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Department for Environment, Food and Rural Affairs (Appellants) v. ASDA Stores Limited and another (Respondents)(Criminal appeal form Her Majesty's High Court of Justice)
OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE
Department for Environment, Food and Rural Affairs (Appellants) v. ASDA Stores Limited and another (Respondents) (Criminal appeal from Her Majesty's High Court of Justice)
THURSDAY 18 DECEMBER 2003
The Appellate Committee comprised:
Lord Nicholls of Birkenhead
Lord Hobhouse of Woodborough
Lord Walker of Gestingthorpe
HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
Department for Environment, Food and Rural Affairs (Appellants) v.
ASDA Stores Limited and another (Respondents) (Criminal appeal from Her Majesty's High Court of Justice)
 UKHL 71
LORD NICHOLLS OF BIRKENHEAD
1. Asda is a household name. Asda stores are found up and down the country. On 1 November 2000 an inspector from the Horticultural Marketing Inspectorate visited the Asda store at Fareham in Hampshire. The Horticultural Marketing Inspectorate is an inspectorate within the Department of the Environment, Food and Rural Affairs. It is responsible for the enforcement of European Community marketing standards for fresh fruit and vegetables and other horticultural produce in England and Wales.
2. The inspector considered that some of the fruit and vegetables on display at the Asda supermarket contravened EC marketing standards. The contraventions mostly comprised inadequate labelling: for example, the oranges and lemons were displayed for sale without an indication of their country of origin, the apples bore no indication of their variety, and no quality class was shown in respect of the plums. The inspector considered that in two instances the quality of vegetables was sub-standard: the iceberg lettuces were not sound, 25 per cent of the aubergines were not fresh and 20 per cent of them not clean.
3. Based on this inspection the Department of the Environment, Food and Rural Affairs laid 14 informations against Asda Stores Ltd and Mr Graham Godley, then grocery manager of the Asda supermarket at Fareham. The informations alleged offences contrary to section 14(1)(a) of the Agriculture and Horticulture Act 1964 as amended. In each instance the offence comprised offering for sale a specified type of fruit or vegetables in contravention of EC marketing standards as prescribed by a specified EC regulation.
4. Asda Stores Ltd and Mr Godley appeared for trial on 12 November 2001 at the South Hampshire Magistrates' Court. They each entered a plea of not guilty in respect of all the informations. At the beginning of the trial and before any evidence was heard they submitted that the court had no jurisdiction to try the informations because the offences charged were not known to the law. District Judge Woollard accepted this submission. An appeal by way of case stated was dismissed by the Divisional Court comprising Rose LJ and Gibbs J. The department has now appealed to your Lordships' House.
5. Since the district judge accepted the defendants' preliminary submission on the law, the truth of the facts alleged was not determined at the trial. But it is clear that if the alleged facts are true, then Asda and Mr Godley contravened the relevant EC regulations. For instance, the iceberg lettuces are said not to have complied with the minimum requirements of quality prescribed by Commission Regulation (EEC) 79/88. This regulation is stated on its face to be 'binding in its entirety and directly applicable in all Member States'. Thus a competitor trader or other person prejudiced by the contravention could bring civil proceedings against Asda in direct reliance on these regulations: see Antonio Muñoz y Cia SA v Frumar Ltd  Ch 328, a decision of the European Court of Justice. This has not been disputed. It may be that the Attorney General, in his capacity of guardian of the public interest, could himself bring proceedings for an injunction.
6. Nor is it in dispute that this country, in common with other member states, is under an obligation to take all necessary steps to penalise infringements of these EC regulations. As Advocate General Geelhoed said in the Frumar case, at page 340, para 54: 'Infringements of Community law are to be penalised under conditions, both procedural and substantive, which are analogous to those applicable to comparable infringements of like seriousness of national law.' But the Community regulations do not themselves create criminal offences in this country. The question raised by this appeal is whether the relevant statutory provisions enacted in this country are effective to criminalise contraventions of the particular EC regulations in point in these proceedings. The courts below held they are not. The question is one of statutory interpretation.
