Wilson and others v. Secretary of State for Trade and Industry (Appellant)
178. First County did not appeal, but the Secretary of State appealed, on a number of grounds, against the Court of Appeal's order making the declaration of incompatibility. I respectfully agree with Lord Nicholls of Birkenhead as to the disposal of all these grounds of appeal and, in particular, with what my noble and learned friend, Lord Hobhouse of Woodborough, has said on the use of Hansard. I confine my observations accordingly to the one matter, "retrospectivity". At the outset, it may be useful to recall some general features of the 1998 Act.
General features of the 1998 Act
179. The 1998 Act is beautifully drafted. Its structure is tight and elegant, being marred only by the obvious interpolation of sections 12 and 13 as a result of amendments made while the Bill was passing through Parliament. The presence or absence of particular features in the Act is therefore unlikely to be due to oversight.
180. Although the Act is not entrenched, the Convention rights that it confers have a peculiar potency. Enforcing them may require a court to modify the common law. So far as possible, a court must read and give effect to statutory provisions in a way that is compatible with them. Rights that can produce such results are clearly of a higher order than the rights which people enjoy at common law or under most other statutes.
181. It is well recognised, however, that Convention rights are to be seen as an expression of fundamental principles rather than as a set of mere rules. In applying the principles the courts must balance competing interests. So much was made clear, for example, by my noble and learned friend, Lord Hope of Craighead, in R v DPP, Ex p Kebilene  2 AC 326, 384B - C. Therefore, when deciding whether the order sought by one private party would infringe a Convention right of the other, a court must balance the interests of both parties. If the court finds that the order would infringe the Convention right of the party against whom it would be made, this can only be because the court has concluded that his interests are to be preferred to any competing interests of the party seeking the order. In particular, the court must have concluded that the Convention right of the party resisting the order is to be preferred to the other party's common law or statutory right to obtain it.
182. The 1998 Act is unusual - perhaps unique - in its range. While most statutes apply to one particular topic or area of law, the 1998 Act works as a catalyst across the board, wherever a Convention right is engaged. It may affect matters of substance in such areas as the law of property, the law of marriage and the law of torts. Or else it may affect civil and criminal procedure, or the procedure of administrative tribunals.
183. Unlike some statutes, the 1998 Act did not arrive on the scene unheralded. The Bill embodied a flagship policy of the government and the date for the commencement of the Act was announced well in advance. During the long period between Royal Assent and commencement, not only the legal profession but public authorities also could prepare for the day when people would enjoy Convention rights within the three domestic legal systems and when public authorities would have to respond to that new situation.
184. When the 1998 Act did eventually come into force, inevitably it was in a world where events and transactions had been taking place and legal proceedings of various kinds were in progress. Naturally, questions arose as to how the new Act fitted into this world. For all but two of these questions, the draftsman has, deliberately, left it to the courts to supply the answers. Although counsel confined their argument to sections 3 and 4, for reasons which will become apparent, I consider that the issues relating to the application of these sections are best considered in the context of the 1998 Act as a whole.
185. In dealing with the more general aspects of the difficult topic of "retrospectivity", I have derived particular benefit from studying P-A Côté, The Interpretation of Legislation in Canada, 3rd ed (2000), Chapter 2, section 1, and the literature cited there.
The presumption against the retroactive operation of legislation
186. At common law there is a presumption that a statute does not have "retrospective" effect. The statement in Maxwell on The Interpretation of Statutes, 12th ed (1969), p 215 is frequently quoted:
The very generality of this statement rather obscures the fact that it uses the term "retrospective" to describe a range of different effects, some more and some less extreme. It is therefore important to identify what it is about any particular provision that is said to be "retrospective".
187. So far as matters of substance are concerned, the essence of the core common law rule is conveniently stated by Sir Owen Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261, 267:
In Wainwright v Home Office  QB 1334, 1345F, at para 27, Lord Woolf LCJ referred succinctly to:
Since statutes which change the substantive law in relation to events in the past can obviously cause serious injustice, the presumption against a statute being intended to have such an effect is powerful - so powerful indeed that any statutory provision, such as section 1 of the War Damage Act 1965, which is intended to apply in this way can be expected to say so expressly. Because such provisions do actually affect the position before the legislation came into force, they can conveniently be described as "retroactive".
Statutes making prospective changes to existing rights
188. Retroactive provisions alter the existing rights and duties of those whom they affect. But not all provisions which alter existing rights and duties are retroactive. The statute book contains many statutes which are not retroactive but alter existing rights and duties - only prospectively, with effect from the date of commencement. Although such provisions are often referred to as "retrospective", Viscount Simonds rightly cast doubt on that description in Attorney General v Vernazza  AC 965, 975.
