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Cite as: [2001] EWHC Admin 1162

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South Wales Sea Fisheries Committee v National Assembly For Wales [2001] EWHC Admin 1162 (21st December, 2001)

Neutral Citation Number: [2001] EWHC Admin 1162
Case No: CO/2559/2001

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand,
London, WC2A 2LL
21 December 2001

B e f o r e :

THE HONOURABLE MR JUSTICE RICHARDS
____________________


South Wales Sea Fisheries Committee
Claimant
- and -

National Assembly for Wales
Defendant

____________________

(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)

____________________

Clive Lewis (instructed by Toller Beattie for the Claimant)
Milwyn Jarman QC (instructed by DEFRA for the Defendant)

____________________

HTML VERSION OF JUDGMENT
AS APPROVED BY THE COURT
____________________

Crown Copyright ©

    Mr Justice Richards:

  1. In these proceedings the South Wales Sea Fisheries Committee ("SWSFC") seeks judicial review of the South Wales Sea Fisheries (Variation) Order 2001 ("the 2001 Order"), made by the National Assembly for Wales ("the Assembly") on 29 March 2001.
  2. Sea fisheries committees were introduced in 1888 and are currently governed by the Sea Fisheries Regulation Act 1966. They have wide-ranging functions in relation to the regulation of inshore sea fisheries. Under the 1996 Act they may make byelaws for the regulation of such fisheries and related purposes and may appoint fishery officers for the purpose of enforcing the byelaws. They also have various other enforcement, management and conservation responsibilities pursuant to domestic statutes and EC directives and regulations.
  3. SWSFC was created in 1912. It is responsible for a sea "district" extending in broad terms from the Severn Estuary to northern Pembrokeshire. In recent years it has been a joint committee of Cardiff County Council, Carmarthenshire County Council, Pembrokeshire County Council, Swansea County Council, Bridgend County Borough Council, Neath Port Talbot County Borough Council, Rhondda Cynon Taff County Borough Council and The Vale of Glamorgan County Borough Council. Carmarthenshire, Pembrokeshire and Swansea have each appointed two members to the committee; the other councils have each appointed one member. Additional members are appointed by the Environment Agency and the Assembly.
  4. The 2001 Order does two things. First, it varies the constitution of SWSFC to provide for the withdrawal of Rhondda Cynon Taff from the committee. All concerned are agreed on the good sense of that course: Rhondda Cynon Taff has no coastline and there is no reason why it should be participating in, and contributing to the expenses of, the regulation of inshore sea fisheries. Secondly, the Order makes amended provision in relation to the councils' contributions to the expenses of the committee. That is the target of the present challenge. SWSFC contends that the amending provisions are unlawful and that the Order should in consequence be quashed.
  5. In order to understand the issues, it is necessary first to set out the legislative framework and the history of events leading up to the 2001 Order.
  6. The Sea Fisheries Regulation Act 1996

  7. The powers conferred by the Sea Fisheries Regulation Act 1996, as amended, on "the Minister" are now exercisable in relation to Wales by the Assembly and the relevant procedures for the exercise of such powers are those adopted pursuant to sections 64 et seq. of the Government of Wales Act 1998. Nevertheless I shall use the language of the statute itself, which still refers to "the Minister".
  8. The 1996 Act provides first for the establishment of sea fisheries districts and local fisheries committees. Section 1 states:
  9. “1(1) The Minister may, on the application of a county or metropolitan district council …, by order -
    (a) create a sea fisheries district …, and
    (b) define the limits of the district, and the area chargeable with any expenses under this Act, and
    (c) provide for the constitution of a local fisheries committee for the regulation of the sea fisheries carried on within the district.
    and the Minister may, by a subsequent order made on the like application, or made on the application of a local fisheries committee and after consultation with every county or metropolitan district council concerned, vary or revoke any order made under this section ….”
  10. Section 2 provides for the local fisheries committee to be a committee of a council or a joint committee of a number of councils, consisting of members appointed by the council or constituent councils (in such proportions as may be determined) and additional members appointed by the Environment Agency and the Minister.
  11. By section 3, inhabitants of a county or district may apply for an order if the council refuses to apply; and on such an application the Minister shall, unless the council in question satisfies him that such an order should not be made, proceed as if the application had been made by the council.
  12. The provisions relating to byelaws are contained in sections 5 to 9. Section 10 concerns the appointment and powers of fishery officers. Section 10(1) is of particular relevance:
  13. “Subject to any restrictions or conditions as to expenditure made by the council or councils by whom a local fisheries committee is appointed, the committee may appoint such fishery officers as they deem expedient for the purpose of enforcing the observance within their district of byelaws made by the committee ….”
  14. It was held in Reg. v. Mayor of Plymouth [1896] 1 QB 158 that the corresponding provision of the predecessor legislation was the only power that constituent councils had of controlling the expenditure of a fisheries committee, but that any restrictions and conditions as to expenditure in connection with the appointment of a fishery officers had to be imposed before the appointment of that officer. That decision was followed in Reg. v. North Riding of Yorkshire County Council [1899] 1 QB 201, where it was held that the constituent councils, not having exercised the power to impose restrictions and conditions in advance, could not decline responsibility for items of expenditure necessarily incurred by the committee. The court in the North Riding case went on to state that restrictions or conditions had to be imposed by unanimous agreement between all the councils concerned.
  15. The only other provision of the 1966 relating to expenses of committees is section 17, which provides in subsection (1) that such expenses, in so far as payable by a council, shall be general or special expenses of the council (according as the order constituting the committee provides) and in subsection (2) that any expenses which a committee is required by the Minister to incur in the collection of statistics shall be paid out of moneys provided by Parliament.
  16. The 1912 Order and amending orders