7. The easiest way to identify this issue of interpretation is to start with the Agriculture and Horticulture Act 1964 ('the 1964 Act') as it stood before the European Communities Act 1972 came into force. Compulsory grading and labelling of horticultural produce existed in this country before the United Kingdom joined the European Economic Community. Part III of the 1964 Act made provision for this. The legislation conferred a regulation-making power on ministers, imposed a duty to comply with any regulations made, and created criminal offences as sanctions.
8. Section 11(1) conferred the power to make regulations:
Produce of a description regarding which grades of quality have been designated and defined under section 11(1) is referred to in the Act as 'regulated produce'. Section 12(1) imposed a duty to observe the regulations. Section 14(1) made it an offence to sell regulated produce in contravention of section 12 or to offer such produce for sale.
9. I pause to note that this legislative scheme involved the creation of criminal offences in respect of matters which would be identified by regulations not yet made. Section 11(1) was forward looking. It was an enabling power. The produce falling within the statutory designation of 'regulated produce' depended on what the regulations, when made, would provide. Likewise the grades of quality remained to be defined, as also did the form of labelling. Criminal sanctions were imposed by reference to the uncertain content of future regulations.
10. Further, there is nothing in the statute to suggest that the regulation-making power conferred by section 11 could be exercised only once. That would be nonsense. Clearly Parliament envisaged that the power could be exercised from time to time, adding to or amending any regulations previously made.
11. Grading of produce regulations were duly made from time to time pursuant to this power: for instance, the Grading of Produce (Pears) Regulations 1967, S I 1967/1019. These regulations were amended in 1968 and again in 1969 by S I 1968/1041 and S I 1969/937. Similarly, grading of produce regulations were made in respect of apples, and they too were amended more than once: see S I 1967/1020, amended by S I 1968/1040 and S I 1969/936.
Joining the EEC in 1973
12. When the United Kingdom joined the European Economic Community on 1 January 1973 there were already in existence Community regulations governing the grading of certain types of horticultural produce. So this country's law on this topic had to be brought into line with the existing Community rules. Further, criminal sanctions had to be provided in respect of contraventions of Community grading rules because, as already noted, Community law requires that contravention of Community grading rules must attract criminal sanctions similar to those attaching to contraventions of domestic grading regulations. The 1964 Act therefore had to be amended.
13. The amendment was made by section 4(1) and Part C of Schedule 4 of the European Communities Act 1972. It consisted of adding a new subsection, subsection (3), to section 11 of the 1964 Act. The structure of the new subsection was as follows. First, produce of a description for the time being subject to Community grading rules was, automatically and without further ado, removed from the scope of the regulation-making power in section 11(1) of the 1964 Act. Thenceforward such produce would not be 'regulated produce' as defined in section 12 of the 1964 Act. Second, a new regulation-making power was created by which provision could be made to apply the 1964 Act, with or without modification, to such produce 'as if' it were regulated produce. The new subsection (3) of section 11 provided:
(a) [not material]
(b) provide for the application, subject to any modifications specified in the regulations, of all or any of the following provisions of this Part of this Act as if the produce were regulated produce and as if the standards of quality established by those rules were prescribed grades.'
14. Community grading rules were defined as 'any directly applicable Community provisions establishing standards of quality for fresh horticultural produce': paragraph 4(1)(c) of Part C of Schedule 4 to the European Communities Act 1972.
15. I have mentioned that the need for this amendment arose from the fact that directly applicable Community grading rules were already in existence. The new regulation-making power was plainly apt to apply to produce which was subject to existing Community rules. That is not disputed. But was it apt to apply to Community grading rules made subsequently, that is, after the European Communities Act 1972 came into force? This is the issue in the present proceedings, because the Community grading rules said to have been contravened in the Asda store on 1 November 2000 were all made after 1972.
16. With all respect to those who have considered otherwise, to my mind it is abundantly plain that the scope of the new regulation-making power was not confined to produce falling within Community grading rules existing in 1972.
