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England and Wales Court of Appeal (Civil Division) Decisions


You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> R v HM Treasury, ex p. Smedley [1984] EWCA Civ 7 (19 December 1984)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/1984/7.html
Cite as: [1984] EWCA Civ 7, [1985] 2 WLR 576, [1985] QB 657

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JISCBAILII_CASE_CONSTITUTIONAL

BAILII Citation Number: [1984] EWCA Civ 7

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (Civil Division)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (DIVISIONAL COURT)
(MR. JUSTICE WOOLF)

Royal Courts of Justice.
19th December 1984.

B e f o r e :

THE MASTER OF THE ROLLS (Sir John Donaldson]
LORD JUSTICE SLADE
and
LORD JUSTICE LLOYD

____________________

REGINA

v.

HER MAJESTY'S TREASURY

EX PARTE WILLIAM OLIVER SMEDLEY

____________________

(Transcript of the Shorthand Notes of the Association of Official Shorthandwriters Ltd., Room 392, Royal Courts of Justice, and 2 New Square, Lincoln's Inn, London, W.C.2).

____________________

MR. LEOLIN PRICE, Q.C., MR. JOHN McDONNEL, Q.C. and MR. MICHAEL ASHE (instructed by Messrs. Bower Cotton & Bower) appeared on behalf of the (Applicant) Appellant.
MR. JOHN LAWS (instructed by the Treasury Solicitor) appeared on behalf of the (Respondent) Respondent.

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    THE MASTER OF THE ROLLS: Mr. William Oliver Smedley is, I am sure, a man of many parts. Today he seeks the assistance of the court in his capacity as Mr. Smedley, British Taxpayer and Elector. What troubles him is an expressed intention by H.M. Treasury to pay the European Community a sum in excess of 121.5 million out of the Consolidated Fund and to do so without seeking the authority of Parliament in the form of an Appropriation Act or other similar statute. Instead, it would seem that the Treasury proposes to operate the special procedure provided by section 1 of the European Communities Act 1972, which involves laying a draft Order in Council before Parliament and, if that draft Order is approved by affirmative resolution of both Houses of Parliament and an Order in Council is in fact made in those terms, to make the payment on the authority of section 2(3) of that Act.

    On the 28th November Mr. Smedley obtained leave from Mr. Justice Hodgson to apply for relief by way of judicial review. His application came before Mr. Justice Woolf on the 6th December and was dismissed on the 7th December. His appeal to this court was heard on the 12th and 13th December and, but for the fact that we received a message to the effect that a judgment given today would be as satisfactory as one given earlier and we welcomed the opportunity to put our judgments in to writing, had intended to give judgment on the 14th December. Bearing in mind that at each stage the matter has been fully argued, there can be and is no complaint that the courts or the practitioners have been dilatory. Indeed in some other jurisdictions the timetable would be regarded with some surprise, not to say envy. I mention the matter not in any spirit of complacency, but merely in order to counterbalance the well justified complaints which are sometimes made of the law's delays.

    Section 1(2) of the European Communities Act 1972 defines the expressions "the Treaties" and "the Community Treaties" as they appear in the Act. It does so by referring to certain scheduled pre-accession treaties and to three other categories of treaty. Two of these three categories cover respectively the United Kingdom Accession Treaty and the Council Accession Decision both of the 22nd January, 1972. The third category is "any other treaty entered into by any of the Communities, with or without any of the member States, or entered into, as a treaty ancillary to any of the Treaties, by the United Kingdom".

    Section 1(3) of the Act then provides as follows:

    "If Her Majesty by Order in Council declares that a treaty specified in the Order is to be regarded as one of the Community Treaties as herein defined, the Order shall be conclusive that it is to be so regarded; but a treaty entered into by the United Kingdom after the 22nd January 1972, other than a pre-accession treaty to which the United Kingdom accedes on terms settled on or before that date, shall not be so regarded unless it is so specified, nor be so specified unless a draft of the Order in Council has been approved by resolution of each House of Parliament."

