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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Sinclair Collis Ltd, Re Application for Judicial Review [2011] ScotCS CSOH_80 (13 May 2011) URL: http://www.bailii.org/scot/cases/ScotCS/2011/2011CSOH80.html Cite as: [2011] ScotCS CSOH_80, 2011 GWD 16-377, 2011 SLT 620, [2011] CSOH 80, [2012] Eu LR 23 |
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OUTER HOUSE, COURT OF SESSION
[2011] CSOH 80
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P576/10
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OPINION OF LORD DOHERTY
in the Petition
SINCLAIR COLLIS LIMITED
Petitioners;
for
Judicial Review of the Tobacco and Primary Health Services (Scotland) Act 2010, section 9
________________
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Petitioner: Jones, Q.C., Gill; McGrigors LLP
First Respondent: Lord Boyd of Duncansby, Q.C.; Scottish Government Legal Directorate
13 May 2011
Introduction
Petition
[1] This Petition
for judicial review challenges the legality of an enactment of the Scottish
Parliament ("the Parliament"), namely section 9 of the Tobacco and Primary
Health Services (Scotland) Act 2010 ("TPHSSA 2010"). The Act
received Royal Assent on 3 March
2010. Section 9 has not
yet been commenced. I was informed that the Scottish Ministers plan to bring
it into force in October 2011. The Petitioners seek declarator that section 9
is invalid and reduction of the section. They contend that the section is
outside the legislative competence of the Parliament and is not law because it
is incompatible with Convention rights (Article 1 of the First Protocol
("A1P1")) and with Community law (Article 34 of the Treaty for the Functioning
of the European Union ("TFEU")) : Scotland Act 1998, section 29(1),
(2)(d). In addition, it is averred that section 9 is inapplicable and
unenforceable because the United
Kingdom has failed to notify
it to the Commission of the European Communities in accordance with Article 8(1)
of the Technical Standards Directive (Directive 98/34/EC).
Petitioners
[2] The Petitioners
are a wholly owned subsidiary of Imperial Tobacco Limited. They own and
operate tobacco vending machines. They are the largest such operator in the United Kingdom. As at 1 August 2010 they
owned and operated approximately 18,000 machines at approximately 17,000 sites
and employed 148 people. In Scotland they owned
and operated 1,708 machines at 1,454 sites and employed 13 people.
They import tobacco vending machines from other Member States for use in their
business.
Respondents
[3] The Petition
was intimated to the Lord Advocate ("the First Respondent") and to the
Advocate General for Scotland. The Lord Advocate lodged Answers on
behalf of the Scottish Ministers and for the public interest. The Advocate
General lodged Answers but subsequently withdrew them.
First Hearing
[4] The matter came
before me for a First Hearing. Shortly before the First Hearing the First Respondent
lodged a Minute (16 of Process). The Minute stated:
"... (T)he Scottish Ministers have decided to notify the terms of section 9 to the Commission under the Technical Standards Directive on a protective basis. An Order will be made under sections 2(2) of the European Communities Act 1972 repealing and re-enacting section 9. Before doing so the Order will be notified in draft to the Commission and the procedure under the Directive will be followed in respect of this Order. Scottish Ministers will not make or lay the Order until the resolution of this petition and accordingly section 9 TPHSSA will remain unaffected until that time..."
A copy of the draft Order was produced (7/57 of Process). Parties accepted that in the circumstances described there should be no argument in relation to Article 8(1) of the Directive at the First Hearing. They maintained that the other arguments ought to be capable of being disposed of at the First Hearing.
[5] Extensive Notes of Argument were
lodged. The First Hearing took place over a period of nine days. By far the
greater part of that period was devoted to the Community law challenge. I do
not propose to set out in detail all of the submissions made and authorities
referred to. Had I done so it would have added considerably to the length of
this Opinion. I will give an outline of the principal arguments which were
advanced. The Notes of Argument (11 and 12 of Process) are available for
reference if required.
[6] It would be remiss not to record
my appreciation of the assistance I have obtained from the thorough and well
presented submissions which were made to me. Thanks are also due to those who
arranged that copies of the productions and the authorities be available on CD
ROMS. This facilitated the hearing in court, my deliberations, and the
preparation of this Opinion.
TPHSSA 2010
Introduction
[7] The 2010 Act,
according to its long title, is,
"An Act of the Scottish Parliament to make provision about the retailing of tobacco products, including provision prohibiting the display of tobacco products and establishing a register of tobacco retailers; ... and for connected purposes"
Section 9
[8] Section 9
provides:
"9 Prohibition of vending machines for the sale of tobacco products
(1) A person who has the management or control of premises on which a vending machine is available for use commits an offence.
(2) A person guilty of an offence under subsection (1) is liable on summary conviction to a fine not exceeding level 4 on the standard scale.
(3) In this section, 'vending machine' means an automatic machine for the sale of tobacco products (regardless of whether the machine also sells other products)."
[9] The policy underlying section 9
was to improve public health by reducing the availability and attractiveness of
cigarettes to children and young people. The
aim of section 9 is to prevent tobacco products being sold by automatic vending
machines to children and young persons. The section seeks to remove a known
source of cigarettes to children and young persons, thereby reducing smoking
and improving public health.
Legislative history
[10] In Adams v Scottish Ministers 2004 SC 665 at paragraph [18]
the Second Division succinctly described the Scottish Parliament's legislative
procedure:
"The standing orders of the Scottish Parliament (Scotland Act 1998, sec 22; sched 3) provide for three stages in the legislative process (sec 36; Standing Orders, r 9.5). Stage 1 is the general debate on the Bill at which members have the opportunity to vote on its general principles (r 9.6). Stage 2 involves consideration of, and voting on, the details of the Bill in committee (r 9.7). At Stage 3 the Bill is either passed or rejected by the Parliament (r.9.8). At stage 2 and 3 the Bill can be amended (r 9.7(5); 9.8(3)). Amendments at either stage are admissible only if they are consistent with the general principles of the Bill as agreed by the Parliament at stage 1 (r 9.10(5)(c))."
(Although the Parliament's Standing Orders have been revised and amended since Adams (the current edition is the 4th edition (April 2011) and the edition in force at the time the TPHSSA was before the Parliament was the 3rd edition (2007)), the above description remains an accurate one).