17. Let me take this in stages. The first stage is to note that the scope of the new regulation-making power was co-extensive with the types of produce excluded from the definition of 'regulated produce'. The scope of the new regulation-making power marched hand-in-hand with the scope of the disapplication provision in the opening words of the new subsection (3). This is clear as a matter of both language and context. This is clear as a matter of language, because the new power applied to 'such produce' which is a reference back to the produce mentioned in the opening words ('produce of any description ..'). This is as one would expect. One would expect to find that, subsection (3) having excluded certain produce from the scope of section 11(1), the new power would enable the ministers to make alternative provision regarding the self-same horticultural produce. One would expect to find that the new regulation-making power would fill the gap created by the exclusionary provision. So language and context were in harmony.
18. The second step is to note the language used to define the scope of these two matching provisions. The new subsection 11(3) of the 1964 Act excluded from the scope of regulated produce 'produce of any description for the time being subject to Community grading rules' (my emphasis). The ambulatory words I have emphasised can only have been intended to indicate that this exclusionary provision was not confined to produce which was subject to Community grading rules at the time this provision in the European Communities Act 1972 came into force. Rather, the applicability of the exclusionary provision was to depend upon the content of Community grading rules at any given time in the future. The phrase 'for the time being' envisages, and is intended to encompass, a changing state of affairs. This, again, is what one would expect, in relation to both the disapplication provision and the new regulation-making power. One would expect to find that the new power would extend to produce which, for the time being, was subject to Community grading rules.
The 1973 Regulations
19. As already noted, the exclusionary provision in the new subsection (3) of section 11 operated automatically to exclude produce for the time being subject to Community grading rules from the scope of regulated produce. The gap caused by this automatic operation of the exclusionary provision was filled by the Grading of Horticultural Produce (Amendment) Regulations 1973, S I 1973/22. These regulations, which I shall call 'the 1973 regulations', were made by the Minister of Agriculture, Fisheries and Food and the Secretary of State in exercise of the new regulation-making power conferred by section 11(3). The 1973 regulations came into force on 1 February 1973.
20. Regulation 2 provided that certain sections of the 1964 Act as modified by the 1973 regulations 'shall apply as if produce of any description for the time being subject to Community grading rules were regulated produce'. It seems clear that this provision was intended to be co-extensive with the scope of the exclusionary provision in section 11(3), whose language it echoes. Like the latter provision, regulation 2 applies to produce 'for the time being' subject to Community grading rules. Whenever Community grading rules change, the relevant sections of the 1964 Act, as modified by the 1973 regulations, apply automatically to produce falling within the new rules as if it were regulated produce.
21. That the 1973 regulations should apply automatically whenever new Community grading rules were made is not surprising. Like domestic grading regulations, Community grading rules can be expected to change from time to time. When new Community grading rules are made, ipso facto they become directly applicable in this country. So it is not surprising, and it is administratively convenient, that the steps this country is obliged to take in respect of the new Community grading rules should take place automatically whenever new rules are made.
22. One of the sections of the 1964 Act modified by regulation 2 of the 1973 regulations was section 14. Section 14, the offence-creating section, was modified by substituting a new subsection (1):
(a) exposes the produce for sale '
23. Under this modified form of section 14(1) applicable to produce for the time being subject to Community grading rules, an offence is created in respect of a contravention of Community grading rules 'applying thereto'. That can only mean, applying to the produce in question at the time of sale or other acts said to constitute contraventions. The modified form of section 14(1) is aimed at Community grading rules for the time being applicable.
24. Here also it is not surprising that this modified form of section 14, creating criminal offences, should operate automatically as and when new Community grading rules are made. The position is similar to that existing under the original, non-modified version of section 14 applicable to regulated produce when new regulations were made from time to time in respect of such produce.The present case
25. For these reasons I am unable to agree with the interpretation given by the courts below to the 1973 regulations and the amendments made to the 1964 Act by the European Communities Act 1972. In reaching their conclusions both courts below were much influenced by the decision of the Divisional Court, comprising Kennedy LJ and Jackson J, in Ministry of Agriculture, Fisheries and Food v Mayne  EHLR 5. When interpreting the regulations there under consideration Kennedy LJ adopted an approach to the effect that a regulation imposing sanctions for failure to comply with an EC Directive is not to be read as applying to future amendments to the Directive unless the wording of the regulations is such as clearly to take account of the possibility of future amendments.