189. The distinction between the two kinds of provision, and the need to have regard to that distinction, were spelled out by the Court of Appeal long ago in West v Gwynne  2 Ch 1. In that case the plaintiffs were assignees of a lease dating from 1874. The lease contained a covenant by the lessees against underletting the premises or any part thereof without the consent in writing of the landlord. Section 3 of the Conveyancing and Law of Property Act 1892 provided that
In 1909 the plaintiffs applied to the defendant landlord for his consent to a proposed underlease of part of the premises but he replied that he was prepared to grant a licence only on condition that he should receive for himself half of the sum by which the rent of the underlease exceeded the rent payable under the lease. The plaintiffs sought a declaration that the defendant was not entitled to impose the condition. The question was whether section 3 of the 1892 Act applied to a lease executed before the commencement of the Act. The Court of Appeal held that it did.
190. Cozens-Hardy MR said this,  2 Ch 1, 11:
Buckley LJ observed,  2 Ch 1, 11 - 12:
191. Similarly - simplifying the complexities - in Gustavson Drilling (1964) Ltd v Minister of National Revenue  1 SCR 271 an oil exploration company was entitled to deduct certain drilling and exploration expenses when computing its income for tax purposes, but it did not do so. In 1962 the legislation was changed to disallow such deductions. Subsequently, a successor company none the less sought to deduct those accumulated expenses and invoked the presumption against legislation having retrospective effect. The majority of the Supreme Court of Canada rejected the argument. Dickson J said, at pp 279 - 280:
192. Since provisions which affect existing rights prospectively are not retroactive, the presumption against retroactivity does not apply. Nor is there any general presumption that legislation does not alter the existing legal situation or existing rights: the very purpose of Acts of Parliament is to alter the existing legal situation and this will often involve altering existing rights for the future. So, as Dickson J went on to point out in Gustavson Drilling  1 SCR 271, 282 - 283, with special reference to tax legislation:
As the sparks fly upward, individuals and businesses run the risk that Parliament may change the law governing their affairs.
Presumption against interference with vested rights
193. Often, however, a sudden change in existing rights would be so unfair to certain individuals or businesses in their particular predicament that it is to be presumed that Parliament did not intend the new legislation to affect them in that respect. If undue weight is not given to his use of the term "retrospective", Wright J gives a strong statement of the presumption in In re Athlumney  2 QB 547, 551-552:
Another statement of the presumption is to be found in the judgment of Dickson J in Gustavson Drilling  1 SCR 271, 282:
194. Dickson J here makes the important point that this presumption applies to all legislation which affects vested rights, whether the legislation affects them retroactively or only prospectively. The decision of the Privy Council in Zainal bin Hashim v Government of Malaysia  AC 734 is an example of the presumption being considered in relation to a retroactive statute.
195. More often, the presumption falls to be considered in relation to legislation which alters rights only for the future. Since it is more likely that Parliament intended to alter vested rights in this way than that it intended to make a retroactive change, in practice the presumption against legislation altering vested rights is regarded as weaker than the presumption against legislation having retroactive effect.
196. The presumption is against legislation impairing rights that are described as "vested". The courts have tried, without conspicuous success, to define what is meant by "vested rights" for this purpose. Although it concerned a statutory rule resembling section 16(1)(c) of the Interpretation Act 1978, the decision of the Privy Council in Abbott v Minister for Lands  AC 425 is often regarded as a starting-point for considering this point. There Lord Herschell LC indicated, at p 431, that, to convert a mere right existing in the members of the community or any class of them into an accrued or vested right to which the presumption applies, the particular beneficiary of the right must have done something to avail himself of it before the law is changed. The courts have grappled with this idea in a series of cases which Simon Brown LJ surveyed in Chief Adjudication Officer v Maguire  1 WLR 1778. It is not easy to reconcile all the decisions. This lends weight to the criticism that the reasoning in them is essentially circular: the courts have tended to attach the somewhat woolly label "vested" to those rights which they conclude should be protected from the effect of the new legislation. If that is indeed so, then it is perhaps only to be expected since, as Lord Mustill observed in L'Office Cherifien des Phosphates v Yamashita-Shinnihon Steamship Co  1 AC 486, 525A, the basis of any presumption in this area of the law "is no more than simple fairness, which ought to be the basis of every general rule."