  17. The SWSFC was established by an Order made by the Board of Agriculture and Fisheries on 27 June 1912, which revoked earlier orders creating separate districts in South Wales. The only provision of the 1912 Order which it is necessary to recite is Article 21 (subsequently renumbered Article 17), which provided as follows for expenses:
  18. “The expenses of the Committee shall be chargeable as follows:-
    .…
    (3) The amount of the expenses chargeable in any financial year under this Order on any one of the said counties and county boroughs shall be determined by apportioning the expenses between the several counties and county boroughs in the following proportions …
    Provided that the Committee shall not in any financial year incur expenses which would involve a charge on any county or county borough greater than the amount which can in that year be raised by a rate of one-eighth of a penny in the pound on the rateable value of the property within such county or county borough.”
  19. Thus the formula adopted was one of apportionment of expenses between the constituent councils, subject to a cap or ceiling on total expenses. The amount of the cap was subsequently amended, but the details are immaterial.
  20. The Local Government Reorganisation (Wales) (Committees for Sea Fisheries Districts) (Amendment) Order 1996 amended the 1912 Order so as (i) to provide that expenses be chargeable jointly to the constituent councils in equal proportions and (ii) to remove the cap.
  21. The 2001 Order

  22. The 1996 Order had been made under an emergency procedure and represented an unsatisfactory interim arrangement, both as regards the inclusion of Rhondda Cynon Taff and because it was recognised that equal shares did not constitute an equitable basis of apportionment of expenses. There followed discussions within SWSFC and its constituent councils as to the way forward. In 1997 Rhondda Cynon Taff applied to withdraw from the committee. In October 1998 SWSFC applied for a variation order which would give effect to that withdrawal and apportion expenses on a percentage basis among the remaining members, with an agreed financial cap on contributions. In 1999 Pembrokeshire put forward a proposal that removed reference to payment of a percentage of expenses and identified the financial contributions of constituent councils as annual cash amounts. SWSFC objected, taking the view that it was unlawful to remove reference to percentages and to provide for contributions in cash terms. In early 2000, the Assembly went out to consultation on a draft order based on Pembrokeshire's proposal but including proportional contributions in respect of unexpected or exceptional expenses - a draft similar in principle to the order finally adopted.
  23. In the subsequent debate the councils, with a view to securing greater control over expenditure, generally favoured a cash based formula with some provision for unforeseen expenses, whereas SWSFC continued to press for an order providing for payment of its expenses on a percentage basis. On 1 February 2001 Pembrokeshire put forward a further variation referring both to percentages and to actual financial contributions totalling some £354,000, subject to unforeseen expenses. In a letter of 2 February Neath Port Talbot expressed concern that the proposed financial limit was below SWSFC's currently approved budget of £396,000 and that the service and financial implications of such a cut had not been understood. It indicated support for inclusion of the percentage figures in a variation order, with a "side agreement" based on the figure of £396,000 and index linked from there.
  24. At the quarterly meeting of SWSFC on 7 February 2001 it was agreed that SWSFC should continue to press for a percentage based formula. It was also agreed to adhere to a spending requirement of £396,000 and to set a levy accordingly; and on 8 February SWSFC issued levies in that total sum to the constituent councils (see below).
  25. In response to an inquiry from the Assembly, in a letter of 23 February Neath Port Talbot stated that it remained concerned about the cash limit in the proposed order, but felt that there was no option but to accept the order as drafted. The other councils had previously expressed agreement to it. SWSFC had maintained its objections.
  26. Thereafter the Assembly proceeded to prepare and debate a final Order giving effect to the position agreed between the councils. At this stage matters moved fast, because the councils were anxious to have the revised arrangements in place before the start of the new financial year. The draft Order was considered by the Assembly's Business Committee and Legislation Committee towards the end of March, but there was no time for it to be referred to the relevant subject committee, the Agriculture and Rural Development Committee. On 29 March it was considered by the Assembly in plenary session and was approved by unanimous vote.
  27. Thus the 2001 Order was made on 29 March 2001; it came into force on 31 March. Its material provision are contained in Article 4, which substitutes the following for Article 17 of the 1912 Order:
  28. “(1) Subject to paragraph (2) below, the expenses of the committee, other than those which may be required to be incurred under section 17(2) of the Act, shall be chargeable jointly to the constituent councils in the respective amounts for each financial year set out in Column 3 of the Schedule to this Order opposite the reference to each constituent council and shall be expenses for general county or county borough purposes.
    (2) In the event of the committee being required to incur any unforeseen expenses which cannot be met by the amounts charged to the constituent councils under paragraph (1) above, then those unforeseen expenses shall, in addition, be referred to the constituent councils for consideration and defrayed jointly by them in the respective percentages set out in Column 4 of the Schedule to this Order opposite the reference to each constituent council and shall be expenses for general county or county borough purposes.
    (3) The Committee may decide that the figures set out in Column 3 of the Schedule shall be increased for budgetary years from 2002/03 onwards by a figure not exceeding the annual rate of inflation, which rate shall in the event of disagreement by any constituent council be determined by the National Assembly for Wales.”
  29. The substituted Schedule is as follows:
  30. Column 1
    Constituent Councils
    Column 2
    Number of members
    Column 3
    Contribution towards expenses etc. per financial year
    £
    Column 4
    Percentage of unexpected expenses payable per financial year
    Cardiff County Council 1 10,825 3%
    Carmarthenshire County
    Council
    2 85,000 24%
    Pembrokeshire County
    Council
    2 85,000 24%
    Swansea County Council 2 85,000 24%
    Bridgend County
    Borough Council
    1 28,333 8%
    Neath Port Talbot
    County Boro' Council
    2 38,958 11%
    The Vale of Glamorgan
    County Boro' Council
    1 21,250 6%