[11] On 25 February 2009 the Minister for Public Health and Sport
introduced the Bill in the Parliament. The Health and Sport Committee of the
Parliament was nominated as the lead committee on the Bill. The Committee
received many submissions and heard a good deal of oral evidence which dealt
with the prohibition contained in section 9. Interested parties who made
submissions and gave evidence included the Petitioners, other representatives
of tobacco vending machine businesses, tobacco companies, smoking and
anti-smoking pressure groups, local authorities, trading standards officers,
representatives of those in the liquor licensed trade, the NHS and other health
organisations, and retailers. Full lists of those who made written submissions
and those who gave evidence are contained in Annexe B of Vol. 2 to
the Stage 1 Report (6/8 of Process). The submissions and the evidence
considered inter alia the use of age restriction mechanisms with
cigarette vending machines, including radio frequency controlled mechanisms. It
included a report from NACMO, "Radio Frequency Controlled Cigarette Vending
Machines, Preliminary Test Results" (7/26 of Process) and a report "LACORS: Test
Purchasing of Tobacco Products; Results from Local Authority Trading
Standards" (6/79 of Process).
[12] The Committee's Stage 1
Report was in favour of the general principles of the Bill including the
prohibition of tobacco vending machines. It concluded:
"78. The Committee also notes the alternative proposal put forward by operators of vending machines for a radio-controlled system based on age verification by bar staff in licensed premises. However, the Committee remains to be convinced that this system could be made to work in practice across the range of situations in which a vending machine might be installed - for example, in crowded city-centre pubs where there are many distractions for bar staff."
[13] On 24 September 2009 there was an extended debate on the Stage 1
report. There were differences of view in relation to the proposed prohibition.
The Parliament agreed to the general principles of the Bill. In its detailed
consideration at Stage 2
a member of the Committee
proposed an amendment to the prohibition to allow radio frequency controlled vending
machines to remain on licensed premises. On a division the amendment was not
agreed to. On 27 January
2010, during Stage 3,
the Parliament debated a similar proposed amendment. It was rejected with
14 MSPs voting for it and 105 voting against it (Official Report,
6/13 of Process).
Incompatibility
[14] The Scotland Act 1998, section 29
provides:
"(1) An Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament.
(2) A provision is outside that competence so far as any of the following paragraphs apply -
(d) it is incompatible with any of the Convention rights or with Community law..."
The Community law challenge: Articles 34 and 36
Introduction
[15] Article 34
is one of the articles of the Treaty for the Functioning of the European Union
(TFEU) which regulates the free movement of goods between Member States. It provides:
"Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between member states."
[16] Quantitative restrictions under Article 34
are measures which amount to a total or partial restraint on imports or goods
in transit. The phrase "measures having equivalent effect" to quantitative
restrictions is broader in scope and covers "all trading rules enacted by
Member States which are capable of hindering, directly or indirectly, actually
or potentially, intra-Community trade" (Case 8/74 Procureur du Roi
v Dassonville, [1974] ECR 837). Any other measure which hinders
access of products originating in other Member States to the market of a Member
State is also covered by that concept (Case C-110/05 Commission v Italy
[2009] ECR I-519, paragraph 37; Case C-142/05 Åklagaron v Mickelsson
and Roos [2009] ECR I-4273, paragraph 24). A national measure which
hinders imports from another Member State is caught by Article 34
even if it applies to national and imported products equally (Case C-120/78 Rewe-Zentral
("Cassis de Dijon") [1979] ECR 649, paragraphs 6,14 and 15).
[17] Article 34 is qualified by Article 36
which, so far as relevant, provides:
"The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants ... Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Members States."
[18] Measures having equivalent effect
to quantitative restrictions may be justified under Article 36 or by
"mandatory requirements" in the general interest (Case 8/74 Procureur
du Roi v Dassonville, supra, at paragraph 8). Such
mandatory requirements include the protection of health. Whether reliance is
placed on an Article 36 justification or a mandatory requirement the
criteria for justification are the same (viz. those discussed in
relation to Article 36). Accordingly, although the First Respondent
relied upon the mandatory requirements as well as Article 36, the critical
issue in relation to justification turned on Article 36.
The Petitioners' contentions: Article 34
[19] The Petitioners own and operate tobacco vending machines in Scotland. They import tobacco vending machines and spare
parts from other member states - Spain and Germany - for use in their business. The effect of section 9
coming onto force would be that the tobacco vending machine industry in Scotland would be destroyed. It was contended that the actual
effect of section 9 would be to restrict the importation of tobacco vending
machines into the United
Kingdom. The ban would
prevent the machines being used for the purpose for which they were
designed. It would be equivalent to a ban on the machines themselves. They
could not be converted in an economically viable manner for re-use dispensing
other products. With the ban in force the Petitioners would have no interest
in importing tobacco vending machines or parts and importing of them would
cease.
[20] It was submitted that this is not
a case where the ban in section 9 is a "selling arrangement" which falls
outside the scope of Article 34 (Joined Cases C-267/91 and C-268/91 Keck
and Mithouard [1993] ECR I-6097; Case C-110/05 Commission v Italy,
supra, at paragraphs 25, 57 and 58; Case C-387/93 Criminal
Proceedings v Giorgio Domingo Banchero [1995] ECR I-4663, at paragraphs 34
and 35; Case C-142/05 Åklagaron v Mickelson and Roos, supra, paragraphs 26-28:
Case C-265/06 Commission v Portugal [2008] ECR I-2245, paragraph 35;
Case C-65/05 Commission v Greece [2006] ECR I-10341; Case
C-188/04 Alfa Vassilopouos AE v Elliniko Dimosio, Nomarchiaki
Aftodiikisi Ioanninon [2006] ECR I - 8135, paragraph 19; R
(Countryside Alliance) v Attorney General [2008] 1 AC 719, per Lord Bingham of Cornhill at paragraph 30
(cf. Lord Hope of Craighead at paragraph 68); R (Lunt) v Liverpool City Council [2009] EWHC 2356 (Admin), paragraphs 65 -
74). In order to come within the Keck exception the measure in question
has itself to constitute a selling arrangement. A selling arrangement regulates
trade in cross-border goods after they had been imported. A measure which
operates to prevent imports - as here - could not qualify as a Keck
selling arrangement. A selling arrangement is "associated with the marketing
of the good rather than the characteristics of the good" (EU Commission, Free
Movement of Goods - Guide to the Application of Treaty Provisions Governing
Free Movement of Goods, page 17). The relevant quantitative restriction
on imports concerns tobacco vending machines - not tobacco. While the ban
might arguably have been categorised as a selling arrangement relating to
tobacco if the complaint had been that it was a quantitative restriction on
imports of tobacco, it is not a selling arrangement relating to tobacco vending
machines. It has nothing to do with retail arrangements for such machines:
rather, it is a prohibition on their use.
