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THE SUPREME COURT OF JUDICATURE
THE COURT OF APPEAL (CIVIL DIVISION)
APPEAL FROM THE HIGH COURT OF JUSTICE
Courts of Justice
6 August 1999
e f o r e:
- - - - -
SECRETARY OF STATE FOR TRADE AND INDUSTRY
MERCURY PERSONAL COMMUNICATIONS LIMITED
MERCURY PERSONAL COMMUNICATIONS
FIRM TRADING AS "ONE2ONE")
- - - - -
Aided Transcript of the Palantype Notes of
Bernal Reporting Limited, 180 Fleet Street,
0171 421 4040
Shorthand Writers to the Court)
- - - - -
DAVID PANNICK QC & MS DINAH ROSE
(Instructed by Messrs Simmons & Simmons, London, EC2M 2TX) appeared on
behalf of the Applicants
RICHARD FOWLER QC & MR JONATHAN CROW
(Instructed by The Treasury Solicitor) appeared on behalf of the Respondent
(Instructed by Messrs Baker & McKenzie) appeared on behalf of Orange
Personal Communications Services Limited, a directly affected Third Party.
- - - - -
U D G M E N T
approved by the Court
- - - - -
JUSTICE MOSES: This application concerns the Secretary of State's exercise of
statutory powers in relation to procedures for bidding for licences to provide
a new generation of mobile telecommunication services, such as multi-media,
mobile, office and video services, all of which, in the new millennium, may be
obtained while on the move. Oh brave new world that has such service in it.
applicant is a mobile network operator holding a public telecommunications
operator licence. The application for judicial review is brought by that
applicant with One2One and supported by Orange Personal Communication Services
application consists of a challenge to the legality of a decision taken by the
Secretary of State in the exercise of his discretion under Section 3
Wireless Telegraphy Act 1998
("the 1998 Act").
decision which it is sought to impugn is a decision of the Secretary of State
for Trade and Industry announced on 6 May 1999. In that decision he announced
that he intended to introduce regulations pursuant to Section 3
of the 1998 Act
by which existing mobile telephone operators would be required to accept an
amendment to their existing licences under the Telecommunications Act 1984
("the 1984 Act") to incorporate a roaming condition as a precondition of being
able to bid in the auction for a third generation mobile telephone licence.
are currently four mobile network operators holding licences under the 1949 and
1984 Acts. They provide what are described as second generation
telecommunications services. In the first generation operators provided
through their networks simple analogue voice telepathy. Second generation
services are services which include data services, like fax and e-mail, added
to the basic voice service with time capabilities. The proposed third
generation services will provide what are described in the press notice as
"high speed, high quality interactive services on the move". The more
established and profitable operators are Vodafone and BT Cellnet who had
obtained their licences back in 1983 and launched their networks in 1985.
One2One and Orange are relatively new to the market. They launched their
commercial networks in 1993 and 1994 and although I was told they are still
loss making I was happy to see that at least Orange seems to have moved into
the black, at least according to my newspaper.
third generation spectrum is to be auctioned some time before 1 January 2002.
It is asserted by the Secretary of State that pursuant to decision No.
1-H/1999/EC the necessary authorisation system for such an auction must be in
place before 1 January 2000. The conduct of the auction will be governed by
the terms of the notice issued under a statutory instrument to be made pursuant
to Section 3 of the 1998 Act. No such statutory instrument has as yet been
issued but the document containing the decision as promulgated on 6 May 1999
sets out the basic terms to be included. A successful bidder will be awarded a
licence under the 1949 Act and required to obtain a 1984 Telecommunications Act
licence if that bidder does not already have one.
decision under challenge is, as I have said, set out in the press notice of 6
May 1999. Paragraph 3 refers to an announcement made in February concerning
the offer of third generation licences:
the offering of five licences (one more than the existing number of mobile
operators) with a larger licence reserved for a new entrant; and
terms and conditions of roaming agreements to allow the customers of new
entrants to use the second generation networks of existing operators until new
entrants' networks are established. Roaming is the use by a customer of one
mobile operator of another mobile operator's network to make or receive a call
- usually because the customer is out of range of his home network."