    The word "treaty" as distinct from "the Treaties" is defined for the purposes of subsections (2) and (3) as including "any international agreement, and any protocol or annex to a treaty or international agreement".

    Section 2(3) provides the Treasury with authority to charge on and issue out of the Consolidated Fund or, as the case may be, the National Loans Fund the amounts required to meet any Community obligation to make payments to any of the Community or member States. In this context the expression "Community obligation" means any obligation created or arising under the Treaties.

    It follows that if Her Majesty by Order in Counci,. the draft of which had previously been laid before and approved by resolution of each House of Parliament, were to declare that an international agreement is to be regarded as one of - the Community Treaties, the Treasury would without further authority be entitled to make any payments called for by that agreement.

    The Treasury took the first step down this procedural path when on or about the 19th November, 1984 a draft Order in Council was laid before both Houses of Parliament. This draft specified the "Undertaking made by the Representatives of the Governments of the member States meeting within the Council on the 2nd and 3rd October, 1984 to make payments to the Community in 1984 to finance supplementary and amending budget No. 1 (Cmnd. 9395)" as being a treaty to be regarded as a Community Treaty as defined in section 1(2) of the 1972 Act.

    Before considering Mr. Smedley's objections to this course and to the obvious intention to advise Her Majesty to make an Order in Council in the same terms if the draft is approved by both Houses of Parliament, I think that I should say a word about the respective roles of Parliament and the courts. Although the United Kingdom has no written constitution, it is a constitutional convention of the highest importance that the legislature and the judicature are separate and independent of one another, subject to certain ultimate rights of Parliament over the judicature which are immaterial for present purposes. It, therefore, behoves the courts to be ever sensitive to the paramount need to refrain from trespassing upon the province of Parliament or, so far as this can be avoided, even appearing to do so. Although it is not a matter for me, I would hope and expect that Parliament would be similarly sensitive to the need to refrain from trespassing upon the province of the courts.

    Against that background, it would clearly be a breach of the constitutional conventions for this court, or any court, to express a view, let alone take any action, concerning the decision to lay this draft Order in Council before Parliament or concerning the wisdom or otherwise of Parliament approving that draft. Equally, as I made clear during the course of the argument, so far as I can see there can be no possible constitutional objection to Parliament debating this draft merely because this court is seized of Mr. Smedley's complaint. The exercise upon which Parliament would be engaged and that upon which we are engaged are essentially different. That much is, I think, common ground.

    However Mr. Laws, appearing for the Treasury, took the matter a little further when he submitted that, at the present stage when no Order in Council has been or could yet be made, it is premature for the court to consider Mr. Smedley's application. There is obvious force in this submission, but it requires some further examination. It is the function of Parliament to legislate and legislation is necessarily in written form. It is the function of the courts to construe and interpret that legislation. Putting it in popular language, it is for Parliament to make the laws and for the courts to tell the nation, including members of both Houses of Parliament, what those laws mean. Furthermore, whilst Parliament is entirely independent of the courts in its freedom to enact whatever legislation it sees fit, legislation by Order in Council, statutory instrument or other subordinate means is in a quite different category, not being Parliamentary legislation. This subordinate legislation is subject to some degree of judicial control in the sense that it is within the province and authority of the courts to hold that particular examples are not authorised by statute, or as the case may be by the common law and so are without legal force or effect.

    At the present moment, there is no Order in Council to which Mr. Smedley can object as being unauthorised. All that can be said is that it seems likely that if both Houses of Parliament approve the draft Order in Council, Her Majesty will be advised to make and will make an Order in the terms of the draft, whereupon the courts would without doubt be competent to consider whether or not the Order was properly made in the sense of being intra vires.