    Levies and the financing of payments

  31. SWSFC is a "levying body" as defined in section 74 of the Local Government Finance Act 1988 and is empowered to issue levies to its constituent councils under the Levying Bodies (General) Regulations 1992. By regulation 4 of the 1992 Regulations, a levy must be issued before 15 February in the financial year preceding that in respect of which a levy is issued. In this case, as already indicated, SWSFC fixed a budget of £396,000 for the 2001/02 financial year and issued a levy accordingly on 8 February 2001, requiring an equal payment of £49,500 by each of the eight constituent councils.
  32. By virtue of the Local Government Revenue Settlement 2001/02, the grant payable by central government to each of the councils includes an amount (not ring-fenced) of £43,947 in respect of their contributions to SWSFC. In order to make a payment of £49,500 to SWSFC, each council would therefore have to fund the balance of £5,553 through council tax.
  33. Regulation 8 of the 1992 Regulations contains powers to issue substituted levies. It is provided by regulation 8(3), however, that:
  34. “No levy may be issued in substitution if its amount would be greater than the amount of the levy for which it is substituted, except as provided by paragraph (4) below [which applies only where the old levy has been quashed on certain grounds].”

    One of the points made by SWSFC in these proceedings is that it was precluded by regulation 8(3) from raising a substituted levy so as to recover from Carmarthenshire, Pembrokeshire and Swansea the sums in excess of £49,500 specified in the 2001 Order.

  35. A few days before the hearing, however, the Assembly sent SWSFC a copy of the South Wales Sea Fisheries (Levies) Regulations 2001 ("the 2001 Regulations"), made on 29 November 2001 and coming into force on 30 November. Regulation 4(1) of the 2001 Regulations amends SWSFC's powers to issue substituted levies in order to enable compliance with the 2001 Order:
  36. “Notwithstanding regulation 8 of the Principal Regulations, the Committee is authorised by these Regulations to issue:
    (a) substitute levies (the new levies) to the Constituent Councils to replace those levies issued by it on 8th February 2001 (the old levies); and
    (b) a substitute levy for nil pounds to Rhondda Cynon Taff to replace the levy issued on 8th February 2001;
    no later than 14th February 2002 to enable the Committee, the Constituent Councils and Rhondda Cynon Taff to comply with the Order.”

    First issue

  37. The first ground of challenge advanced by SWSFC proceeds from the premise, which is common ground, that subject to any lawful restriction it is for the committee to decide what general policy and detailed dispositions are appropriate and how much money it should plan to spend. Lawful restrictions on expenditure can in principle be imposed (i) by way of unanimous agreement between the constituent councils to impose restrictions or conditions in advance pursuant to section 10 of the 1966 Act and (ii) by way of a "constitutional cap" on expenses, of the type contained in the original Article 21 (subsequently renumbered Article 17) of the 1912 Order. (As to (ii), I should make clear that, although SWSFC does not dispute in these proceedings that a cap of the type contained in the 1912 Order could in principle be imposed, it reserves its position in relation to the lawfulness of any actual cap, which might be open to challenge e.g. on the ground that it was set at a level that prevented the lawful discharge of the committee's functions or on the ground that relevant considerations had not been taken into account.)
  38. The case for SWSFC, as advanced by Mr Lewis, is that the 2001 Order is unlawful because, instead of providing for expenses to be chargeable to the councils in specified proportions (as under previous Orders), it provides for them to be chargeable in the specific amounts set out in column 3, neither more nor less. Thus on its true construction it fixes a precise amount to be spent and recovered from the councils. That is outside the powers of the Assembly and imposes an unlawful restriction on the committee's discretionary powers. It removes from the committee any judgment as to the amount of expenditure to be made and recovered from the constituent councils: the committee is no longer free to determine its estimate of expenditure and to issue a levy accordingly. The provisions relating to recovery of unforeseen expenses, which are in any event the subject of separate criticism, do not remove the problem.
  39. The case for the Assembly, as put by Mr Jarman QC, is that on its true construction the 2001 Order places a lawful cap on expenditure chargeable to the constituent councils but does not interfere with the discretion of SWSFC as to the amount to be spent and recovered below that cap. Mr Jarman submits that it is very unlikely in practice that the committee will spend less than the total amount set out in column 3 of the Schedule to the Order, but that if it were to occur, then the expenses would be apportioned between the councils by reference to the proportions that the column 3 figures bear to one another. For example, the column 3 figure for Cardiff (£10,825) is 3.0547513% of the column 3 total (£354,366). Using those figures it is possible to calculate exactly the proportion that each council should bear if expenditure falls below the column 3 total. Mr Jarman does not seek to contend that if, on its true construction, the 2001 Order fixes a precise amount to be spent and recovered from the councils rather than placing a cap on chargeable expenditure, it is nevertheless lawful.
  40. The issue therefore boils down to a short point of construction: does the 2001 Order fix precise amounts by way of contributions or place a cap on chargeable expenditure? In my judgment it does the former. I reach that conclusion for a number of reasons:
  41. i) The substituted Article 17(1) states that expenses "shall be chargeable in the respective amounts … set out in Column 3" (emphasis added). It does not state that expenses shall be chargeable "in the proportions" set out or "up to the amounts" set out. The language is plainly that of fixing specified amounts rather than placing a cap on chargeable expenditure. Had it been intended to place a cap, different language would have been used.