paragraph 6 of that notice it is said:
operators will need to accept an amendment to their Telecoms Act licences to
incorporate a roaming condition as a precondition of being able to bid in the
auction for a third generation licence. The Director General of
Telecommunications will shortly commence the necessary statutory consultation
on the amendments."
policy underlying the proposal to set in place the auction on the terms set out
in the press notice is explained in an affidavit from Mr Clayton, who is the
director of the radiocommunications agency. He explains that the incumbents,
that is those who are existing licence holders, have many competitive
advantages over potential new entrants. They have existing network
infrastructure, much of which can be reused to support a third generation
network. They also have established mobile telegraphy grounds and substantial
customer bases. Further, they are able to offer combined second and third
generation services to their customers covering most of the UK at the outset if
they hold a third generation licence which a new entrant could not do without
accessing another operator's network. Taken together, these advantages put
incumbents in an excessively powerful competitive position in relation to
potential new entrants to the market. Paragraph 24:
the same token these advantages mean that, without some levelling of the
playing field, potential new entrants are likely to have a steep uphill
struggle to establish themselves and survive in the mobile telecommunications
forgive the mixed sporting metaphor). He goes on in paragraph 35 to say:
the light of those considerations .. the Secretary of State has reached the
firm view that optimal use of the electro-magnetic spectrum will best be
achieved by encouraging new entrants into the provision of 3G services and
giving any such new entrant the opportunity to roam over the 2G network of an
Incumbent who is also providing 3G services, so that they are better able to
compete with such Incumbents." (see paragraph 35)
summary, the Government and the Director General of Telecommunications regard
it as essential for the success of the auction of third generation licences
that customers of new entrants be permitted the use of existing second
generation licence holders' network.
is agreed that the existing licences of second generation operators protect
their networks to the extent that a new entrant could not obtain the facility
of roaming without modification of those existing licences. The essential
challenge in this application is on the ground that the proposal to require
acceptance of modification to an existing licence as a condition for permission
to bid for a third generation licence amounts to a proposal to exercise
statutory powers in a manner which conflicts with existing statutory rights.
is accepted that the Secretary of State's statutory powers in relation to
bidding could only be exercised by statutory instrument; no such statutory
instrument has been issued but it is equally accepted that the legality of the
decision should be tested on the basis of the proposal announced on 6 May 1999;
the sooner the issues are resolved the better lest the exciting new prospect of
video conferences on the move be delayed.
powers which the Secretary of State proposes to exercise are conferred by
Section 3 of the 1998 Act:
Bidding for licences
(1) Having regard to the desirability of promoting optimal use of the
electro-magnetic spectrum, the Secretary of State may by regulations provide
that, in such cases as may be specified in or determined by him under the
regulations, applications for the grant of wireless telegraphy licences must be
made in accordance with a procedure which-
is set out in a notice issued by him under the regulations, and
involves the making by the applicant of a bid specifying an amount which he is
willing to pay to the Secretary of State in respect of the licence.
(3) Regulations under this section may make provision with respect to the
grant of the licences to which they apply and the terms, provisions and
limitations subject to which such licences are issued and may, in particular-
specify requirements (such as, for example, technical or financial
requirements, requirements relating to fitness to hold the licence and
requirements intended to restrict the holding of two or more wireless
telegraphy licences by any one person) which must be met by applicants for a
specify the other terms, provisions and limitations subject to which any
licence is to be issued."
provisions with which such an exercise of power is said to conflict are
contained in Sections 12 to 15 of the Telecommunications Act 1984. These are
provisions which, so it is contended, provide statutory protection against the
modification of existing rights:
Modification of licence conditions by agreement
(1) Subject to the following provisions of this section, the Director may
modify the conditions of a licence granted under section 7 above.
(2) Before making modifications under this section, the Director shall give
In the case of a licence granted to a particular person, the Director shall not
make the modifications except with the consent of that person: and, in the case
of a licence granted to all persons or to persons of a class, the Director
shall not make the modifications unless either-
The Director shall also send a copy of a notice under subsection (2) above to
the Secretary of State; and if, within the time specified in the notice, the
Secretary of State directs the Director not to make any modification, the
Director shall comply with the direction.