    In many, and possibly most, circumstances the proper course would undoubtedly be for the courts to invite the applicant to renew his application if and when an Order was made, but in some circumstances an expression of view on questions of law which would arise for decision if Parliament were to approve a draft may be of service not only to the parties, but also to each House of Parliament itself. This course was adopted in Rex v. Electricity Commissioners, ex parte London Electricity Joint Committee Co. (1920) Ltd. [1924] 1 K.B. 171. In that case an inquiry was in progress, the cost of which would have been wholly wasted if, thereafter, the Minister and Parliament had approved the scheme only to be told at that late stage that the scheme was ultra vires.

    Similar considerations apply in the present case. It is apparent from the terms of the undertaking that the provision of the money is considered a matter of urgency. If we defer consideration of Mr. Smedley's application until after both Houses of Parliament have considered the somewhat different question of whether each approves the draft Order in Council, we shall only have contributed an avoidable period of delay should the correct view be that an Order in Council in the terms of the draft would be valid and should only have contributed to what might be thought to be a waste of Parliamentary time if the correct view is that such an Order in Council would be invalid.

    One further point should be mentioned before turning to the substance of Mr. Smedley's application. This is a submission by Mr. Laws that Mr. Smedley has no sufficient interest within the meaning of Order 53 rule 3(7). Mr. Justice Woolf did not find it necessary to decide this point and neither do I, although I agree with the learned judge that I should be extremely surprised to find myself obliged to uphold that submission.

    The essence of Mr. Smedley's complaint is that the Undertaking to make the payment to the European Community is not "a treaty ancillary to any of the Treaties" within the meaning of that phrase in section 1(2) of the European Communities Act 1972 and that for an Order in Council to declare that such a treaty is to be regarded as one of the Community Treaties is ultra vires.

    The factual background is that over the period 1970-1975 the Community moved from a system whereby it was financed from contributions by member States to one whereby it was 'financed by what was known as its "own resources". The distinction is made clear in the Council Decision of the 21st April, 1970, Article 4 of which declares that "From 1st January 1975 the budget of the Communites shall, irrespective of other revenue, be financed entirely from the Communities' own resources". This Decision was incorporated into the Act of Accession by Article 127. However this year a supplementary and amending budget has been produced and the member governments have thought it right that the expenditure contemplated by this budget, or by the original budget as amended, shall be met in part not out of the Community's own resources, but out of funds provided by the member States in the form of "reimbursable advances". This phrase is not defined, but is explained by paragraph 3 of the Undertaking which records that:

    "The Representatives of the Governments of the Member States take the view that the Council will adopt a regulation under Article 235 as the basis for the reimbursement of the above amounts to the Member States."

    The only other provisions of Community legislation which are or may be relevant are Article 199 of the Treaty of Rome which provides that the revenue and expenditure shown in the budget should be in balance and Article 1.5 of the Council Financial Regulation of the 21st December, 1977 which provides for supplementary or amending budgets in the event of unavoidable, exceptional or unforeseen circumstances, a situation which apparently arose in 1984.

    Mr. John McDonnel, Q.C., appearing for Mr. Smedley, submits that the international Undertaking contravenes the requirement of Article 127 of the Act of Accession and the Council Decision there referred to and, accordingly, is a departure from the Community Treaties and so is incapable of being regarded as "ancillary" to any of those Treaties. That being so, any Order declaring that it is to be so regarded is ultra vires.

    In my judgment there is a simple answer to this submission. The concept of one treaty being "ancillary" to another is not one of precision. There may be more than one view on whether a particular international agreement is or is not "ancillary". It is no doubt for this reason, amongst others, that Parliament has provided in section 1(3) of the European Communities Act 1972 for a system whereby an Order in Council shall be conclusive of what treaties are to be regarded as Community treaties and that no treaty entered into by the United Kingdom after the 22nd January, 1972 shall be so regarded, unless it is so characterised by an Order in Council. Furthermore, quite apart from whether a particular instrument would otherwise be regarded as "ancillary" to the Community Treaties, Parliament has retained the right to prevent it being so regarded by refusing to approve the draft Order in Council designed to achieve this result.