    ii) If it had been intended to provide for proportionate contributions in the event of expenses being less than the total of the column 3 figures, specific provision would have been made to that effect. I reject the submission that such provision is to be implied. The illustrative calculation put forward by Mr Jarman highlights the artificiality of the exercise. I find it very difficult to impute to the Assembly an intention to require Cardiff to pay 3.0547513% of the total in the case of under-expenditure, when it has provided expressly for Cardiff to pay the rounded figure of 3% in the case of unforeseen over-expenditure.

    iii) That leads into a further point, that when the Order wishes to refer to proportions rather than to amounts, it does so. In relation to unforeseen expenses, Article 17(2) provides that they shall be defrayed jointly "in the respective percentages set out in Column 4", those percentages being sensibly rounded figures.

    iv) The legislative history is also relevant. All the earlier Orders had provided for the expenses to be chargeable in specified "proportions", leaving the amounts unfixed (subject to the cap in place from 1912 to 1996). The change effected by the 2001 Order, to provide for expenses to be chargeable in specified "amounts", is explicable only on the basis that the Assembly was fixing precise amounts rather than laying down proportions and a cap.

  42. I have reached my conclusion independently of what was said by the Minister for Rural Affairs, Mr Carwyn Jones AM, in the course of the Assembly debate on the Order. In my view that material is inadmissible as an aid to construction of the Order, save possibly in the event of ambiguity or other circumstances of a kind that would justify recourse to ministerial statements in the Westminster Parliament in accordance with the principles in Pepper v. Hart [1993] AC 593. My conclusion should, however, come as no surprise to the Assembly, given the Minister's statement:
  43. “This Order … has been proposed by Pembrokeshire County Council and has the backing of all the other member authorities of the Committee ….
    The Pembrokeshire funding proposal is for an Order that sets the actual monetary contribution for each participating authority for 2001-02 …. This is a change from earlier Orders when a percentage-based formula was used. The local authorities' view is that such an Order gives them greater control over budget issues. The Committee opposes the draft Order because a monetary figure is unreasonable and ultra vires ….”

    Moreover in that passage the Minister was doing no more than summarising the views expressed by the councils and SWSFC in the run-up to the debate.

  44. My conclusion on the issue of construction leads to the finding that the 2001 Order is unlawful for the reasons advanced by Mr Lewis, which I did not understand to be in dispute once this point was reached and which in any event I accept. SWSFC therefore succeeds on the first issue.
  45. I consider the question of discretion in relation to the grant of relief later in this judgment. It is sufficient to record at this stage that I would quash the 2001 Order on the basis of the SWSFC's success on the first issue even taken alone. I think it helpful, however, to go on to consider other issues, where my conclusions provide additional reasons why the Order should be quashed.
  46. Second issue

  47. The second ground of challenge is that in making the 2001 Order the Assembly must have misdirected itself in law, in that it proceeded on the erroneous basis that SWSFC could give effect to the 2001 Order whereas the Order was in reality unworkable. Alternatively the Assembly failed to take into account a material consideration, namely the inability of SWSFC to give effect to the Order. The basis of the submission is that the Order increased the amounts chargeable to Carmarthenshire, Pembrokeshire and Swansea from £49,500 to £85,000; but SWSFC had already issued a levy for £49,500 and it had no power under the 1992 Regulations, in particular regulation 8, to issue a substituted levy for an increased amount. In practice the SWSFC has not been paid the increased amounts and has had to draw on reserves in order to discharge its functions.
  48. I think it clear that SWSFC did not have the power to issue a substituted levy for an increased amount and that the 2001 Order, taken by itself, therefore created an unworkable situation. I did not understand Mr Jarman to contend to the contrary.
  49. What Mr Jarman submits, however, is that the 2001 Regulations solve the problem by conferring on SWSFC the requisite power to levy an increased levy; that the Assembly, in making the 2001 Order, must be taken to have been aware of its power to adopt such amending regulations; and that the court should therefore not infer that the Assembly proceeded on the basis of a misdirection of law or failed to take into account a material consideration. He also submits that the councils had agreed to make payments in the amounts set out in the Order and that the reason for non-payment is the existence of these proceedings rather than any inability on the part of the SWSFC to require payment. There are a number of reasons why I cannot accept those submissions:
  50. i) The absence of any enforceable means of levying the additional sums was a substantial deficiency. Reliance could not sensibly be placed on the constituent councils volunteering payments, even though they had agreed to the proposal (and whatever the actual reasons for non-payment to date).

    ii) There is nothing to show that, in making the 2001 Order, the Assembly was aware that SWSFC would lack the power to levy the additional amounts in the absence of further provision or that it intended to introduce such provision by way of amending regulations. Nothing to that effect was said in the course of the procedures relating to the 2001 Order or in correspondence or in the Assembly's grounds for contesting the claim or in its evidence in these proceedings. The first intimation of an amendment came in the form of receipt of a copy of the 2001 Regulations themselves a few days before the hearing. There is simply no basis for an inference that the Assembly had the amendment in mind from the outset.

    iii) The 2001 Regulations went through what is called the "executive procedure" under Standing Order 22.27, which reflects the provisions of section 67 of the Government of Wales Act 1998. The normal requirements of notification or consultation, submission of a draft Order to the Business Committee, consideration of a report from the Legislation Committee, the laying of a draft Order before the Assembly and its approval by a resolution of the Assembly were all disapplied on the basis that they were "not reasonably practicable". There is a strong inference, as Mr Lewis submits, that the Assembly had not previously foreseen the need for amending regulations but, having at a late stage appreciated the deficiency, rushed them through in order to have them in place in time for the hearing.