The Secretary of State shall not give a direction under subsection (5) above
it appears to him that the modification should be made, if at all, under
section 15 below; or
it appears to him to be requisite or expedient to do so in the interests of
national security or relations with the government of a country or territory
outsdie the United Kingdom.
Licence modification references to Commission
The Director may make to the Monopolies and Mergers Commission (in this Act
referred to as ´the Commission') a reference which is so framed as to
require the Commission to investigate and report on the questions-
In determining for the purposes of this section whether any particular matter
operates, or may be expected to operate, against the public interest, the
Commission shall have regard to the matters as respects which duties are
imposed on the Secretary of State and the Director by section 3 above."
Reports on licence modification references
In making a report on a reference under section 13 above, the Commission-
shall include in the report definite conclusions on the questions comprised in
the reference together with such an account of their reasons for those
conclusions as in their opinion is expedient for facilitating proper
understanding of those questions and of their conclusions:
where they concluded that any of the matters specified in the reference
operate, or may be expected to operate, against the public interest, shall
specify in the report the effects adverse to the public interest which those
matters have or may be expected to have: and
where they conclude that any adverse effects so specified could be remedied or
prevented by modifications of the conditions of the licence, shall specify in
the report modifications by which those effects could be remedied or prevented.
Where, on a reference under this section, the Commission conclude that any
person who is authorised by the licence to run a telecommunication system is a
party to an agreement to which the Restrictive Trade Practices Act 1976
applies, the Commission in making their report on that reference, shall exclude
from their consideration the question whether the provisions of that agreement,
in so far as they are provisions by virtue of which it is an agreement to which
that Act applies, operate, or may be expected to operate, against the public
interest: and paragraph (b) of subsection (1) above shall have effect subject
to the provisions of this subsection.
Section 82 of the 1973 Act (general provisions as to reports) shall apply in
relation to reports of the Commission on references under section 13 above as
it applies to reports of the Commission under that Act.
A report of the Commission on a reference under section 16 above shall be made
to the Director.
On receiving such a report, the Director-
shall send a copy of the report to the Secretary of State and, in the case of a
licence granted to a particular person, to that person; and
subject to any direction given under subsection (6) below, shall publish the
report in such manner as he considers appropriate for bringing the report to
the attention of persons likely to be affected by it.
If it appears to the Secretary of State that the publication of any matter in
such a report would be against the public interest or the commercial interests
of any person, he may, before the end of the period of 14 days beginning with
the day on which he receives the copy of the report, direct the Director to
exclude that matter from the report as published under subsection (5) above.
Modification of licence conditions following report
Where a report of the Commission on a reference under section 13 above-
includes conclusions to the effect that any of the matters specified in the
reference operate, or may be expected to operate, against the public interest:
specifies effects adverse to the public interest which those matters have or
may be expected to have;
includes conclusions to the effect that those effects could be remedied or
prevented by modifications of the conditions of licence; and
specifies modifications by which those effects could be remedied or prevented
Director shall, subject to the following provisions of this section, make such
modifications of the conditions of the licence as appear to him requisite for
the purpose of remedying or preventing the adverse effects specified in the
Before making modifications under this section, the Director shall have regard
to the modifications specified in the report.
Before making modifications under this section, the Director shall give notice-
stating that he proposes to make the modifications and setting out their effect;
stating the reasons why he proposes to make the modifications; and
specifying the time (not being less than 28 days from the date of publication
of the notice) within which representations or objections with respect to the
proposed modifications may be made,
shall consider any representations or objections which are duly made and not
A notice under subsection (3) above shall be given by publication in such
manner as the Director considers appropriate for the purpose of bringing the
matters to which the notice relates to the attention of persons likely to be
affected by them and, in the case of a licence granted to a particular person,
by sending a copy of the notice to that person.
The Director shall also send a copy of a notice under subsection (3) above to
the Secretary of State: and if, within the time specified in the notice, the
Secretary of state directs the Director not to make any modification the
Director shall comply with the direction.