[21] The Petitioners maintained that
following the Grand Chamber's judgment in Commission v Italy, supra,
and the decision in Åklagaron, supra, it is acte clair
that Article 34 is engaged by section 9, and that there is no need to
seek a preliminary ruling from the ECJ on the issue. It is unsurprising that
in the judicial review challenge to the analogous English legislation counsel
for the Attorney General had conceded that Article 34 was engaged (R
(Sinclair Collis Limited) v Secretary of State for Health and The
Members of the National Association of Cigarette Machine Operators [2010] EWHC 3112 (Admin) at paragraph 16. (Judgment in that case was delivered
after I had taken this case to avizandum. The parties provided me with
a copy of the Judgment, but neither considered there to be any need to make
further submissions in light of it)).
The First Respondent's contentions: Article 34
[22] The First Respondent submitted that section 9 falls outside
the scope of Article 34 because it is a "selling arrangement" of the sort
described in Keck and Mithouard, supra. It was conceded that if
it is not a "selling arrangement" section 9 would be within the scope of
the Article.
[23] In Keck and Mithouard the
ECJ stated:
"[15] It is established by the case law beginning with 'Cassis de Dijon' ... that, in the absence of harmonisation of legislation, obstacles to free movement of goods which are the consequence of applying, to goods coming from other Member States where they are lawfully manufactured and marketed, rules that lay down requirements to be met by such goods (such as those relating to designation, form, size, weight, composition, presentation, labelling, packaging) constitute measures of equivalent effect prohibited by Article 30 [then Art 30 EEC, subsequently Art 28 EC, now Article 34 TFEU]. This is so even if those rules apply without distinction to all products unless their application can be justified by a public-interest objective taking precedence over the free movement of goods.
[16] By
contrast, contrary to what has previously been decided, the application to
products from other Member States of national provisions restricting or prohibiting
certain selling arrangements is not such as to hinder directly or indirectly,
actually or potentially, trade between Member States within the meaning of the Dassonville judgment (Case 8/74) so long as those provisions
apply to all relevant traders operating within the national territory and so
long as they affect in the same manner, in law and in fact, the marketing of
domestic products and of those from other Member States."
[24] The First Respondent
argued that the necessary conditions are satisfied in relation to section 9.
Section 9 is one of a series of measures concerning the sale and ancillary
marketing of tobacco. It governs the ways in which tobacco could be sold or
marketed. It regulates the points of sale of tobacco. It is not aimed at
restricting imports of tobacco vending machines from other Member States. It
is not discriminatory - it applies equally to persons from the United Kingdom and to persons from other
Contracting States. It is a selling arrangement relating to tobacco. When one
examines Keck and Mithouard and other cases where selling
arrangements had been excluded from the scope of Article 34 it could
reasonably be inferred that there would also have been other economic interests
which had been incidentally affected by the selling arrangement, but that had
not prevented it being treated as a selling arrangement outwith the scope of Article 34
(e.g. Joined Cases C-69/93 Punta Casa v Sindaco del Comune di
Capena and C258/93 PPV Comune di Torre di Quartesolo [1994] ECR I-2355; Case 387/93 Giorgio Domingo Banchero, supra). While
in Commission v Italy, supra, and Åklagaron,
supra, the Court had not been prepared to extend the Keck and
Mithouard exception to arrangements for the control of use of products,
that was not the same issue as arose here. The authorities relied upon by the
Petitioners do not vouch the proposition that the Keck exception applies
to goods only after they have been imported. In any event section 9 is
not a prohibition on tobacco vending machines entering the market: it is a
restriction on use.
[25] The First Respondent
maintained that it is acte clair that section 9 falls within the Keck
exception. There is a selling arrangement for the sale of tobacco which
impacts on the freedom of movement of other goods (tobacco vending machines). The
exception also covers tobacco vending machines (either incidentally, or by
necessary extension of Keck). If I was not disposed to accept the
First Respondent's primary argument, I should not hold that section 9
engaged Article 34. That was not acte clair. Accordingly, if it
was essential to the disposal of the Petition to decide whether section 9
engages Article 34, the appropriate course would be for me to refer the
question to the ECJ for a preliminary ruling. It would not be necessary to do
that if the First Respondent satisfied me that section 9 was justified
under Article 36.
Discussion and conclusion: Article 34
[26] The Petitioners' arguments that section 9 is not a "selling
arrangement", and that it falls within the scope of Article 34, have
considerable force. However, I do not think that the issue is acte clair.
While I am very far from persuaded by the First Respondent's primary
contention, the ECJ does not appear to have had to consider a scenario similar
to that in the present case. In those circumstances the contention is not
beyond the bounds of reasonable argument. If it was necessary to decide the
matter in order to determine this aspect of the Petitioners' challenge to section 9,
I agree with the First Respondent that a reference to the ECJ would be
appropriate. But no good
purpose would be served by seeking a preliminary ruling on this matter if it is
clear that I would be bound to hold that section 9 is justified and
proportionate (cf. R (Countryside Alliance)
v Attorney General, supra, paragraphs 35, 50, 73, 88).
The Petitioners' contentions: Article 36
[27] The Petitioners submitted that the burden is on the First
Respondent to show section 9 is justified. They accepted (for the purposes
of these proceedings) that the Parliament's aim in enacting section 9 is
to protect the health and life of humans. However, section 9 could not be
justified under Article 36 or as a mandatory requirement. It is not
proportionate. It goes beyond what is necessary. It is not the least
restrictive measure capable of achieving the Parliament's aim (Case C - 14/2 ATRAL
SA v Belgian State, CJEU 8 May 2003, at paragraphs 64 - 69; Case
C - 261/81 Walter Rau Lebensmittelwerke v De Smedt PvbA [1982] ECR 3961, at paragraphs 2, 12,16 and 17; Case C- 3/99 Cidrerie Ruwet
SA v Cidre Stassen SA [2000] ECR I-8749 at paragraph 50; Åklagaran,
supra, paragraphs 30 - 34). There was not a proper factual basis
justifying section 9, and the Parliament had not sought to achieve its aim
in a consistent and systematic manner. While there is no authority in the
context of Article 36 which vouches a requirement for restrictions to be
consistent and systematic, such a requirement should be inferred by reading
across from establishment cases under Article 43: Case C-169/07 Hartlauer
Handelsgesellschaft mbH v Wiener Landesregierung [2009] ECR
I-1721 at paragraphs 55 and 63; Case C-500/06 Corporación
Dermoestética SA v To Me Group Advertising Media [2008] ECR I-5785
at paragraph 35. There was no evidence that the Parliament considered, or
was even aware of, the fact that the restriction in section 9 engaged Article 34
and required to be justified under Article 36. There is a less
restrictive alternative to a tobacco vending machine ban that could achieve the
aim of preventing children and under eighteens from having access to cigarettes
from machines, namely putting age control measures in place, and, in
particular, permitting vending of tobacco from radio frequency controlled machines.