  51. A further point made by Mr Lewis in relation to the 2001 Regulations is that they do not solve the problem in any event, since they relate only to substituted levies in respect of the amounts set out in column 3 of the Schedule to the 2001 Order and do not purport to deal with any unforeseen expenses that may arise during this financial year or in future years. Mr Jarman's response is that payment of unforeseen expenses does not require a levy, since the 2001 Order itself requires such expenses to be "defrayed" jointly by the councils in the percentages set out in column 4. The response, however, runs into the insuperable difficulty identified by Mr Lewis in his reply. The 1966 Act confers no power on the Assembly to require councils to pay money to a sea fisheries committee. Such a power is not an incident of the power under section 1 to provide for the constitution of a sea fisheries committee. The 1966 Act does empower the Assembly to specify the councils chargeable with relevant expenses; but it is then the combined operation of the levying provisions of the Local Government Finance Act 1988 and of the 1992 Regulations that creates an obligation on the part of those councils to pay the expenses so chargeable. Accordingly the argument advanced in support of the 2001 Regulations not only fails to provide the requisite support but has the incidental consequence of exposing a further legal flaw in the 2001 Order. If the Order was made on the basis that the Assembly could impose a direct obligation on the councils to defray unforeseen expenses, it was made on the basis of an additional misdirection in law.
  52. The challenge to the 2001 Order therefore succeeds on the second issue and on the additional point thrown up by the second issue.
  53. Third issue

  54. The third ground of challenge is that the Assembly adopted the 2001 Order on the basis of misdirections of law as to the membership and funding of sea fisheries committees. The ground is based primarily on statements by the Minister, Mr Carwyn Jones AM, in the course of the Assembly debate, that "[m]embership of a sea fisheries committee is voluntary" and that "it is a matter for local authorities to decide on the membership, funding and activities they wish [the committees] to undertake".
  55. It is submitted that it is simply not correct to describe membership as voluntary. There is a wider public interest involved, it is for the Assembly to determine whether a council should or should not be a member of a committee, and the Assembly cannot lawfully abnegate that responsibility. As to the statement that it is for local authorities to decide on funding, that misses the legal point that any agreement by them has to be unanimous and reached in advance of the relevant expenditure (see Reg. v. North Riding of Yorkshire County Council, cited above); and it misses the factual point that Neath Port Talbot had not agreed to the proposal. Overall it is submitted that the clear implication of what was said was that if the authorities were agreed then the Assembly's role was to put the agreement into effect, and the Assembly in effect delegated the exercise of its powers to the constituent councils.
  56. I accept that some of the language used by Mr Jones does not reflect the precise legal position and could have been better expressed, but I would not attach great significance to that. I note that the description of membership as "voluntary" (which was used by the Minister in the context of the withdrawal of Rhondda Cynon Taff, upon which everyone was agreed) seems to have been drawn from a briefing note provided by SWSFC itself to the Assembly. It does not lie happily in SWSFC's mouth now to turn round and complain about such language. As to the question of agreement between the councils, a simplified picture may have been presented but in my view it was unnecessary to refer to the limitations upon the power of the constituent councils to restrict the committee's expenditure; and in relation to the factual position, although Neath Port Talbot had expressed reservations about the financial limits, it had accepted the Order as drafted. Looking at the debate and related material as a whole, I do not accept that the Assembly delegated its powers to the constituent councils or proceeded on the mistaken assumption that its function was simply to put into effect an agreement between the councils. The fact that there was agreement was a powerful factor in favour of the proposal but was not treated as legally determinative.
  57. I therefore reject the SWSFC's case on the third issue.
  58. Fourth issue

  59. The next ground of challenge is that the 2001 Order is void for uncertainty. It is common ground that it is liable to be quashed if it can be given no meaning or no sensible or ascertainable meaning, and not merely because it is ambiguous or leads to absurd results (the test in Fawcett Properties Ltd. v. Buckingham County Council [1961] AC 636, as applied in Percy v. Hall [1997] QB 924).
  60. The problem, submits Mr Lewis, lies in the requirement that unforeseen expenses be "referred for consideration" by the constituent councils and defrayed by them. If it means that the councils may decide whether to defray the expenses or not, then it is unlawful, since (i) any decision to restrict expenditure must be made before the expenses are incurred (Reg. v. North Riding of Yorkshire County Council, above), (ii) any such decision must be unanimous (ibid.), whereas the contention advanced on behalf of the Assembly is that a majority decision is here contemplated, and (iii) for the councils to refuse to defray expenses that the committee was required to incur would frustrate the proper discharge of the committee's statutory function and, if the function related to an obligation under EC law, would be liable to put the United Kingdom in breach. If, on the other hand, the provision is not meant to work in that way, it is wholly unclear what is intended. Additional elements of uncertainty are that, if a majority decision is contemplated, it is not clear whether that is a simple numerical majority or a weighted majority; and it is not clear whether "unforeseen expenses" are, for example, those not foreseen by the committee at the time of preparation of its budget or those not foreseen by the Assembly at the time when the Order was made.
  61. Mr Jarman submits that there is an obvious purpose in providing for unforeseen expenses to be referred for consideration, since required expenditure does not always entail funding by the constituent councils (e.g. there may be funding from EC grants) and it would be wrong simply to provide for the councils to defray expenses without consideration of them. I am inclined to think that that is a good point and that Mr Lewis's riposte that, where a grant is provided, relevant "expenses" are not incurred, blurs the basic distinction between expenditure and the funding of expenditure. No decision on the point is needed, however, since in my judgment the Order would not be void for uncertainty even if no useful purpose were served by providing for unforeseen expenses to be referred for consideration by the councils. That they must be referred for consideration is clear: the meaning of the Order is certain. What, if any, room for manoeuvre the councils have in respect of expenses so referred to them is a separate question.
  62. As to that separate question, I have already left open whether there is scope for the constituent councils to consider whether expenses incurred fall to be funded by them rather than by, for example, EC grants. Subject to that, I accept Mr Lewis's submission that the councils could not lawfully refuse to defray expenses that the committee was required to incur. But even if the councils had no choice in the matter whatsoever and could not lawfully decide to do anything but defray the expenses, that would not render the Order uncertain. The Order would still be capable of lawful implementation and could not be said to lack any sensible meaning.
  63. In my view the expression "unforeseen expenses" is plainly intended to refer to those not foreseen by the committee at the time of preparing its budget, rather than those unforeseen by the Assembly at the time of making the Order. In any event, one way or the other a sensible meaning can be attributed to the expression as a matter of construction of the Order and again there is no problem of uncertainty.
  64. Overall I am satisfied that the Order, if otherwise lawful, would be workable and would not fail on grounds of uncertainty.
  65. Other issues

