principle in Marleasing S.A. v. la Comercial Internacional de Altmentación S.A. (Case C-106/89) [1990] E.C.R. I-4135, I-4159, para. 8:

    "the Member States' obligation arising from a directive to achieve the result envisaged by the directive and their duty under article 5 of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts. It follows that, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of article 189 of the Treaty."

    Contrariwise, if a Member State is not under a duty to implement a directive, then no such duty is binding upon any of the authorities of that Member State. As a matter of domestic English law, the fact that the Secretary of State has decided to exercise the power to make the regulations is something to be taken into account in weighing the public interest element to be put into the scale of the balance of convenience. It is he who is prima facie entrusted by section 2(2) of the Act of 1972 with the duty of deciding when the public interest requires the regulations to be made. A similar point was discussed in Hoffmann-La Roche (F.) & Co. A.G. v. Secretary of State for Trade and Industry [1975] A.C. 295. But Community law has nothing to say on the matter.

    My Lords, I turn now to examine the contrary arguments advanced by the majority of the Court of Appeal. They are conveniently listed in the judgment of Ward L.J.

    1. The application for interlocutory relief is based upon the proposition that the Directive is invalid in Community law. It is therefore inconsistent for the appellants to claim that their application should be determined according to principles of English law. This is put forward without reference to any rule or policy of Community law but as a straightforward matter of syllogistic logic. In my opinion it is fallacious. The appellants challenge the proposed regulations as ultra vires the powers conferred by the European Communities Act 1972. That challenge raises a question of European law only because section 2(2) of the Act makes the validity of the regulations dependent upon the existence of a Community obligation. So one of the factors which must be considered in deciding whether to grant interlocutory relief is an assessment of the likelihood that the European Court will hold that the Directive is invalid and that no Community obligation exists. But there is nothing unusual about interlocutory relief depending upon an assessment of the likelihood that something will happen. The fact that the event in question is a decision of the European Court does not in itself convert the question of whether to grant interlocutory relief into a question of European law. If, for example, a litigant bringing proceedings in Germany applies for ancillary relief in England (a freezing order, for example) the court will have to form a view on his chances of success in the German court according to German law. But that does not mean that the question of whether to grant interlocutory relief must be decided according to German law.

    2. The ultimate objective of the proceedings is to have the Directive declared invalid and this is a matter of Community law. Therefore the case is "redolent of European law." This is the same argument as I have just rejected. Redolence is too vague a criterion for making a choice of law.

    3. The outcome should not turn upon whether the regulations had been made before the judicial review proceedings were commenced. In general, I would agree, although the fact that the regulations have been brought into force may be a factor which affects the balance of convenience. But that has nothing to do with whether the question of whether the matter should be decided according to principles of Community or domestic law.

    4. If the Court of Justice, which is seised of the matter, were to be asked to grant interim relief, it would do so according to principles of Community law. Therefore a national court considering the same question should also do so. This is in my opinion a false analogy because it is not comparing like with like. The appellants would have no locus standi to ask the Court of Justice for an interim order suspending the operation of the Directive in Community law. Nor do they need to do so. They are perfectly satisfied with the present interim position under which the Directive does not become enforceable in Community law until 30 July 2001. What they want is an interim order suspending the operation of the domestic regulations. The Court of Justice has no jurisdiction to grant such an order. The enforcement of the regulations are a matter for national law which, as Advocate General Fennelly put it, raises only collaterally the validity of the Directive: see paragraph 33 of his opinion. The suspension of the enforcement of the Directive and the suspension of the enforcement of the regulations in the period before the Directive become enforceable are altogether different questions.

    5. The Directive empowers the Government to implement the Directive at any time before the implementation date. An injunction would fetter a right granted to the Government by European law and therefore affects the European interest. This in my opinion is also fallacious. The Directive confers no powers upon the Government. All that it does is to impose obligations upon the United Kingdom as a Member State. The powers of the executive branch of government of the United Kingdom are entirely a matter of domestic law. It is section 2(2) of the Act of 1972 which confers legislative power upon Her Majesty in Council and the Secretary of State. There is no need, as a matter of Community law, for the executive to avail itself of section 2(2) or for section 2(2) to exist. The legislative branch of government could discharge the Community obligations of the United Kingdom by enacting primary legislation. The fact that the government has power to do so under section 2(2) is a matter of domestic convenience. Parliament has chosen to make this power conditional upon the existence of a Community obligation and it is for this reason only that the validity of the Directive is collaterally involved.