That alternative had not been given proper consideration. Section 9 did
not seek to achieve the legislative aim in a consistent and systematic manner
because radio frequency controlled machines were no worse a source of
cigarettes to under eighteens than independent newsagents, yet the latter were
not prohibited from selling cigarettes. Both methods rely on face to face
verification of age by staff, and the incidence of illegal sales to under
eighteens from each source is similar (23% for independent newsagents according
to the LACORS Test Purchase Report (6/79 of Process); and 20% for remote
controlled machines according to the NACMO Preliminary Test Results for
Radio Frequency Controlled Cigarette Machines (7/26 of Process)). Further, it
was said to be inconsistent and unsystematic that tobacco vending machines are
to be banned but that machines may be used for cigarette storage behind bars.
[28] The Petitioners recognised that
it is not enough for them to point to the absence of explicit consideration of
Articles 34 and 36 by the Parliament, and that the task of the Court
is to determine objectively whether section 9 is justified under Article 36.
The Petitioners accepted that the Court required to allow the Parliament a
margin of discretion, but maintained that the width of the margin is context
specific. A greater margin of discretion would normally be attributable to a
legislature than to other decision makers: but it was important to remember
the nature of the Scottish Parliament. It is a creature of the Scotland Act 1998.
That Act defines, and limits, its competence. Give its nature as a subordinate
legislature with limited competence it ought not to be accorded as wide a
margin of discretion as would be accorded to the United Kingdom Parliament. While
with legislation involving social policy or moral issues the appropriate margin
is wider than with measures dealing with ordinary commercial activities, it was
contended that that did not assist the First Respondent because Section 9
is simply a measure directed towards the regulation of trading activity. This
was not the sort of case where the court could only interfere if it concluded
that section 9 was manifestly unreasonable or manifestly without
foundation. Rather, there had to be a close and careful examination of the
facts in order to see if there was justification for section 9 (R
(Countryside Alliance) v Attorney General, supra, per Lord Hope
of Craighead at paragraph 78; R v Shayler [2003] 1 AC 247 per Lord Hope of Craighead at paragraph 61).
There was not a proper factual basis for banning vending machines. The less
restrictive course of permitting machines with age restriction measures - in
particular, requiring them to be fitted with radio frequency controlled mechanisms
- was appropriate and would be effective. The Regulatory Impact Assessment
("RIA") (7/9 of Process) had contained errors. These meant that it was useless.
It was not capable of providing anything by way of justification. The number
of machines in Scotland had been underestimated and the proportion
of cigarettes obtained from machines by under eighteens had been
overestimated. The RIA had assumed, as had the Parliament, - without any
relevant research or other proper factual basis - that some of the under
eighteens who would have obtained cigarettes from machines would not
obtain them from other sources (such as illicit dealers). Section 9 was
not justified and was not proportionate.
The First Respondent's contentions: Article 36
[29] In justifying section 9 counsel
for the First Respondent reminded me that the health and life of humans ranks
foremost among the interests protected by Article 36. It is for Member
States to decide the degree of protection for children and young people they wish
to assure, and the way in which that degree of protection is to be achieved. Member
States enjoy a margin of appreciation in deciding what level of protection is
appropriate, and in the context of the protection of health and life the margin
of appreciation is a wide one. The Court should be careful to observe the
boundaries between its role and the role of the legislature. Given the subject
matter of section 9, its aim, the nature of the lawmaker, and the
legislative history, the margin of discretion enjoyed by the Parliament was
wide. The margin applied not only to the Parliament's choice of policy aims,
but also to the choice of measures taken in furtherance of those aims. The
measures had to be proportionate. They had to be appropriate and not go beyond
what was necessary. The court ought only to interfere if the measures were
manifestly inappropriate or manifestly in error. If there was material which
was capable of providing justification the Court should not second guess the
Parliament. Reference was made to Case C-322/1 Deutscher v 0800 Doc
Morris [2003] ECR I-14887 at paragraph 103; Commission v Italy,
supra, paragraphs 65, 67; Case C-491/01 R (British American
Tobacco Investments Ltd and Imperial Tobacco Ltd) v Secretary of State
for Health [2002] ECR I -11453 at paragraphs 122 -123 of the
Judgment and at paragraphs 103-106 and 119-121 of the Advocate General's
Opinion; R v Secretary of State for Health, ex parte Eastside Cheese
Co [1999] 3 CMLR 123 at paragraphs 41, 43-46, 48.
[30] In exercising their
judgment MSPs had a great deal of evidence before them. As well as the
evidence of witnesses, they had the representations of diverse interest groups,
the views of constituents, and their own knowledge and experience. They were
entitled to consider all of this. They were also entitled to have regard to
social, economic and political considerations.
[31] The Parliament was
not obliged to positively prove that there was no other conceivable course
which would be as effective as a ban in reducing access by children and young people
to cigarettes. The fact that the measure chosen is clear and simple to enforce
was a relevant consideration.
[32] The Petitioners
exaggerated the significance of the RIA and ignored the great deal of other
material at MSPs' disposal which supported a ban. The RIA was not a document
which the Parliament had required to have. It was just one piece of evidence
within the very large amount of material - evidence, views and other
considerations - which had been before the Parliament. It was plain from
the proceedings of the Parliament and from the wealth of material before it
that the RIA had not been central to MSPs' deliberations. In so far as the RIA
was criticised, for the most part these were criticisms which had been
canvassed during the course of the Bill. Section 9 is a very recently
enacted measure which was very fully considered by a democratically elected
legislature. In light of the material available to the Parliament it could not
be said that there was no objective justification for section 9. It
pursued the protection of life and health. It was appropriate. It was
proportionate. The Parliament was wholly entitled to take (and had taken) the
view that the suggested less restrictive measure would not be as appropriate or
effective as section 9.
Discussion and conclusions: Article 36
Introduction
[33] In
ATRAL, supra, the Court of Justice stated (in relation to what were
formerly Articles 28 and 30 EC, and are now Articles 34 and
36 TFEU):
"64. A national provision which is contrary to Article 28 EC may be justified only by one of the public-interest reasons laid down in Article 30 EC or by one of the overriding requirements referred to in the judgments of the Court (see, in particular, Case 120/78 Rewe-Zentral ("Cassis de Dijon") [1979] ECR 649, paragraph 8). In either case, the national provision must be appropriate for securing the attainment of that objective and not go beyond what was necessary in order to attain it (see Canal Satellite Digital, cited above, paragraph 33 and Joined Cases C-388/00 and C429/00 Radiosistemi [2002] ECR I-5845, paragraphs 40-42).