26. I agree that offence-creating provisions must always be expressed with sufficient clarity and precision. But the mechanism chosen by Parliament for implementing Community obligations is a matter of legislative choice for Parliament. Particularly where Community legislation may be changed frequently, Parliament may choose to adopt an approach which does not involve making new implementing regulations whenever Community legislation changes. Courts should not approach the interpretation of implementing statutes or regulations as though there were a presumption that they do not embrace future changes in Community legislation. There is no such presumption. There might have been a place for such a presumption if it were inherently unlikely that implementing statutes or implementing statutory instruments would be intended to embrace future changes in Community legislation, but that is not always so. Rather, in each case the court is seeking to find, with the assistance of the usual interpretative aids, the intention reasonably to be attributed to Parliament in enacting the relevant legislation or to the minister in making the relevant statutory instrument.
27. In the present case, for the reasons given above, I consider there is no room for doubt on the proper interpretation of section 11(3) of the 1964 Act and the 1973 regulations. The contrary interpretation of these provisions, I might add in passing, would involve rejecting the assumption universally held since 1973. It would also mean that for many years this country has been in breach of its Community law obligation to penalise contraventions of Community grading rules introduced after 1972.
28. Mr Parker QC, toiling valiantly to make bricks without straw, stressed the importance of legal certainty. Persons affected by these sanctions and their advisers need to have ready access to the relevant regulations. Today there is no difficulty because the text of Community grading rules is readily accessible on the website of the Horticultural Marketing Inspectorate. But this was not so in 1972. In those days high street solicitors had ready access to statutory instruments but not, it is said, to Community regulations. A preferable legislative approach, promoting increased legal certainty in practical terms, would have been for each change in Community grading rules to have been followed by a corresponding statutory instrument.
29. I am not impressed by this argument as an aid to interpretation in the present case. No doubt such an alternative way of setting about things could have been adopted by Parliament. Whether it would have made much difference in practice is not clear. In particular, there is no reason to suppose that in practice those affected have ever had difficulty in obtaining adequate information about the scope and terms of current Community grading rules.
30. For completeness I should add that, to meet the doubts raised by the decision of the Divisional Court in the present case, the Secretary of State and the National Assembly for Wales made the Horticultural Produce (Community Grading Rules) (England and Wales) Regulations 2003 (SI 2003/1846). These regulations were not retrospective and they were of a stop gap nature. They do not affect the issues arising on this appeal.
31. I would allow this appeal. I would declare that the offences charged are offences known to the law. I would quash the adjudication of the Justices, set aside the order of the Divisional Court, and remit the matter to the Justices for trial of the informations laid by the appellants.LORD HOFFMANN
32. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Nicholls of Birkenhead and I agree with it.
33. The appeal turns on the construction of some carefully drafted amendments to the Agriculture and Horticulture Act 1964 which were made by the European Communities Act 1972. The construction given to these amendments by the Divisional Court means that each time a new Community grading rule is made, it is necessary to make a statutory instrument giving it criminal sanctions. But for this purpose, no amendment to the 1964 Act was needed. Statutory instruments could have been made as and when required under section 2(2) of the 1972 Act. For the reasons given by my noble and learned friend, it appears to me plain that the reason for amending the 1964 Act was to avoid the need do this. I would allow the appeal.
LORD HOBHOUSE OF WOODBOROUGH
34. In agreement with the Opinion of Lord Nicholls of Birkenhead, I agree that this appeal should be allowed and that the orders he proposes should be made.
35. I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Nicholls of Birkenhead. I agree with it, and for the reasons he gives I too would allow the appeal.
LORD WALKER OF GESTINGTHORPE
36. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Nicholls of Birkenhead. I agree with it and for the reasons which he gives I too would allow this appeal.
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