    6. Zuckerfabrik does not suggest that the test differs according to whether or not the regulations have already been enacted. I agree. This is the same as point 3. But it does not affect the question of whether, either before or after the enactment of the regulations, but before the implementation date, the question should be decided according to English or Community law.

    The reasons given by Lord Woolf M.R. were substantially the same.

    My Lords, for the reasons I have given above, I think that with all respect to the contrary views of the majority of the Court of Appeal it is plain and obvious, acte claire, that European law does not apply to the question of whether Turner J. should have granted the order which he did. European law was involved in the case only by virtue of a renvoi from section 2(2) and not in its own right. In the circumstances it is unnecessary for me to express any view upon whether the Zuckerfabrik criteria are different from those which are applied in English domestic law. If the question had been necessary for your Lordships' decision, I would have proposed that it be referred to the European Court of Justice.

    At conclusion of the argument I would have allowed the appeal and restored the order of Turner J. In the events which have happened, it is unnecessary to do more than propose that, your Lordships make no order other than to order that the Secretary of State pay the appellants' costs in this House and the Court of Appeal.


My Lords,

    At the close of the argument in this appeal I believed that a confident answer could be safely returned to the question whether English law or Community law should apply in the granting of an injunction against the making of the regulations in this case. My inclination was to hold that this was a matter purely of national law and that the conditions for relief should be those established under English law. However, having had the advantage of reading the speech which has been prepared by my noble and learned friend Lord Slynn of Hadley and having reconsidered in particular the observations of the Court of Justice in Zuckerfabrik Suderdithmarschen A.G. v. Hauptzollamt Itzehoe (Joined Cases C-143/88 and C-92/89) ([1991] E.C.R. 1-145) I have come to the conclusion that the point is not so clear that it can be properly resolved without the guidance of the Court of Justice. While I share the regrets which have been expressed at leaving the matter without a final determination I am persuaded that the present situation is one where a reference would be proper, particularly where the point is plainly open to serious differences of view.

    I agree that an order should be made in the terms proposed by Lord Slynn of Hadley.


My Lords,

    I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Hoffmann. I agree both with his conclusion and with his reasons for giving them. I wish, however, to add some observations of my own in regard to two matters.

    The first is a matter of Community law. I share the concern expressed by my noble and learned friend Lord Nicholls of Birkenhead that the national court should not interfere with the operation of a directive during the implementation period. Where I respectfully differ from him is that I do not consider that it does so by making an order which allows the directive to be implemented in full by the end of that period. Moreover I believe that this much is acte claire.

    I do not consider that the question which troubles Lord Nicholls can be answered in the abstract. It can only be answered by reference to a particular order which the national court proposes to make. The Court of Justice cannot sensibly decide whether a Member State is proposing to act inconsistently with the Community legal order unless it knows what it is that the Member State is proposing to do or refrain from doing. If it is told that the Member State proposes to implement the directive in full before the end of the implementation period save only insofar as it is prevented from doing so by an order of its national court, the Court of Justice will need to see the order. In my view compliance with the Community legal order requires the national court to refrain from placing any obstacle in the way of full implementation of the directive by the end of the implementation period, but it does no more than this. The best way of satisfying this requirement is for the national court to ensure that its order does not interfere with the power of the national authorities during the implementation period to take all such steps as may be necessary to implement the directive short of actually bringing it into force before the end of that period.

    The second is a matter of our own domestic law. I wish to express my profound disagreement with some of the observations made by the Court of Appeal in regard to what they saw as an impermissible attempt to interfere with the government's legislative programme. This raised an important constitutional issue concerning the relationship between the executive and the judiciary. The relevant constitutional doctrine is encapsulated in a passage from Dworkin's Law's Empire (1998) at p. 9:

    "The Rule of Law requires that State coercion shall always be backed by law. The State's force must not be used or withheld, no matter how useful that would be to the ends in view, no matter how beneficial those ends, except as licensed or required by law - i.e. by valid legislation or decisions of the Courts having the effect of making law."

It is the responsibility of the judges to ensure that this principle is observed and to enquire into the validity of any law which is invoked by the state to support its actions.


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