69. ... (I)t is for the Member State which claims to have a reason justifying a restriction on the free movement of goods to demonstrate specifically the existence of a reason relating to the public interest, the necessity for the restriction in question and that the restriction is proportionate in relation to the objective pursued."
[34] In R (Countryside Alliance) v Attorney General, supra, Lord Hope
of Craighead observed (at paragraph 79):
"It is well understood that measures which are liable to constitute restrictions on the free movement of goods and services may be justified if they pursue legitimate aims and they are proportionate to those aims."
[35] The general aim of section 9
is the protection of health and life of humans. More particularly, the aim is
to reduce the attractiveness and availability of cigarettes to children and
young people by removing vending machines as a source of cigarettes for them,
and thereby reducing the incidence of under-age smoking.
Margin of discretion
[36] Both
parties acknowledged that the court should accord a margin of discretion to the
Parliament's judgment: they were in dispute as to the ambit of that margin. In
this connection I find the following observations of Lord Bingham of
Cornhill to be instructive:
"... The margin of appreciation for a decision maker (which includes, in this context, a national legislature) may be broad or narrow. The margin is broadest where the national court is concerned with primary legislation enacted by its own legislature in an area where a general policy of the Community must be given effect in the particular circumstances of the Member State in question. The margin narrows gradually rather than abruptly with changes in the character of the decision-maker and the scope of what has to be decided ...."
(R v Secretary of State for Health, ex parte Eastside Cheese Co, supra, at paragraph [48]).
"... The degree of respect to be shown to the considered judgment of a democratic assembly will vary according to the subject matter and the circumstances. But the present case seems to me pre-eminently one in which respect should be shown to what the House of Commons decided. The democratic process is liable to be subverted if, on a question of moral and political judgment, opponents of the Act achieve through the courts what they could not achieve in Parliament."
(R (Countryside Alliance) v Attorney General, supra, paragraph 45)
[37] The Scottish
Parliament is not a sovereign legislature. It was constituted by the Scotland Act 1998
and its powers derive from that Act (Whaley v Lord Watson
2000 SC 340, per Lord President Rodger at pages 348 - 9). For
the purposes of the Human Rights Act 1998, Acts of the Scottish Parliament
are "subordinate legislation" not "primary legislation" (Section 21(1)). More
generally, there has been judicial consideration as to the nature and proper
characterisation of enactments of the Scottish Parliament. (There has also
been much academic discussion: see e.g., McHarg, "What is Delegated
Legislation?" [2006] P.L. 539; Craig and Walters, "The Courts, Devolution
and Judicial Review" [1999] P.L. 274; Burrows, "Devolution",
Chapter 3; Hadfield, "The Foundations of Judicial Review, Devolved Power
and Delegated Power" (Chapter 9 in Forsyth, "Judicial Review and the
Constitution"); Mullen, "The AXA Insurance case: challenging Acts of the
Scottish Parliament for Irrationality", 2010 SLT (News) 39 at pp. 43-44).
In Adams v Advocate General for
Scotland 2003 SC 171 Lord Nimmo Smith (at paragraph [62])
suggested that Acts of the Scottish Parliament were sui generis, but
that they were "of a character which has far more in common with a public
general statute than with subordinate legislation". In another Outer House
decision, AXA General Insurance Limited, Petitioners, 2010 SLT 179, Lord Emslie
was inclined to agree with Lord Nimmo Smith's description of them being sui
generis: he characterised them as "in the nature of primary legislation
for Scotland" (at paragraph [142]). Authoritive guidance has now been
provided by the Inner House (AXA General Insurance Limited v Lord Advocate
and Others [2011] CSIH 31). In paragraph 87 (of the Opinion of the
Court) the First Division opined:
"Acts of the Scottish Parliament - legislation sui generis?
[87] We, like the Lord Ordinary
(paragraph [142]), are inclined to agree with Lord Nimmo Smith's
description - at paragraph [62] of his Opinion in Adams v
Advocate General - of legislation enacted by the Scottish
Parliament as sui generis. Notwithstanding its classification for the
purposes of the Human Rights Act 1998 as "subordinate
legislation" (section 21(1)), it is "law" essentially of a
primary nature. The processes which lead to its enactment include
parliamentary procedure which involves scrutiny at various stages by
democratically elected representatives who ultimately vote on whether the Bill
in question should be enacted and, if so, in what terms. Having passed through
these stages the Bill then receives the Royal Assent. These procedures, taken
together, distinguish legislation so enacted from acts or instruments subject
to judicial review on traditional grounds, including from executive acts of the
Scottish Ministers and from subordinate legislation - even subordinate
legislation or other instruments which have been approved by the Westminster
Parliament. They are much more proximate to Acts passed at Westminster. Other features of the Scotland Act support
that proximity: the exclusion of procedural challenge (section 28(5)) and
the provision for judicial notice (section 28(6)). On the other hand,
there is nothing, in our view, either expressly or impliedly in the Scotland Act
which gives to enactments of the Scottish Parliament the status of Acts of the
Parliament of the United
Kingdom. That is not to
ignore the significance of the Scotland Act as of real constitutional
importance. But it is to recognise that, however wide-ranging the powers
conferred on the Scottish Parliament, its establishment did not involve the
ceding to it of "sovereignty" (whatever precisely that may mean) even
within its restricted statutory field of competence: its legislation is open
to abrogation or supersession by Acts of the Westminster Parliament (section 28(7))."
[38] It is unnecessary for present
purposes to reach a concluded view as to the proper nature and characterisation
of Acts of the Scottish Parliament. It is clear that they have few of the
characteristics of secondary legislation. They are " "law" essentially of a
primary nature" (AXA General Insurance Limited v Lord Advocate,
supra, paragraph [87]). They are the product of a democratically
elected legislature and its full and democratic parliamentary processes, rather
than being an exercise of delegated rule making according to truncated
procedures for scrutiny and enactment (AXA General Insurance Limited v Lord Advocate,
supra, paragraph [87]; see also Mullen, supra, p. 44). On
devolved matters the Parliament exercises plenary powers to legislate - subject
only to abrogation or supersession by Acts of the Westminster Parliament. It
seems to me to be beyond argument that Acts of the Scottish Parliament share
most of the characteristics of primary legislation and are far more proximate
to it than to ordinary subordinate legislation. On the spectrum of
decision-makers the Scottish Parliament occupies a place close to that of the
national legislature. In my opinion an enactment of the Scottish Parliament should
be accorded a margin of discretion similar to, and approaching, that which
would have been accorded to the measure had it been enacted by Parliament at
Westminster.