197. A caveat should be entered. In Hedderwick v The Federal Commissioner of Land Tax (1913) 16 CLR 27, 37 Griffith CJ said:
There is no suggestion in the present case that the application of the 1998 Act would affect any vested rights of the Crown or of any other public authority. It is not therefore necessary to decide whether the observation of the Chief Justice is sound as a general proposition or whether, if it is, the presumption would prevail in the case of the 1998 Act, given its objectives.
Presumption that legislation does not affect pending proceedings
198. The authorities refer to a further presumption, that legislation does not apply to actions which are pending at the time when it comes into force unless the language of the legislation compels the conclusion that Parliament intended that it should. A well-known statement of this rule of construction is to be found in the judgment of Sir George Jessel MR in In re Joseph Suche & Co Ltd (1875) 1 Ch D 48, 50 where he referred to:
In Zainal bin Hashim v Government of Malaysia  AC 734, 742C the Board deliberately modified this rule and slightly reduced its force:
The rule applies, of course, to all legislation, not just to legislation with retroactive effect. Indeed this particular presumption is a more limited version of the general presumption that legislation is not intended to affect vested rights. Since the potential injustice of interfering with the rights of parties to actual proceedings is particularly obvious, this narrower presumption will be that much harder to displace. In Zainal bin Hashim v Government of Malaysia, however, the Privy Council held that the language of the provision in question compelled the conclusion that it was intended to apply even to pending proceedings.
Statutes altering matters of pure procedure
199. So far I have been dealing with changes in substantive law. As can be seen from the statement of Wright J in In re Athlumney  2 QB 547, 552 which I quoted above, changes in matters of pure procedure have been treated differently. Wilde B stated the position most starkly in Wright v Hale (1860) 6 H & N 227, 232:
The justification for treating matters of pure procedure differently was stated by Mellish LJ in Republic of Costa Rica v Erlanger (1876) 3 Ch D 62, 69:
200. Although, at a general level, the distinction between matters of substance and matters of pure procedure is readily understandable, in practice it has not always proved easy to apply, especially in relation to legislation on limitation or prescription. For that reason, in Yew Bon Tew v Kenderaan Bas Mara  AC 553, 558H - 559A Lord Brightman cautioned against the potential dangers lurking in the description of a measure as "procedural". In L'Office Cherifien v Yamashita-Shinnihon Steamship Co Ltd  1 AC 486, 527G - 528C Lord Mustill went further and suggested that a single criterion of fairness should be applied to all provisions. He added, at pp 525F - H:
This is an application of the "true principle" identified by Staughton LJ in Secretary of State for Social Security v Tunnicliffe  2 All ER 712, 724f -g:
201. On Lord Mustill's approach an appropriate test might be formulated along these lines: Would the consequences of applying the statutory provision retroactively, or so as to affect vested rights or pending proceedings, be "so unfair" that Parliament could not have intended it to be applied in these ways? In answering that question, a court would rightly have regard to the way the courts have applied the criterion of fairness when embodied in the various presumptions.
202. In these proceedings your Lordships are called on to consider the application of the 1998 Act in civil proceedings. The language of "vested rights" does not translate altogether easily into the language of the criminal law. For that reason any views that I express are confined to civil proceedings.
The operative provisions of the 1998 Act to be considered together
203. The argument at the hearing concentrated on sections 3 and 4 of the 1998 Act and, more particularly, on whether section 3 had "retrospective" effect. In the light of the foregoing discussion even that argument requires to be broken down into two parts. The first is whether section 3 is retroactive. The second is whether section 3 applies generally or only in such a way as not to affect rights that were vested, or proceedings that were pending, on 2 October 2000. Those issues relating to section 3 cannot be resolved in isolation, however, but only by looking at the 1998 Act as a whole.
204. A single statute may contain some provisions which are retroactive and some which affect existing rights only for the future. Similarly, some provisions may apply generally on commencement and others only without prejudice to vested rights or without affecting pending proceedings. But, having regard to the purpose and structure of the 1998 Act, and subject to any express provisions to the contrary, Parliament must have intended all the operative provisions of this particular statute to take effect in the same way in respect of any given Convention right.
205. Section 1(1) defines the expression "the Convention rights" as the rights and fundamental freedoms set out in certain specific articles of the Convention. The Act then goes on to provide the two mechanisms by which they are to have effect in the domestic law of the United Kingdom. First, under the appropriate cross-heading, in sections 3 to 5 - later complemented by section 10 - the Act provides a mechanism for giving effect to Convention rights in relation to legislation. Secondly, again under an appropriate cross-heading, in sections 6 to 9 it contains a mechanism for giving effect to Convention rights in relation to the acts of public authorities.