The Secretary of State shall not give a direction under subsection (5) above
unless it appears to him requisite or expedient to do so in the interests of
national security or relations with the government of a country or territory
outside the United Kingdom."
duties imposed upon the Secretary of State, the Director General of
Telecommunications and the Competition Commission, which has now taken the
place of the Monopolies and Mergers Commission, to which Section 13 refers, are
those set out in Sections 3(1) and Section 3(2) of the 1984 Act. Section 3(2)
Subject to subsection (1) above, the Secretary of State and the Director shall
each have a duty to exercise the functions assigned or transferred to him by or
under Part II or Part III of this Act in the manner which he considers is best
to promote the interests of customers, purchasers and other users in the United
to maintain and promote effective competition ....
to promote efficiency and economy ...."
power to grant the licence and the terms upon which licences under the 1984 Act
are to be granted are set out in Section 7(1) and Section 7(5)(a) which read as
Power to license systems
A licence may be granted- (by the Secretary of State or the Director)
A licence granted under this section may include-
such conditions (whether relating to the running of a telecommunication system
to which the licence relates or otherwise) as appear to the Secretary of State
or the Director to be requisite or expedient having regard to the duties
imposed on him by section 3 above:"
features of this statutory scheme are as follows:
The Director General of Telecommunications has no power to modify a licence
held by a licence holder under Section 12 save by consent.
The only other method by which an existing licence may be modified is after
reference to the Competition Commission:
where the Secretary of State gives a direction to the Director General not to
make a modification because it appears to him that a modification should, if at
all, only be made after a report to the Competition Commission (see Section
12(5) and Section 12 6(a)); or
where the Director General has exercised his power to refer to the Competition
Commission (see Section 13) the Competition Commission has made a report, and
the report includes one of the matters identified in Section 15.
The 1984 Act imposes a duty upon the Secretary of State, the Director General
and the Competition Commission to exercise their respective functions so as to
achieve far wider objectives than the single factor of promoting the optimal
use of the electro-magnetic spectrum, to which the Secretary of State must have
regard when deciding whether to exercise powers in relation to bidding for
licences under Section 3 of the 1998 Act.
legal principle in play is not in dispute. Regulations made under Section 3
must not conflict with statutory rights already conferred by other primary
legislation. The source of that proposition can most readily be found in the
recent decision of the
v the Secretary of State for Social Security ex parte JCWI
 1 WLR 275
. At page 290B Simon Brown LJ said:
statutory rights are not to be cut down by subordinate legislation passed under
of a different Act."
principle is undisputed. Subsidiary legislation must not only be within the
of the enabling statute but must also be so drawn as not to conflict with
statutory rights already enacted by other primary legislation."
applicants' submission starts with the proposition that the Secretary of State
cannot use his powers under Section 3 of the 1998 Act directly to modify an
existing licence held under Section 7 of the 1984 Act. It follows, so Mr
Pannick QC on behalf of the applicants contends, that the Secretary of State
cannot indirectly achieve the same result through the Director General by using
powers under Section 3 of the 1998 Act so as to seek to put pressure upon
applicants for the third generation licence to agree to variation of their
existing licences or face a penalty of exclusion from making a bid. The use of
that power, so he submits, conflicts with the applicants' rights under the 1984
Act not to have a modification imposed save after following the careful
statutory procedure involving a reference to and a report from the Competition
Commission unless the applicants to the third generation licence consent to
success of that contention depends upon the proper construction of the
Secretary of State's Section 3 powers. Mr Fowler QC on behalf of the Secretary
of State contends that there is a power, conferred by Section 3 of the 1998
Act, to modify an existing licence. That power, so he submits, is contained in
Section 3(3)(b) of the 1998 Act. He submits that since there is express power
to restrict the holding of two or more licences by one person it must follow
that there is power to impose what he describes as the lesser restriction of
modification of an existing licence. Thus, he submits, the proposal to
exercise powers under Section 3 does not entail a conflict with any rights
under the 1984 Act.
disagree. The specific statutory power conferred by Section 3(3)(b) is
confined to the potential mischief of one operator holding more than one
licence. There is no warrant for extending that power so as to permit the
Secretary of State to take away existing rights. It is wrong, in any event, to
describe the interference with an existing right as a lesser restriction than
prohibition on holding more than one licence. The prohibition under Section
3(3)(b) does not involve removal of any existing rights at all. It merely
empowers the Secretary of State to prohibit an additional licence.
the notion that the Secretary of State may exercise powers under Section 3 of
the 1998 Act so as to take away existing rights sits uncomfortably with what
one might reasonably suppose to be a consistent statutory scheme. The 1984 Act
sets out a regime for modification of existing licences. It would be odd if
the powers conferred in relation to bidding for new licences were intended to
trench in any way upon the existing statutory regime under the 1984 Act.