[39] I find unpersuasive
the Petitioners' contention that section 9 should be regarded simply as a
measure regulating trading, and which involves no considerations of social
policy or social reform. In my view that is a blinkered and erroneous approach.
Section 9 is motivated by health concerns about smoking, and a resultant
policy of reducing the availability and attractiveness of tobacco to children
and young persons. Its aim is to prevent tobacco products being sold by
automatic vending machines to children and young persons. It seeks to remove a
known source of cigarettes for children and young persons, thereby reducing
smoking and improving public health. I think it clear that section 9
gives effect to a social policy choice by the Parliament and implements a
social reform.
[40] Accordingly, the
nature of the decision maker, and the subject matter and context of the
legislation, call for a wide rather than a narrow margin of discretion being
accorded by the Court to the Parliament's judgment that section 9 should
be enacted. I do not think that in the present context the sort of close and
exacting scrutiny discussed in R v Shayler, supra, is
appropriate. That would be too intensive a standard of review in the
circumstances of this legislation.
Proper factual basis?
[41] The
Petitioners contend that examination of the materials before the Parliament
discloses no proper factual basis capable of justifying the enactment of section 9.
I disagree.
[42] I bear in mind the
observations of the Second Division in Adams v Scottish Ministers, supra, paragraphs [38]
and [39]:
"[38] Counsel for the petitioners submitted ... that the Parliament had reached its decision on this question on insufficient evidence or, at best, on evidence that was outweighed by other more authoritative evidence.
[39] In our
opinion, counsel for the petitioners have taken a wrong approach to this
question. The factual basis upon which a legislature decides to enact a
specific provision is not governed by the rules of sufficiency and
admissibility of evidence that would apply in a court of law. A legislator is
entitled to bring to bear on his decision his personal knowledge gained from
his experience of life and from the representations that he may receive on
current political topics from informants, pressure groups, committee witnesses,
and so on. It is entirely for the judgment and experience of the individual
legislator to decide which competing factual account he prefers. He is
entitled to accept any account that in his judgment is reliable, no matter that
it may be contradicted from other sources."
[43] In my opinion the
material available to the Parliament provides sufficient objective
justification for section 9. I have already briefly described the
legislative history and the wide variety and nature of the representations made
to, and considered by, the Parliament. Some of that material was summarised by
the First Respondent in the Appendices to her Note of Argument.
[44] I agree with the
First Respondent that the Petitioners overstate the significance of the RIA in
the legislative process. It was not a document the Parliament required to have.
It was one piece of evidence within a very much larger corpus of material
before the Parliament. Whether its contents were wholly accurate or not
appears to me to be of marginal importance in determining whether the enactment
of section 9 is justifiable and proportionate: it is very far from being
the determinative issue.
[45] However, it is
appropriate that I say something about the criticisms which were advanced, not
least because I do not concur with the Petitioners' submission that errors in
the RIA resulted in it being flawed and useless. The RIA did overestimate the
number of tobacco vending machines in Scotland, and the number of people employed here in the tobacco vending
industry was underestimated. These were matters which were very clearly
brought out before the Parliament, as were the more accurate figures. The RIA
assumed that 10% of current sales to under eighteens were from vending machines,
based on data from a SALSUS study: whereas in fact the SALSUS study showed
that 10% of under eighteens indicated vending machines were a usual
source of cigarettes (not their only source of cigarettes). Thus, it
was argued, taking that percentage from SALSUS overstated cigarette machine
usage. I recognise this point has some force. Using the 10% figure made no
adjustment for the fact that at least some of those with machines as a
usual source also had other usual sources. Nevertheless, I consider that the
SALSUS figure provided a legitimate, if imperfect, proxy for usage of cigarette machines
by under eighteens; and that, as with the criticisms previously mentioned,
this criticism was a matter the Parliament was aware of when exercising its
judgment. In addition, even if use of the SALSUS percentage in the RIA
overstated sales to under eighteens from machines, the overstatement was
common to both Option 2 (Introduction of Age Restricting Mechanisms) and Option 3
(Ban Sale of Tobacco from Vending Machines). Comparison of those two options
still provided guidance as to their relative costs and benefits. Under Option 3
the reduction in cigarettes sold to under eighteens is significantly greater
than under Option 2 (four point two five million as opposed to 3.2 million),
with resultant improvement in health and saving of lives.
[46] Further, I do not
accept the Petitioners' argument that the authors of the RIA, and the
Parliament, were wrong to proceed on the basis that not all of the purchases
currently made by under eighteens would be displaced to other sources: and
that there required to be clear and positive research or other empirical
evidence showing that would be the effect of the ban before section 9
could be enacted. In my opinion it was (and is) a reasonable assumption, open
to the authors of the RIA and to the Parliament, that if children are prevented
from using cigarette machines some under-age smokers will smoke fewer
cigarettes (cf. R (Sinclair Collins Limited) v Secretary of State
for Health, supra, paragraph 92; R (Countryside Alliance) v Attorney General, supra, paragraph 42
(at page 755B-C)). The actual displacement assumption used by the RIA
was informed by the SALSUS data and the reporting of recent test purchasing. It
was in line with assumptions as to displacement made by the Department of
Health in England and Wales. Moreover, the displacement assumed
(70%) did not take account of the effect which any of the other provisions of
the 2010 Act would tend to have in increasing compliance with the law
prohibiting sale of cigarettes to, and the purchase of cigarettes by, under
eighteens. Increased compliance would be likely to reduce displacement.
Least restrictive measure?
[47] Both
parties accepted that the application of the proportionality test included
consideration of whether the measure was the least restrictive measure which
could achieve the aim. The difference between them was a matter of emphasis. The
Petitioners' position was that it is essential that the measure was the least
restrictive available. The First Respondent contended that whether it was or
not is a factor to be taken into account but it is not necessarily
determinative.
[48] If the position had
been that a satisfactory less restrictive measure was available which
would have been equally effective in achieving the Parliament's aim, section 9
would have been a disproportionate exercise of the Parliament's legislative
power: see Commission v Italy, supra, para. 59 (and the case-law cited) and the recent decision in
Ker-Optika bt v ANTSZ Del-dunantuli Regionalis Intezete, [2010] EUECJ C-108/09 (Third Chamber) (2 December 2010).
[49] I am clear that on
the material before it the Parliament was entitled to - and did - decide
that the suggested alternative of permitting machines with age restriction
mechanisms - whether radio frequency or other devices - would not be as
satisfactory or effective as section 9 would be in achieving the aim of
reducing under-age smoking. I do not rehearse all of the relevant material. Some
of it is set out in Schedule 4 to the First Respondent's Note of Argument.