  66. Various other matters were advanced on behalf of SWSFC under the headings of failure to take relevant considerations into account and taking into account irrelevant considerations. With one exception, none of them was identified by Mr Lewis as adding materially to arguments already considered.
  67. The only additional point is that the effect of the 2001 Order is to give Rhondda Cynon Taff a windfall gain, in that it has received the sum of £43,947 under the Local Government Revenue Settlement 2001/02 in respect of its contribution to SWSFC but the Order brings about its withdrawal from SWSFC and relieves it of any obligation to contribute. Lesser windfalls arise for other councils that have received a like sum under the Local Government Revenue Settlement but are required by the Order to make reduced contributions to SWSFC. Mr Lewis submits that it is a fair inference that the Assembly did not have this relevant consideration in mind when making the Order.
  68. Mr Jarman points out that, although Rhondda Cynon Taff would get the benefit of the £43,947 this year (a sum that it would be able to use for other purposes, since it is not ring-fenced), it has had to fund part of its contributions to SWSFC out of its own resources (i.e. council tax) for the last five years when, as all agree, it should not have been a constituent of SWSFC at all. There is not a precise equivalence between the amounts paid in the past and the benefit received this year; but rough justice has been done, and all the councils have agreed to the financial consequences of the 2001 Order.
  69. I have to say that, although the councils were agreed on the matter, I can find nothing in the material before the court to indicate that the Assembly was aware of the financial consequences of the Order. It is possible that if attention had been drawn to it, the Assembly would not have taken the same view as the councils as to the appropriateness of Rhondda Cynon Taff keeping the whole of the sum already allocated to it this year out of central funds in respect of its contribution to SWSFC - a sum which appears to be significantly larger than the total of sums paid by Rhondda Cynon Taff out of its own resources to SWSFC in previous years.
  70. If it stood alone, I doubt whether this would be a sufficient reason to hold the 2001 Order to be invalid. But in circumstances where there exist other cogent grounds of invalidity, it adds to the case for quashing the Order and giving the Assembly an opportunity to rethink its position.
  71. Relief

  72. That brings me to the issue of relief. Mr Lewis puts forward a number of reasons why, if I find in favour of SWSFC on the merits of its challenge, I should not withhold relief in the exercise of my discretion. They include the following:
  73. i) The court ought to be slow to exercise a discretion that will leave in place an invalid order.

    ii) As to the first issue, the effect of the 2001 Order is to reduce SWSFC's chargeable expenses from the budgeted figure of £396,000 to the column 3 total of £354,000. If SWSFC is to have its budget cut by the Assembly, it is entitled to have it done lawfully; and it would be wrong for this court to exercise its discretion to withhold relief on the ground that it would have been open to the Assembly to impose a cap on expenditure and that the situation created by the 2001 Order is not very different in practice. Although it may be open for the Assembly to impose a cap on expenditure, that should be done properly, with full opportunity for debate and with an opportunity for SWSFC to challenge any such Order by way of judicial review in the light of its specific terms and the circumstances of its adoption.

    iii) To quash the decision gives rise to no practical difficulties. The Assembly can either make a further Order or leave in place the pre-existing arrangements for the current financial year: the budget was set and levies were issued in February 2001, and the major part of the amounts due were allocated to the councils (including Rhondda Cynon Taff) in the Local Government Revenue Settlement for 2001/02.

    iv) The Assembly was very slow to act to seek to remedy the problem created by the absence of a power in the 2001 Order to make substituted levies for additional amounts, in particular in relation to unforeseen expenses; and SWSFC has in consequence been placed in a very difficult position for many months. In any event the 2001 Regulations do not remedy the problem. There is also a realistic possibility that, if the Assembly had realised the deficiency at the time of making the 2001 Order, it would have included a different and higher baseline in the Order.

    v) Even where a levy can be issued, payment of the sum levied is enforceable as a debt. It would be open to a council to rely on the invalidity of the 2001 Order as a defence in proceedings to recover the debt even if on judicial review the court had exercised its discretion not to quash the Order (see Credit Suisse v. Allerdale Borough Council [1997] QB 306 at 343-4, 347D and 357E). At the very least, there can be no guarantee that problems would not arise. The court should not allow such a situation to be created by the discretionary refusal of relief.