    In that situation, the sole question for the court is whether the Order in Council, if made, would or would not be intra vires the pwoer conferred by Parliament upon those who would make it. This power does not derive from the affirmative resolution of the Houses of Parliament which, as I have explained, is a power of veto. It derives from a pre-existing power to be inferred from section 1 of the 1972 Act. In accordance with familiar principles of law, that power must be assumed to be limited to making an Order in Council in relation to an agreement which could properly be regarded as ancillary to the Community Treaties.

    And so I ask myself whether the Undertaking could be so regarded. I do not ask myself whether I would so regard it. The only real challenge, as I have explained, is based upon the submission that the Undertaking conflicts with some of the provisions of the Community Treaties. For my part I think that it may be open to doubt whether such a conflict would necessarily and in all circumstances disqualify an instrument from being regarded as ancillary to the Community Treaties. However, I do not consider that there is any such inconsistency between the Undertaking and the Treaties. As was pointed out by Lord Denning, M.R. in Bulmer (H.P.) Ltd. v. J. Bollinger S.A. [1974] 1 Ch. 410, Community instruments are not expressed against the background of English canons of construction and should not be so construed. As I read the Community Treaties, they are designed to express principles. The relevant principle, so expressed, is that the Community budget should so far as possible, and thus usually, be entirely financed out of the Community's own resources, but this is not to say that it must in all circumstances be so financed. It is clear that in the view of the member States, unusual circumstances have arisen in 1984 which have given rise to the need for a supplementary and amending budget. A temporary departure from the guiding principle set out in the Community Treaties does not seem to me to be in any way inconsistent with the Undertaking being properly regarded as ancillary to the Community Treaties.

    That objection apart, nothing could be more ancillary to the Community Treaties than the provision of funds to enable the Community to fulfil its essential functions. Accordingly I am quite unable to hold that an Order in Council in the terms of the draft would be ultra vires the order-making power. On the contrary, I think that it would quite plainly be intra vires. I would dismiss the appeal.

    LORD JUSTICE SLADE: The facts of this case have been stated in the judgment of the Master of the Rolls and I need not recapitulate them.

    A preliminary question that arises on this appeal is whether or not Mr. Smedley has "sufficient interest" within the meaning of R.S.C. Order 53 rule 3(7) to entitle him to apply for judicial review. Though Mr. Laws, on behalf of the Treasury, has not pressed this particular point very hard, he has submitted that Mr. Smedley has no such interest. If this submission is correct, the appeal must fail in limine.

    The speeches of their Lordships in Inland Revenue Commissioners v. National Federation of Self-Employed and Small Businesses Ltd. [1982] AC 617 well illustrate that there has been what Lord Roskill (at page 656G) described as a "change in legal policy", which has in recent years greatly relaxed the rules as to locus standi. Lord Diplock at page 640C) referred to a "virtual abandonment" of the former restrictive rules as to the locus standi of persons seeking prerogative orders against authorities exercising governmental powers. If the court had taken the view that Mr. Smedley's application were of a frivolous nature, the wide discretion given it by R.S.C. Order 53 would have enabled it to dispose of it appropriately. There has, however, been no suggestion that it is of this nature. It raises a serious question as to the powers of Her Majesty in Council to make an Order in Council in the form of the draft now before Parliament. The making of any such Order would be likely to be followed automatically by the expenditure by the Government of substantial sums from the Consolidated Fund in reliance on section 2 of the European Communities Act 1972. I do not feel much doubt that Mr. Smedley, if only in his capacity as a taxpayer, has sufficient locus standi to raise this question by way of an application for -judicial review; on the present state of the authorities, I cannot think that any such right of challenge belongs to the Attorney General alone.