It included a report from
NACMO, "Radio Frequency Controlled Cigarette Vending Machines, Preliminary Test
Results" (7/26 of Process) which indicated that in premises using such machines
there was still a 20% failure rate, even though the survey tests were not
carried out during times when premises were busy. It
was plain to MSPs that radio frequency controlled machines would depend upon
verification by bar staff that the person wishing to use the machine was
eighteen or over and also upon the staff being attentive as to whom the
cigarettes were actually dispensed. MSPs were aware that in busy licensed
premises in Scotland there are many demands upon
staff's attention. In such premises it is not difficult to envisage circumstances
where there would be failure to seek verification of age; and where staff
would not, or could not, take time from attending to customers' orders to
observe to whom cigarettes were dispensed. MSPs will have been aware that in
many busy premises there are often times when staff behind the bar cannot
physically see past the throng of customers pressing at the bar or standing in
front of the bar area. MSPs were fully entitled to, and did, draw on their
experience of conditions in licensed premises in Scotland in enacting section 9 and in
considering and rejecting the suggested alternative measure. Other relevant
considerations (within the material that MSPs were entitled to have regard to)
were that if tobacco vending machines were to continue to be permitted their
effect would be to advertise or display (or at the very least draw attention
to) cigarettes for sale; and that a ban would be much clearer and simpler to
operate and enforce than the proposed alternative.
Consistent and systematic
approach?
[50] I was referred to no authority dealing with
Article 36 which vouches it is an essential requirement
of justification and proportionality that in imposing restrictions a lawmaker
must always seek to achieve its object in a consistent and systematic manner
(and cf. Lord Bingham of Cornhill's observations (in a different
context) at page 754H of R(Countryside Alliance)
v Attorney General, supra). I accept that whether an aim is pursued in
a consistent and systematic manner may be relevant when considering the
proportionality of a restriction. However, I am not persuaded that the matters
adverted to by the Petitioners show that the Parliament was not pursuing its
aim in such a manner.
[51] I think it disingenuous to
equiparate sales from machines with sales by independent newsagents. With
sales by newsagents verification of age and delivery of cigarettes occur
contemporaneously in a single transaction between the seller and the purchaser:
not so with sales from radio frequency controlled machines. Comparison
between the compliance/failure rates for independent newsagents in the LACORS
report and for radio frequency controlled machines in the NACMO report does not
appear to me to be helpful or illuminative. Material before the Parliament
indicated very clearly that the failure rate with machines generally (e.g. 41%
in the LACORS report) was higher than that with independent newsagents: and,
for the reasons discussed above, the 20% failure rate disclosed in the NACMO
report is likely to significantly understate the problem.
[52] I reject the suggestion that
allowing machines to be used for cigarette storage behind bars gives rise to
inconsistency. I think it plain that such storage machines would not be used
as tobacco vending machines - the contract of sale would be between the
purchaser and the publican, with delivery of the cigarettes being made by bar
staff to the purchaser. Where machines are used as tobacco vending
machines the contract of sale is with the vending machine operator and the cigarettes
are delivered by the machine to the purchaser. A storage machine would not be
"available for use" as "an automatic machine for the sale of tobacco products"
(section 9).
Proportionality
[53] The protection of public health and life is a very important
objective which carries great weight in the balancing exercise (see e.g. R
v Secretary of State for Health, ex parte Eastside Cheese Co, supra,
paragraph [43]).
[54] While it is not
necessary that an impediment to the free movement of goods be direct and
intended for a measure to be prohibited by Article 34, the absence of such
circumstances may be material, as may be the extent of the restriction.
"... (T)he extent of the restriction has a part to play in the assessment of proportionality...So too is the fact that it is not discriminatory ... There is no indication whatever that the restrictions that have been enacted in this case were aimed at intra-Community trade. They were aimed entirely at activities carried on within our own member state, as a measure of social policy. Such interference as there has been and is likely to be with the free movement of goods and the free provision of services between other member states is purely incidental. It is trivial in comparison with the widespread interference in these respects within the domestic market."
(R (Countryside Alliance) v Attorney General, supra, per Lord Hope of Craighead at paragraph 87). There are dicta of Lord Bingham (paragraph 50) and Baroness Hale (paragraph 131) to similar effect.
[55] In my opinion those
observations may be applied mutatis mutandis to the present case. Section 9
was not directed towards restricting imports of cigarette machines and parts. Its
aim was to prevent under eighteens from having access to cigarettes from vending
machines. Any interference with the free movement of goods is incidental to
the interference with the operation of cigarette vending machines in the
domestic market.
[56] As I have said, the
context is that the foremost of the public interest reasons for derogation
exists - the protection of life and health of humans. I have already discussed
the large body of material at MSPs' disposal. Within it was material
indicating that there was a significant problem with children and under
eighteens obtaining cigarettes from machines; that age-restriction
mechanisms would not resolve the problem, and, in particular, that radio
frequency controlled machines would not be as satisfactory or effective as
a ban in preventing children and under eighteens from obtaining cigarettes from machines.
Criticisms could be - and were - made of this material. It was
primarily for the Parliament to judge whether they were well founded or not.
[57] I am satisfied that section 9
struck a fair balance between the public interest and the interests of those
affected by the restriction on the free movement of goods which it gave rise to.
Neither the measure employed, nor the disadvantages caused by the restriction
on free movement of goods, are disproportionate to the aim pursued.
Conclusion: Article 36
[58] I
have reached the clear view that the Community law challenge is not well
founded. I am satisfied that there is sufficient objective justification for section 9,
and that the section is appropriate and proportionate. It was open to the
Parliament to enact it.
The Convention rights challenge: Article 1 of the First Protocol, ECHR ("A1P1")
Introduction
[59] A1P1 provides:
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties".
[60] The ECtHR has explained the
relationship between the first and second paragraphs of A1P1:
"55. As the Court has often held, Article 1 guarantees in substance the right of property. It comprises three distinct rules. The first, which is expressed in the first sentence of the first paragraph and is of a general nature, lays down the principle of peaceful enjoyment of property. The second, in the second sentence of the same paragraph, covers deprivation of possessions and makes it subject to certain conditions. The third, contained in the second paragraph, recognises that the Contracting States are entitled to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
(Gasus Dosier und Fordertechnik GmbH v The Netherlands (1995) EHRR 403).
[61] In SRM Global Master Fund LP
& Others v The Commissioners of Her Majesty's Treasury [2009] EWCA Civ 788 the Court of Appeal identified three principles in applying A1P1:
"As it seems to me the jurisprudence has established three governing principles....They are (1) the need for a fair balance to be struck between public interest and private right; (2) the principle of proportionality; (3) the doctrine of the margin of appreciation."