  74. I accept the main thrust of those submissions but think it unnecessary to examine every detail of them. In my judgment it cannot be said that the legal problems affecting the 2001 Order have all been remedied or that the substantive outcome would inevitably have been the same if the Assembly had been aware of the problems at the time of making the Order. I am satisfied that the overall merits of the case are such that it would be wrong for me, as a matter of discretion, to deny SWSFC the relief it seeks and to which it is otherwise entitled. I also think it likely that the Assembly would wish to consider the position further in the light of the matters thrown up by these proceedings and my judgment.
  75. Conclusion

  76. For the reasons given, I have no doubt that the correct course is to quash the 2001 Order. It will then be for the Assembly to decide whether to make a new order and, if so, in what terms. So far as the legal issues are concerned, it will have this judgment for guidance. Underlying the legal challenge, however, are substantive issues as to the functions and funding of SWSFC which are not the concern of the court but which require careful thought by the Assembly notwithstanding the agreement reached between the constituent councils.
  77. ***************

    MR JUSTICE RICHARDS: I am handing down judgment in this case. The judgment handed down takes into account the factual and typo-graphical comments provided by counsel, most of which I have adopted and for which I am grateful.PRIVATE 

    For the reasons given in the judgment, the claim for judicial review succeeds and the South Wales Sea Fisheries Variation Order 2001 made by the National Assembly for Wales on 29th March 2001 will be quashed.

    MR LEWIS: I am grateful, my Lord, for the order quashing the order.

    The second issue is costs. We say quite simply, my Lord, costs follow the event. We had to come to court to establish that this order was invalid. We have done so, and we say that we ought to have the entirety of our costs, to be subject to detailed assessment if not agreed.

    I anticipate Mr Jarman will take issue with whether it should be apportioned or not. I can deal with that now, or it may be sensible to hear what Mr Jarman says.

    MR JUSTICE RICHARDS: Let us hear what Mr Jarman says first. Yes, Mr Jarman?

    MR JARMAN: Thank you, my Lord. As Mr Lewis has said, the claimant has succeeded and of course that is a powerful factor which the Court will take into account in exercising its discretion as to costs. But the Court now also needs to look at the issues upon which it succeeded and how proportionate those issues were to the way in which the case was conducted.

    I have two main points on this. The first is that the Sea Fisheries' Committee had a draft of the order some time before it was made and had the benefit of legal advice. They did not take, clearly, the points upon which they succeeded, which were two-fold basically: the fact that the order fixed an amount and the fact that the Assembly did not take into account the amount that was (inaudible).

    Neither of those points were clearly spelt out in the letters or briefing notes which the Committee sent to the Assembly. Many other points were taken, but not those. The fundamental objection at the time from the Committee was that there was a cash limited order, not a cash fixed order. Had these points been taken then, in March, before the order was made, it may well have been that this case would not have been necessary at all. That is my first point.

    My second point is that when the claim was made a number of different points were taken. I do not think your Lordship needs to go to it, but I do refer to the letter of 4th April from the Committee, or the Committee's solicitors I should say, immediately after the order was made. It is to be found at page 121 of the bundle.

    That is a very long letter indeed and set out a number of different points. It is a letter that runs to something like 15 pages with about seven different allegations. Indeed, six different points were pursued to trial, two of which have succeeded.

    That, of course, has two consequences. The first is the question of whether it is reasonable for the Assembly to have to pay for the undoubted costs which all those points took in the preparation of the claimant's case. The second point is, of course, that the Assembly itself incurred further costs in dealing with all these different points.

    For all those reasons, my submission is that, whilst accepting that the claimants have succeeded and that they should have some of their costs, my submission is that they should not have all of their costs but a proportion thereof.

    MR JUSTICE RICHARDS: Yes. Thank you very much.

    MR LEWIS: My Lord, if I could deal with both of those matters? Firstly, it is of course for the Assembly to make a lawful order. Secondly, your Lordship will recall from the correspondence that was referred to during the course of the hearing, and indeed our resolution, that we objected to an order that was in anything other than percentage terms, which is the first issue that your Lordship had to deal with.

    That is the first response to that, my Lord. It is their responsibility and they took legal advice to get it right. They did not and, as I say, we have always objected to the percentage point.

    On a related matter, my Lord, one of the issues that became central was the levies issue. We told them about the absence of a power to issue levies when the claim was brought. Right up until the very end of the hearing, they still failed to explain whether or not they had or had not taken that into account. They failed to take any steps to deal with the levies issue between the claim form and a few days before the hearing.

    So, my Lord, really you have to look at the conduct of both parties and here, as I say, the primary responsibility for getting the order right is on the Assembly who made the order. We had always objected to percentages and, so far as the second issue is concerned, even when we draw it to their attention not only did they not take steps to remedy the problem, they refused right up to the end of the trial to tell us whether or not they were aware of the problem at the outset.

    So far as the issues in the letter are concerned, my Lord, you have seen the claim form and there is absolutely nothing, with respect, to suggest that the Assembly incurred any costs in dealing with evidence and so on in relation to the claim form that went beyond the issues that were argued. You have seen the claim form and seen the evidence of Mr O'Sullivan on that.

    Your Lordship obviously remembers the hearing and your Lordship was kind enough to say that both counsel were focussed in the hearing. We did not stray beyond the legal issues that needed to be addressed.