Section 3 of the 1998 Act focusses upon the procedure for obtaining new
licences and the terms upon which those new licences will be issued; save for
the reference to existing licences under Section 3(3)(b), in the context of the
power to prohibit a second licence, Section 3 has no application to existing
licences at all.
it should be recalled that the public interest objectives which the Secretary
of State, the Director General and the Competition Commission must seek to
achieve in exercising their functions under the 1984 Act are much wider than
the purpose for which Section 3 powers are designed to be exercised under the
1998 Act. It is difficult to suppose that Parliament intended to allow the
Secretary of State to cut down existing rights by reference to a narrower
criterion than the criteria according to which the rights were granted in the
conclude that the powers conferred by the 1998 Act are designed to be exercised
consistently with the statutory scheme for modification to be found under the
1984 Act. The 1998 Act does not confer a power to impose a modification of an
Fowler QC also contended that there exists a power to modify an existing
licence under Section 3(3)(f). Such a modification of an existing licence
could be achieved by inserting a requirement that an existing licence be
modified as a condition of the third generation licence. However it is not
contended by the Secretary of State that the general power conferred by Section
3(1) of the 1998 Act can be exercised in a way which conflicts with existing
statutory rights, hence the Secretary of State's reliance upon a supposed
specific power under Section 3(3)(b). Section 3(3)(f) does not confer a more
specific power than that conferred by Section 3(1). The power under Section
3(3)(f) cannot be exercised in a way which infringes existing statutory rights
any more than the power under Section 3(1).
Fowler QC's second response is that the proposal to require a modification as a
condition of being permitted to bid does not in any event conflict with
existing statutory rights. There is, as he points out, no statutory right to
bid and in any event it is open to the Secretary of State to invoke Section
3(3)(b) of 1998 to prevent any existing licence holder from bidding. It is
open, so the Secretary of State contends, to any of these applicants to choose
not to accept modification. But if an existing licence holder chooses to bid
that licence holder must accept a modification. That is the bargain in return
for permission to bid. If an existing licence holder accepts the bargain then
that holder will, within the meaning of Section 12(4) of the 1984 Act, be
consenting to modification.
has been a debate in the affidavits as to the commercial effect of not
participating in the auction for third generation licences. The applicants
assert that there is no realistic alternative but to compete in that which the
Secretary of State recognises will be an important expansion of the provision
of telecommunication services. The resolution of this application does not
depend upon whether the applicants are right or wrong in their fear of
commercial disaster if they are not allowed to compete.
answer in my judgment follows from the conclusion in relation to the first
issue. If, as I have concluded, the Secretary of State has no express power
directly to impose a modification of existing rights under second generation
licences, then he cannot use his Section 3 powers indirectly to achieve the
statutory scheme for modification requires in relation to a proposed
controversial modification reference to the Competition Commission and
imposition of a modification only if the Competition Commission considers that
the public interest will be adversely affected if there is no modification and
that that modification will achieve that objective (see Section 15(1) of the
1984 Act). To secure a modification by the indirect means of depriving an
existing licence holder of the opportunity to bid, unless consent to the
modification is forthcoming, undermines that statutory scheme. Parliament in
the 1984 Act envisaged either consent to a modification or reference to the
Competition Commission. It does not permit of any compulsion or threat in
order to secure consent. To describe the process whereby an existing licence
holder may agree to abandon existing rights in return for the opportunity to
bid as a process of bargaining is to ignore the impact of the existing
statutory regime for modification. The use of Section 3 powers to secure
agreement to a modification as a condition for bidding erodes the statutory
protection contained within the 1984 Act. The statutory scheme provides for
the opportunity to agree to a modification or a reference to the Competition
Commission, not for the imposition of a sanction if an existing licence holder
refuses to agree.
the prohibition on bidding is a sanction cannot be doubted. The Secretary of
State himself speaks of the advantages of the new third generation licences and
his proposed arrangements assume that second generation licence holders will,
for their commercial benefit, bid for third generation licences and indeed
succeed. If they do not, new entrants will not be able to use second
generation licence holder's spectrum, the very thing that the Secretary of
State considers necessary for a successful auction. To use Section 3 to
deprive an existing licence holder of the opportunity to bid is inconsistent
with the statutory regime under Sections 12 to 15 of the 1984 Act. That scheme
confers a right to preserve existing licence rights save where consent is given
or the Competition Commission so decides in the public interest.
