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England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Grace Bay II Holdings Sarl & Ors, R (on the application of) v The Pensions Regulator & Ors  EWHC 7 (Admin) (10 January 2017)
Cite as:  EWHC 7 (Admin),  ICR D13
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
-on the application of-
(1) Grace Bay II Holdings Sarl
(2) HIG Bayside Debt & LBO Fund II LP
(3) HIG European Capital Partners LLP
(4) HIG Europe Capital Partners LP
(5) HIG Europe-Silentnight Sarl
(6) Silentnight Group Limited
(7) Mr Mark Kelly
(8) Mr Lionel Laurant
(9) Mr Sami Mnaymneh
|The Pensions Regulator
(1) ABF Limited (in Liquidation)
(2) SNGL Realisations (2011) Limited (in Liquidation)
(3) 20-20 Trustees Limited
(4) Mr William Ashburner
(5) Mr Geoffrey Bailey
(6) Mr Martin Jourdan
(7) Mr Geoffrey Shaffer
(8) Board of the Pension Protection Fund
Fenella Morris QC and Thomas Robinson, (instructed by The Pensions Regulator) for the Defendant
Monica Carss-Frisk QC, Jonathan Hilliard QC and Jamie Holmes (instructed by Burges Salmon LLP) for the Third to Seventh Interested Parties
Hearing dates: 14 December 2016
Crown Copyright ©
Mrs Justice Whipple:
HEARING IN PRIVATE
"Should the cases in both Warning Notices be referred to the Determinations Panel in due course, the Regulator's current intention is that the arguments set out in WN2 would represent its primary arguments, with the arguments set out in WN1 being run in the alternative."
a) Whether the Claimants have an alternative remedy available to them (Alternative Remedy);
b) Whether the Regulator has power to issue more than one warning notice, proposing the exercise of the same regulatory function against the same targets arising out of the same facts (Vires);
c) Whether WN2 is unlawful as a result of unfairness in the Regulator's treatment of the Claimants (Unlawful Exercise)
d) Whether this Court should decline a remedy on grounds of the materiality test in s 31 Senior Courts Act 1981 (Materiality)
e) Whether the Regulator should be compelled to give specific disclosure (Disclosure).
"(2) The "standard procedure" is a procedure which provides for –
(a) the giving of notice to such persons as it appears to the Regulator would be directly affected by the regulatory action under consideration (a "warning notice"),
(b) those persons to have an opportunity to make representations,
(c) the consideration of any such representations and the determination whether to take the regulatory action under consideration,
(d) the giving of notice of the determination to such persons as appear to the Regulator to be directly affected by it (a "determination notice"),
(e) the determination notice to contain details of the right of referral to the Tribunal under subsection (3),
(f) the form and further content of warning notices and determination notices and the manner in which they are to be given, and
(g) the time limits to be applied at any stage of the procedure."
"(3) Where the standard procedure applies, the determination which is the subject-matter of the determination notice may be referred to the Tribunal […] by-
(a) any person to whom the determination notice is given as required under subsection (2)(d), and
(b) any other person who appears to the Tribunal to be directly affected by the determination."
(5) On determining a reference, the Tribunal must remit the matter to the Regulator with such directions (if any) as the Tribunal considers appropriate for giving effect to its determination.
(6) Those directions may include directions to the Regulator—
(a) confirming the Regulator's determination and any order, notice or direction made, issued or given as a result of it;
(b) to vary or revoke the Regulator's determination, and any order, notice or direction made, issued or given as a result of it;
(c) to substitute a different determination, order, notice or direction;
(d) to make such savings and transitional provision as the Tribunal considers appropriate."
a) The circumstances of the case including the grounds and evidence on which the warning notice is based;
b) Material received or obtained by the Regulator which might reasonably be considered to support or undermine the case for the exercise of the functions;
c) Details of the specific functions that are under consideration; and
d) A timeframe for receipt of representations.
"If a Directly Affected Party wishes to raise a procedural issue in the period before any referral by the Case Team to the Determinations Panel, it should be raised with the Case Team who will consider it and make a decision. The Case Team may share details of the issues among any of the other Directly Affected Parties, if it considers it appropriate to do so."