    The next question that arises is whether or not it is right that the court should pronounce on the question put to it by Mr. Smedley at the present stage at a time when a draft Order in Council is before the Houses of Parliament and has not yet been considered by them. This is the issue which has caused me the greatest difficulty on this appeal. It is common ground that if and when the Order in Council had been laid before and approved by the two Houses, no questions of Parliamentary sovereignty or privilege would prevent the court from declaring, if it thought this right, that an Order in Council in these terms was invalid as having been made ultra vires the power conferred on Her Majesty in Council by section 1 of the European Communities Act 1972: (see, for example, Hoffman-La Roche (F.) & Co. A.G. v. Secretary of State for Trade and Industry [1975] A.C. 295 at page 354G per Lord Wilberforce).

    Mr. Laws, however, has submitted in effect that while there would be nothing to prevent the court (as did the learned judge) from expressing an opinion adverse to Mr. Smedley's submissions of law in the course of dismissing his application, it would be wrong for it at this stage to grant him any relief by way of declaration or otherwise, if it were to consider these submissions well founded. To grant any such relief as matters stand, Mr. Laws suggested, would constitute an unjustifiable interference with the procedures of Parliament; on no footing, he suggested, should relief be granted to the applicant at the present time.

    However, if this court were of the opinion that the present Parliamentary position prevented it from expressing any opinion as to the legal position in support of Mr. Smedley's submissions, the same considerations would in my judgment inevitably prevent us from expressing any opinion to the contrary effect. If we were to take this view as to the effect of the Parliamentary position, the proper course would be for us (and would have been for the learned judge) simply to dismiss the application on the grounds that it was premature - even though this would not have prevented Mr. Smedley from making any new application, if and when the Order in Council had been approved by both Houses of Parliament.

    I therefore think it inevitable that this court should carefully address its mind to the question whether or not a decision on the legal issues now before it, given at this present moment, would constitute an interference with the functions of Parliament. If it would, this court should simply dismiss the appeal on the grounds that this application was premature and say nothing further on the interesting and important legal issues involved.

    The answer to this question must, I think, depend on an analysis of the respective functions of Parliament, Her Majesty in Council and the courts in the context of section 1 of the European Communities Act 1972 ("the 1972 Act") and the proposed Order in Council. The operative part of the draft Order in Council simply provides:

    "The treaty specified in the Schedule to this Order is to be regarded as a Community Treaty as defined in section 1(2) of the [1972 Act]."

    The Schedule refers to the "Undertaking made by the Representatives of the Governments of the Member States meeting within the Council on 2nd and 3rd October 1984 to make payments to the Community in 1984 to finance supplementary and amending budget No. 1."

    The reasons why an Order in Council is considered necessary are these. In view of the wording of section 1(2) of the 1972 Act the Undertaking can gualify as a "Community Treaty" within that subsection only if it amounts to "any other treaty ... entered into, as a treaty ancillary to any of the Treaties, by the United Kingdom."

    Section 1(3) of the 1972 Act provides:

    "If Her Majesty by Order in Council declares that a treaty specified in the Order is to be regarded as one of the Community Treaties as herein defined, the Order shall be conclusive that it is to be so regarded; but a treaty entered into by the United Kingdom after the 22nd January 1972, other than a pre-accession treaty to which the United Kingdom accedes on terms settled on or before that date, shall not be so regarded unless it is so specified, nor be so specified unless a draft of the Order in Council has been approved by resolution of each House of Parliament." It follows that by virtue of section 1 the Undertaking, not being a pre-accession treaty within this exception,
    (a) is incapable of being regarded as one of "the Community Treaties" unless it is specified in an Order in Council;
    (b) is incapable of being specified in an Order in Council unless a draft of the Order in Council has first been approved by resolution of each House of Parliament.