Fowler QC's third argument relied upon the distinction between the specific
matter to which the Secretary of State must have regard under Section 3(1) of
the 1998 Act and the public interest matters which must be promoted under the
1984 Act. The distinction does not assist the Secretary of State. As I have
already noted, the very fact that the public interest objectives under the 1984
Act are wider than the factor to be considered under Section 3 of the 1998 Acts
tells against the Secretary of State. There is no reason why existing licence
holders' existing rights should be cut down on narrower grounds than those on
the basis of which they were granted in the first place.
conclude that the decision is unlawful. It proposes to use Section 3 powers to
take away existing rights under the 1984 Act. There is no express power to do
so. Absent any express power those powers cannot be exercised in such a way as
to conflict with the existing statutory right to refuse to consent to
modification or in cases of conflict to have the matter referred to the
independent scrutiny of the Competition Commission.
PANNICK: I am very much obliged to your Lordship. The remedy that we seek is
the declaration, my Lord. We set out, if your Lordship still has it, in our
skeleton argument at paragraph 17 the terms of the declaration? It will be a
declaration that the respondent is acting ultra vires
and unlawfully by
requiring existing mobile telephone operators to accept an amendment to their
existing licences under the 1984 Act to incorporate a roaming condition as a
precondition of being permitted to bid in the auction for a third generation
mobile telephone licence. That is the declaration we seek. We also seek
JUSTICE MOSES: Shall I deal with them one at a time?
JUSTICE MOSES: What do you say about the terms of the declaration?
FOWLER: My Lord, the terms of the declaration meet -----
JUSTICE MOSES: I think they meet what I have decided.
FOWLER: Save possibly that there might be reference to -without a reference to
the Competition Commission. Without awaiting the outcome of the Competition
JUSTICE MOSES: It would not be anything but a condition. The Competition
Commission would just say: "You have to modify as a condition of bidding". I
am not sure - do you suffer? I do not think that it matters.
PANNICK: It is drafted in this way because it focusses upon the existing
suggestion and your Lordship is saying that the existing proposal is unlawful.
Your Lordship's judgment makes it perfectly clear what the department could do
should they wish to adopt some other approach.
JUSTICE MOSES: No, I am going to make a declaration in those terms.
PANNICK: I am grateful, my Lord.
JUSTICE MOSES: Your next application is for costs.
PANNICK: My Lord, yes.
FOWLER: I cannot resist an application for costs -----
JUSTICE MOSES: By that applicant.
FOWLER: By that applicant although -----
JUSTICE MOSES: You want to say although - sorry.
FOWLER: I was going to say although I would resist one by the second
JUSTICE MOSES: Yes. Are you asking for costs as well, Mr Saini? You made a
very valuable point under Section 12 that Mr Pannick did not make and I
referred to in my judgment. You could have passed that on to Mr Pannick. Even
he might have absorbed it.
SAINI: Perhaps I can just say my clients were intending to make an application
as well on the same basis. We did not make an application for costs first.
There was consideration given to allowing Mr Pannick and somebody to represent
my client as well because, as your Lordship will know, we are cutthroat
competitors with Mercury. It was very difficult and we did try and do this, to
undertake any exchange of information because it was
JUSTICE MOSES: But I mean you were allowed to say that it was disastrously (
and that no other information was necessary.
SAINI: We did put evidence in to that effect and it was replied to.
JUSTICE MOSES: Yes, it is very difficult when you are preparing knowing quite
what is relevant and what is not. It is purely a question of statutory
construction really, is it not?
SAINI: Indeed, but that certainly was not the way the respondent saw it.
JUSTICE MOSES: I am terribly grateful for your assistance - I mean that
genuinely - and I am not at all surprised that you were there. There is always
this problem when you have to make a commercial decision. But at the moment,
unless there is anything more you want to say, there will be no separate orders
as to costs.