"26. The Determinations Panel will take no part in the investigation carried out by the Case Team. However, in order to ensure that its decision is made in a manner that is fair to all parties, including those persons whose interests the Determinations Panel is statute-bound to consider, and consistent with the regulator's public law duties, the Determinations Panel may:
i. consider additional material (to that required by paragraph 11 or 13 above) supplied by the Parties so long as it is submitted within a time period in which it can properly be considered by the Parties;
ii. request the production of apparently existing material or information (ie material which, having considered the documentation provided, the Panel has reasonable grounds for concluding exists); and
iii. decide, in managing the process, that it may consider any additional material or information received from persons who are not Directly Affected Parties."
" … the points raised in the grounds on which judicial review is sought could and should, if pursued, be the subject of representations to the authority, or of submissions to the tribunal. … An application by way of judicial review is, in all the circumstances of this case, unjustified."
" It is entirely clear from [Mummery LJ's] judgment that only in very exceptional circumstances should this court entertain such applications. That is because the FSA is operating within a statutory environment that provides protection to those in the position of the claimant, and fundamentally the protection that is available through utilising the Tribunal. The relevant principles are set out in paragraphs 10, 20(4), 30 and 32 of the judgment. In my view, the principles articulated there apply with equal force to this application."
" It was common ground that the court has a discretion whether to give permission to proceed with a claim for judicial review and consider the substance of the claim. It was also common ground, however, that where there is an alternative remedy available to the claimant the court will not ordinarily allow him to proceed by way of judicial review, save in exceptional circumstances, usually because it is satisfied that the alternative remedy is for some reason clearly unsatisfactory."
Dealing with the argument that the particular breach alleged in that case could only be remedied by judicial review, he continued (at ):…
"It was common ground that the tribunal does not have power to quash the Decision Notice and remit the matter to the RDC, but whether that means that a reference to the tribunal is not an adequate remedy is one of the principle issues that arises on the appeal. If the judge is right, however, it is difficult to see why any challenge to a Warning or Decision Notice on public law grounds should not routinely be made by way of judicial review."
" … May LJ expressed the view that it is necessary to guard against granting judicial review in cases where there is an alternative appeal remedy merely because it may be more effective and convenient to do so. In my view those are important words of caution to bear in mind, because to allow a claim for judicial review to proceed in circumstances where there is a statutory procedure for contesting the decision in question risks undermining the will of Parliament."
" An appeal in the form of a complete re-hearing has long been recognised as being capable of remedying serious defects in the original procedure. …"
" Ferrero and South West Water were both cases involving decisions taken by local authorities in the interests of public health and safety. They were both also cases in which the quashing of the notice would undermine the protective measures taken by the local authority and where Parliament had provided statutory appeal procedures designed to enable the substance of the dispute to be determined within a short time. It is not difficult to understand why in such cases the courts should lean strongly against allowing an applicant to proceed by way of judicial review, given that a successful application is likely to perpetuate what may be a harmful state of affairs. In such cases an appeal on the merits is likely to provide a quick and effective means of determining the real issue, namely, whether there is a threat to public safety. Given the role of the FSA in protecting the public against negligent or improper behaviour on the part of those who are responsible for the running of the financial services industry and its disciplinary powers (which include prohibition and suspension), similar considerations might be said to apply."
" The starting point, as emphasised by cases such as Preston, Calveley, Ferrero, Falmouth and Davies, is that only in exceptional cases will the court entertain a claim for judicial review if there is an alternative remedy available to the applicant. The alternative remedy will almost invariably have been provided by statute and where Parliament has provided a remedy it is important to identify the intended scope of the relevant statutory provision. For example, in the context of legislation to protect public health the court is very likely to infer that Parliament intended the statutory procedure to apply, even in cases where it is alleged that the decision was arrived at in a way that would otherwise enable it to be challenged on public law grounds, because it enables the real question in dispute to be decided. That will be particularly so if the procedure allows a full reconsideration on the merits of a decision which has direct implications for public health and safety. A remedy by way of judicial review, although relatively quick to obtain, simply returns the parties to their original positions. It does not enable the court to determine the merits of the underlying dispute. In a few cases strong reasons of policy may dictate a different approach: see R v Hereford Magistrates' Court, ex parte Rowlands; but such cases are themselves exceptional and do not in my view detract from the general principle. Ultimately, of course, the court retains a discretion to entertain a claim for judicial review, but whether it will do so in any given case depends on the nature of the dispute and the particular circumstances in which it arises.