    The function conferred on the two Houses of Parliament by section 1(3) in relation to the Undertaking will be, in effect, simply that of deciding whether or not to approve the draft Order in Council. If Parliament were to give a negative decision by withholding its approval, that would be that; the Order in Council could not be made. If, however, Parliament were to give its approval then, at least according to the wording of section 1 of the 1972 Act, two consequences would follow:

    (1) Her Majesty by Order in Council would have the power to specify the Undertaking as one which was to be regarded as a Community Treaty as defined in section 1(2);
    (2) any such Order in Council would be "conclusive" that the Undertaking was to be so regarded.

    I have somewhat laboured these distinctions between the respective functions of Parliament and Her Majesty in Council in the present case, for the purpose of demonstrating the somewhat limited role which is allotted to Parliament by section 1(3) of the 1972 Act. This role is analogous to a power of veto. If it withholds its approval from the draft Order in Council, the Order cannot be made. If, however, the approval of Parliament is given, Her Majesty in Council is left with a discretion whether or not to make the Order. There is no possible question of the court seeking or being able to control the exercise of the Parliamentary power of veto. However, I can see no reason why the exercise of the last-mentioned discretion given to Her Majesty in Council should not be open to attack in the courts by the process of judicial review, subject to the stringent restrictions on any such attack imposed by what has come to be known as the Wednesbury principle. Equally, if the analysis of the position set out earlier in this judgment is correct, I can see no good reason why a decision by the courts given at the present stage and relating to the proposed exercise of the discretion of Her Majesty in Council should be said to usurp or interfere with what I conceive to be the function of Parliament in this present context,namely that of deciding whether or not to exercise what is in substance a power of veto over the proposed Order in Council. Indeed, if this court were to consider that the proposed Order would be beyond the legal powers of Her Majesty in Council, I would anticipate that, to echo the words of Lord Justice Younger in R. v. Electricity Commissioners Co. (1920) Ltd. [1924] 1 K.B. 171 at page 213 "the interference of the Court in such a case as this, and at this stage, so far from being even in the most diluted sense of the words a challenge to its supremacy, will be an assistance to Parliament."

    The latter decision seems to me good authority for the proposition that where some administrative order or regulation is required by statute to be approved by resolution of both Houses of Parliament, the court can in an appropriate case intervene by way of judicial review before the Houses have given their approval, even though I conceive that in at least most such cases the only appropriate form of relief (if any) could be by way of declaration. This is a jurisdiction which must of course be exercised with great circumspection and with close regard to the dangers of usurping or encroaching on any function which statute has specifically conferred on Parliament or on the functions of Parliament in general. In the present case, however, I am satisfied that a decision on Mr. Smedley's application will involve no such usurpation or encroachment. I should add that it is common ground that the mere existence of these present proceedings need place no fetter on the course of the impending debate in Parliament. For these reasons, I would reject Mr. Laws' submission that the application is premature and that no decision should be made in relation to it at the present stage.

    However, from what has already been said, two points are in my opinion clear. First, any attack by Mr. Smedley on the proposed Order in Council has to be based on the proposed exercise of the discretion of Her Majesty in Council. Secondly, if it is to succeed, it must be shown that it falls within the Wednesbury principle.

    Mr. John McDonnell, Q.C., in his argument on behalf of Mr. Smedley, has implicitly accepted this burden. He has submitted that as a matter of law the Undertaking is incapable f being properly regarded as a "treaty ancillary to any of the Treaties" within the meaning of those words as used in section 1(2) of the 1972 Act. It must follow, in his submission, that Her Majesty in Council would be acting subject to a misdirection in law and beyond the powers conferred by section 1(3) of the 1972 Act in making a declaration in the form embodied in the draft Order in Council.

    If the premise of this argument were correct, I think that the conclusion would inevitably follow; and indeed Mr. Laws has not contended to the contrary. He has not submitted in such circumstances that the "conclusive" provision at the beginning of section 1(3) would preclude the intervention of the court by way of judicial review. However, I am not able to accept the premise.