SAINI: The only other thing I would say is that we have been modest in our
representation because consideration was given as to whether we should instruct
leading counsel as well.
JUSTICE MOSES: You have not been modest at all. To use you, Mr Saini, is not
modest at all - a privilege for them and for me.
SAINI: My Lord, I cannot say anything further.
JUSTICE MOSES: No, thank you very much. Is there anything else, Mr Fowler?
FOWLER: My Lord, I would apply for permission to appeal.
JUSTICE MOSES: Yes, I am minded to give it. I think under the new directions
the Court of Appeal like you to refer, if there is a sort of pure point of law,
even if you think it is blindingly obvious.
PANNICK: Can I suggest respectfully why your Lordship should pause and refuse
leave to appeal?
JUSTICE MOSES: Yes.
PANNICK: There are two reasons. First of all, your Lordship does not appear
to have regarded this as a particularly difficult point of statutory
JUSTICE MOSES: That is just hubris and we know what follows hubris.
PANNICK: No doubt, but if the Court of Appeal is going to grant leave to
appeal on every occasion where there is a point of statutory construction,
whether or not the court regards it as a difficult point or not, the Court of
JUSTICE MOSES: Have you seen that practice direction?
PANNICK: Yes, I have, my Lord.
JUSTICE MOSES: It seems rather extraordinary if it does mean in every case.
PANNICK: Indeed. It cannot possibly mean that. There must remain an area of
discretion, an area of judgment. If your Lordship is in a position of
regarding this as not being a particularly difficult point once analysed, then
I submit that your Lordship should not grant leave to appeal. The second
factor is this. In the circumstances of this case to grant permission to
appeal will inevitably prolong a position of uncertainty which is highly
undesirable given what we all agree is the urgency of having this matter -----
JUSTICE MOSES: That slightly goes against you, does it not, because in a way
the next stage will be consistent - I have not heard Mr Fowler yet, but I can
lay strong odds that they will then have to convene the court and ask for
permission from the Court of Appeal so that you have still got that and there
is one further stage.
PANNICK: The reality, as your Lordship well knows, is that if leave to appeal
is granted then it is treated not as an encouragement to appeal but as
promoting the likelihood of an appeal. If your Lordship is genuinely in the
position of regarding this as not a difficult point on which the Secretary of
State is most unlikely to succeed in the Court of Appeal then I do respectfully
submit that your Lordship should say so. The Secretary of State then, given
the urgency of the matter, will be encouraged by those advising them no doubt
to reflect on whether it really is desirable to prolong the agony on this or
whether it would be more sensible to sit down and consider ways of resolving
the problem. That is my submission.
JUSTICE MOSES: Yes, Mr Fowler?
FOWLER: This is a matter of very substantial importance to the Secretary of
State and is part of the present arrangements and is a matter on which the
intermediate step, if your Lordship refuses leave to apply to the Court of
Appeal itself, will almost certainly be necessary. In those circumstances I
submit it would be wrong to impose that condition, step. It is a short point.
Your Lordship has dealt with it robustly and very clearly in the judgment.
JUSTICE MOSES: The words do, yes.
FOWLER: Of course everything your Lordship has said can be taken into very
deep consideration in considering the way forward, but nevertheless there
remains very much an important point there as to whether or not consent in the
circumstances can be taken to be given and that point remains, in my
submission, alone as a matter of importance.
JUSTICE MOSES: No, I shall give permission, but I will state my reason.
matter is very important and I just have a strong hunch that whatever I say the
Secretary of State will want to take it further; I am not encouraging him to do
so. There is a general trend, as I understand the practice direction, that
where there are further points of law those are the occasions when permission
to appeal should be given. But I make it quite clear, although guilty of
hubris, that I think the point is a short, simple and clear one and if the only
criterion in granting permission to appeal is confidence in the outcome why
then I would not have granted permission for leave to appeal.
PANNICK: Thank you, my Lord.
JUSTICE MOSES: Once again I will not go on to say anything, Mr Pannick,
because we were able to deal with it because of all your help in the legal
arguments, the affidavits and in the skeleton arguments.
PANNICK: Thank you, my Lord.
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