 … It would be surprising, therefore, if Parliament had intended that disputes relating to the procedure adopted by the FSA should be reviewed by the courts, save in the most exceptional cases. Davies is authority for the proposition that the court should not entertain an application for judicial review, even in a case where it is said that the FSA has exceeded its powers with the result that its decision is a nullity … .
… In my view the judge did err in law in this case because he failed properly to identify the legislative intention behind the regulatory scheme embodied in the Act and so failed to appreciate that there was available to Mr Willford an alternative remedy that was a more appropriate means of challenging the Decision Notice. As a result his decision was, in my view, plainly wrong. For my part, therefore, I would allow the appeal on the grounds that the judge was wrong to entertain the claim for judicial review and should not have quashed the Decision Notice. I would only add that if a question of this kind is raised at the permission stage of the claim (as it should be and in this case was) the court ought to decide it before proceeding to hear the merits of the substantive claim. Not only does that respect the requirements of orderly procedure, but in many cases it may also avoid putting the parties to unnecessary expense in arguing points that are of no relevance to the eventual outcome. If a decision is deferred until after there has been argument on the substantive issues, there is likely to be an overwhelming temptation for the court to deal with those issues in order to avoid putting the parties to additional expense."
" However, I add that I do not consider that the absence of a power in the Upper Tribunal to quash a decision of the FSA on procedural grounds, to which the judge attached importance at paragraph 100, is determinative of the issue in the present case. The issue is whether the FSA has so failed to meet the statutory requirements that intervention is required in the particular context. That context includes the underlying statutory purpose (Ferrero). One of the purposes of the FSA's disciplinary power is the protection of the public and substantive issues should not readily be deferred in order to determine procedural issues. That is the context in which the adequacy of the reasons must be considered."
" It cannot, however, be in accordance with the spirit of the Convention or the common law that the court should be powerless to prevent a violation of a right to a fair procedure, merely because of the existence of a later way of remedying the consequences. A stitch in time may save nine."
Summary of Approach
a) The issue of alternative remedy falls to be considered at the permission stage (Willford, ).
b) Where there is an alternative remedy, the Court will only entertain a judicial review in exceptional circumstances, usually because the Court is satisfied that the alternative remedy is for some reason clearly unsatisfactory (Davies ; Griggs ; Willford , ).
c) The Court will take into account whether granting permission in a case arising out of a regulatory procedure will lead to challenges in similar cases being pursued routinely by way of judicial review (Willford ).
d) The mere fact that a statutory body cannot quash a decision or remit it to the prior decision maker, does not mean that the statutory remedy is not appropriate (Willford , ).
e) It is necessary for the Court to guard against granting judicial review merely because it may be more effective and convenient to proceed by way of judicial review. That would risk undermining the will of Parliament (Willford ).
f) An appeal by way of rehearing is capable of remedying even serious defects in the original procedure (Willford ).
g) The Court should lean strongly against allowing an applicant to proceed by way of judicial review in those cases where Parliament has provided a statutory appeal procedure designed to enable the substance of the dispute to be determined within a short time. In these cases, where there is an issue of public interest or public safety at issue a successful application for judicial review is likely to perpetrate what may be a harmful state of affairs (Willford , ).
h) Where Parliament has provided a statutory remedy, it is important to identify the intended scope of the statutory provision. The Court will consider whether it is to be inferred that Parliament intended the statutory procedure to apply, even in cases where it is alleged that the decision was arrived at in a way which could otherwise be challenged on public law grounds, because it enables the real question to be decided. (Willford , and see Davies and Griggs on their facts).
Conclusion on Alternative Remedy
CONCLUSION AND CONSEQUENTIAL MATTERS