    In the present context, it seems to me particularly significant that the phrase "ancillary to", as used in section 1(2) of the 1972 Act is an imprecise expression of wide and somewhat uncertain import. It is clear that one of the legislative purposes of the opening sentence of section 1(3) was to eliminate any uncertainty that might otherwise exist in relation to the status of a particular "treaty", by the making of an appropriate Order in Council. The word "treaty" is itself given a wide meaning by section 1(4) which defines it, for the purposes of subsections (2) and (3), as including "any international agreement, and any Protocol or annex to a treaty or international agreement". I do not suggest that section 1(3) would empower Her Majesty in Council to purport to bring into the ambit of the 'Community Treaties" an international agreement which demonstrably had no connection whatever with "the Treaties" as defined in section 1(2). However, I do not think that the legislature can have contemplated that the courts would intervene in a case where Her Majesty by Order in Council, seen fit to make a declaration in regard to a particular treaty which was capable of being properly regarded as being "a treaty ancillary to any of the Treaties", whether or not the contrary view might be arguable on the particular facts. One of the very purposes of the wide discretion given to Her Majesty in Council, linked to the somewhat imprecise description "ancillary to", must have been to avoid any such dispute in borderline cases.

    In his very able argument in the present case, Mr. McDonnell, having taken us through the relevant provisions of the 1972 Act, "the Treaties" and the Undertaking, has failed to persuade me that as a matter of law the Undertaking is incapable of being properly regarded as a "treaty ancillary to any of the Treaties" in the relevant sense. At first sight, indeed as I think he frankly recognised, there are formidable obstacles in the way of any such submission, since the very purpose of the Undertaking is to provide money which the Community consider that they require to expend for the purpose of achieving the objectives of the Treaty of Rome and the other Treaties mentioned in section 1. There is therefore at least a very close connection between the Undertaking and the existing Treaties.

    Nevertheless, Mr. McDonnell forcefully supported his submission by reference to a number of points of which I think the following were the essential features. He submitted:

    (1) the purpose of the Undertaking was to enable the Institutions of the Community to budget for expenditure in 1984 in excess of the Communities' "own resources";
    (2) the Undertaking would result in the Communities exceeding the limit of expenditure imposed by the combined effect of the Community Treaties;
    (3) the Undertaking, being thus entered into in contravention of the Community Treaties, could not be regarded as "ancillary" to them.

    For the reasons given by the Master of the Rolls, I am not convinced that the Undertaking would necessarily conflict with the provisions of the Community Treaties, when read as a whole. But even if in some respects they did conflict, I cannot accept that this would necessarily prevent this international agreement from being properly described as "ancillary" to the Community Treaties. Mr. McDonnell, while not attempting an exhaustive definition of the word "ancillary", has submitted that the phrase "as ancillary" connotes "assistance of a subordinate or subservient kind". Even accepting this submission for present purposes, any agreement which is ancillary to an earlier agreement in this sense may well involve some variation of that agreement and thus, in one sense, a measure of conflict with it. However, the fact that such variation may be thought in some respects to involve a departure from the terms of the earlier agreement, even on a point of principle, does not in my view inevitably Prevent the subsequent agreement from being properly described as "ancillary" to the earlier agreement, according the ordinary meaning of words. This, I think, must be a estion of degree according to the particular facts of each case. It is just the sort of point which the legislature by the 1972 Act has seen fit to leave to Her Majesty in Council to decide, subject to the Parliamentary power of veto.

    For these reasons, and the other reasons given by the Master of the Rolls, I can see no good reason for concluding that the proposed Order if made by Her Majesty in Council would be ultra vires the power conferred by section 1(3) of the 1972 Act. I would accordingly dismiss this appeal.

    LORD JUSTICE LLOYD: I agree.

    (Order: Appeal dismissed with costs. Application for leave to appeal to the House of Lords refused).


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