(Laws LJ at paragraph 43).
The Petitioners' contentions: A1P1
[62] The Petitioners argued that a ban on tobacco vending machines
infringes their right to peaceful enjoyment of their assets, viz. their
tobacco vending machines and, ultimately, their business and goodwill. A1P1
was engaged. It was accepted that the Parliament had a discretion as to how to
strike the balance between the public interest and the private interests of the
Petitioners. However, for much the same reasons as the Petitioners advanced in
relation to the issue of justification in the EC claim, in enacting section 9
the Parliament had failed to strike a fair balance between those interests. It
was incumbent on the First Respondent to demonstrate that there was a clear and
proportionate justification for section 9 (R (Laporte) v Chief
Constable of Gloucestershire Constabulary [2007] 2 AC 105 at paragraphs 38 and 106). A close and
penetrating examination of the factual basis of the justification was needed (R
v Shayler, supra, paragraphs 61, 67-71). The circumstances
here were to be contrasted with those in R (Countryside Alliance)
v Attorney General, supra, and those in Adams v Scottish Ministers, supra. In each
of those cases at least part of the justification was based on a moral judgment
by legislators. That was not the case here. It was submitted that there was
no sufficient evidential basis for the Parliament to have struck the balance in
favour of a ban. The solution of having radio frequency controlled machines
could equally have prevented access to cigarettes from machines by under
eighteens. It would have been less restrictive of, and less damaging to,
private rights. The fact that no compensation had been offered to the
Petitioners for the interference with their property rights was a matter which
ought to be taken into account when considering the fairness of the balance
struck (Draon v France (2006) 42 EHRR 40 at paragraphs 79
and 85). In the circumstances the Parliament's judgment was "manifestly
without reasonable foundation" (Jahn and Others v Germany (2006) 42 EHRR 49 at paragraph 91).
The First Respondent's contentions: A1P1
[63] The First Respondent submitted that the interference with the
Petitioners' possessions is a control of use not a deprivation of possessions
(Sporrong and Lönnroth v Sweden (1983) 5 EHRR 35 at paragraphs 62,
63; JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR 45 at paragraphs 64
- 66). The control of use is in the general interest - directed to the
protection of health and life. In control of use cases the absence of
compensation is a relevant factor but a fair balance could be struck between
public and private interests without compensation being offered (James v
United Kingdom (1986) 8 EHRR 123 at paragraph 54; JA Pye
(Oxford) Ltd v United Kingdom, supra, paragraphs 75, 79).
Here a fair balance was struck without the offer of compensation. For
essentially the same reasons founded upon in response to the Community law
challenge, it was well within the Parliament's margin of discretion to strike
the balance in favour of the public interest and to enact section 9. It
could not be said that the Parliament's judgment was "manifestly without
reasonable foundation" (James v United Kingdom, supra, at paragraph 46; Jahn
and Others v Germany, supra, at paragraph 91).
Discussion and conclusions on Convention
rights challenge
[64] It is common
ground that A1P1 is engaged by section 9. The contentious matter is
whether the interference with the Petitioners' possessions is justified in the
public interest. There is a legitimate public interest in preventing under
eighteens from having access to cigarettes from vending machines. The issue is
whether section 9 is an appropriate and proportionate means of achieving
that aim.
[65] For largely the same reasons as
led me to reject the Community law challenge I am satisfied that the
interference with the Petitioners' right to peaceful enjoyment of their
possessions is justifiable in the public interest and is proportionate. It is
not necessary to repeat those reasons. There was material at the Parliament's
disposal which provided a sufficient basis to justify section 9's
enactment. On the basis of that material the Parliament was entitled to strike
the balance in favour of the public interest. Neither the
means employed, nor the disadvantages caused by the interference with the
Petitioners' right to peaceful enjoyment of their possessions, are
disproportionate to the aim pursued. The Parliament's judgement to
enact section 9 was not manifestly without reasonable foundation (JA
Pye (Oxford) Ltd v United
Kingdom, supra, at paragraph 75).
[66] In reaching those conclusions I
take account of the fact that no offer of compensation has been made to the
Petitioners: that is plainly a matter which is relevant to the balancing
exercise. However, in a control of use case - which I accept this is (see e.g.
the observations of Lord Bingham of Cornhill in R (Countryside Alliance)
v Attorney General, supra, at paragraph 20) - compensation
is not a prerequisite of proportionality. In such cases whether (and if so, to
what extent) compensation should be provided is normally a matter for the
discretionary area of judgment of the legislature (Adams v Advocate
General, supra, at paragraph 130; Adams v Scottish
Ministers, supra, at paragraphs [50], [96], [103], [104]); and
the margin of discretion is a wide one (JA Pye (Oxford) Ltd v United
Kingdom, supra, paragraphs 75, 79; AXA General Insurance
Limited v Lord Advocate, supra, paragraph [147]; R
v Secretary of State for Health, ex parte Eastside Cheese Co, supra,
paragraphs [57]-[59]). In the whole circumstances of this case I am
satisfied that the Parliament was entitled to proceed as it did. Those
circumstances include the fact that the interference results from a measure
designed to implement a social reform with a view to protecting health and life;
and the fact that there were within the material before the Parliament
indications of potential alternative uses of vending machines and possible
avenues for business diversification. I do not overlook the fact that the
suggested alternative uses and business diversification were the subject of
considerable criticism. While it seems to me to be likely that resort to such
options would, at best, mitigate, rather than avoid, losses to the Petitioners,
I do not think that the Parliament was bound to disregard them. In any event,
it is not for me to substitute my own views for the Parliament's judgment, but
to review the basis of that judgment and decide whether it is manifestly
without reasonable foundation. I am not persuaded that Parliament exceeded or
misapplied its discretionary area of judgment.
Decision
[67] It follows that
neither the Community law challenge nor the Convention rights challenge is
well founded. Section 9 is not outside the legislative competence of the
Parliament (Scotland Act 1998, section 29(1), (2)(d)).
[68] As I have held that section 9
is justified under Article 36 TFEU it is neither necessary nor appropriate
to seek a preliminary ruling from the ECJ on the question whether section 9
falls within the scope of Article 34.
Disposal
[69] I shall sustain
the third plea-in-law for the First Respondent and repel the first plea-in-law
for the Petitioners. The effect is to refuse the Petition in so far as it is
founded on section 9 being outside the Parliament's legislative competence.
All that remains of the Petition is the challenge founded on the Technical Standards
Directive.