    So far as the question of different issues, that we succeeded on two and not on others, that is not fully accurate, my Lord. I can deal with that in detail should your Lordship need to, but the starting point as your Lordship will know from 44.3 of the CPR is that normally a successful party who has been forced to come to court should get its costs. There are matters, such as the conduct of the parties and so on, or a clearly severable issue, which may reduce that but none of the factors in 44.3 apply here and your Lordship may want to have 4.3 in mind and the guidance. Your Lordship probably has it open, I suspect.

    MR JUSTICE RICHARDS: Yes.

    MR LEWIS: Your Lordship will see at 795 the guidance from case law. You know what issues have been pursued and your Lordship knows that we won on two. The third, the windfall issue, you said may not have been enough to quash but was relevant to this question. The fourth, the second issue, the Assembly was saying that, in fact, there was a requirement that there be a majority decision by the councils. Your Lordship has found that that is wrong and you accept our argument that they have to defer the expenses, but then you say that because you have accepted that argument that makes the order workable.

    All those issues really stem from the scope of the powers of the Assembly and of the relevant Act and the order that was prepared. In my submission, my Lord, it is very difficult to see how our conduct in pursuing this litigation is such as to disentitle us to any of our costs.

    Unless I can assist your Lordship further, that would be the submission on the issue of all or nothing.

    MR JUSTICE RICHARDS: Thank you very much.

    I direct myself by reference to the principles set out in CPR Rule 44.3. The starting point is the general rule that the unsuccessful party will be ordered to pay the costs of the successful party, but the Court is willing to depart from that rule in appropriate cases and under the new rules is much readier to depart than it used to be.

    Looking at the particular circumstances of this case, I accept that the primary responsibility to ensure the lawfulness of the order, indeed the ultimate responsibility, is that of the Assembly. On any view, the Assembly having made an order which I found to be unlawful, must bear a heavy proportion of costs.

    I have considered Mr Jarman's submissions that it should not be required to pay the total costs. It is true that the specific points on which the Committee has succeeded were not advanced, or at least advanced in terms, in advance of the judicial review application, but the Committee did adopt the stance throughout that the only lawful approach was a percentage based formula in relation to a payment of costs.

    Moreover, when the points were taken at the beginning of the judicial review, the Assembly resisted, and resisted throughout to the conclusion of the case. So not much turns on the fact that the specific points were not advanced in that form before the proceedings.

    The written case advanced on behalf of the Committee was somewhat long, but the oral hearing was conducted with considerable economy. In my judgment, there was a proper focus upon points that it was appropriate for the Court to consider and the Committee is not to be penalised on the ground of having strayed beyond a sensible remit in terms of the case.

    The Committee succeeded on the major points advanced, albeit not on some of the lesser points; lesser points which did not take up a lot of time and which, like the major points, were directed to the essential issue of the invalidity of the order.

    Taking all those matters into consideration, I have come to the conclusion that the just order here is that the Assembly should pay the entirety of the Committee's costs. There is not sufficient reason, in my judgment, for me to depart in the exercise of my discretion from the general rule that the unsuccessful party pays the costs.

    MR LEWIS: I am obliged, my Lord, and that of course covers the cost of today's hearing because that was necessary to deal with it.

    MR JUSTICE RICHARDS: That covers the costs of the entirety of the claim including today's hearing. Is there any other application?

    MR JARMAN: My Lord, there is one point. I am sorry, I cannot see whether I am interrupting Mr Lewis or not; I do not wish to interrupt him.

    MR LEWIS: I have no further applications to make.

    MR JUSTICE RICHARDS: The ball is in your court, Mr Jarman.

    MR JARMAN: My Lord, the point is this: we now have what I may say is a very clear order and the Assembly will have to consider that judgment. Clearly everyone accepts that there has to be some sort of order. There are outstanding applications and there will have to be a further order made.

    As I understand it, there is already a dialogue commenced between the Assembly constituent councils and indeed the Committee itself as to how that may take place.

    In those circumstances, I am instructed to invite the Court not at present to issue the order quashing the March order. The claimant can, if it so wishes, always come back to court for that order to be issued, but at present I am instructed to ask that no order be issued.

    MR JUSTICE RICHARDS: What do you say about that, Mr Lewis?

    MR LEWIS: My Lord, in relation to that: one, it is astonishing that an illegal order be left on the books; two, the difficulty we have is, because of the existence of this order, we have three councils who are saying we are only supposed to pay the amount in the order, not the amount in the original levies that were issued. We say, really, you should do the logical thing which is to quash the order, the order which is issued now, we can then enforce the original levies that we issued and there would be question mark or argument as to whether or not those are superceded by the order.

    Thirdly, it is very difficult to see why the fact that you are now going to have a new order -- which everybody accepts, according to Mr Jarman, in the light of your judgment is going to happen -- any merit is served by pretending to preserve any distance or having some legal issue arising as to the status of the old order. It is much better that it goes and then the parties (inaudible).

    MR JARMAN: My Lord, if I may come back on that: if there is going to be a new order, it would be pointless, in my submission, for the Committee to issue its levies now if, in the course of the next week or so -- perhaps now until the new year -- there is going to be an agreed or an imposed different regime.

    MR JUSTICE RICHARDS: Yes. Thank you, Mr Jarman.

    First of all, I take the view that the order must be quashed and that, in the light of my judgment that it is an unlawful order and my decision to exercise my discretion to quash, it would be wrong for me to do anything other than to quash it with immediate effect. I decline the application or suggestion that the order should be suspended.

    I stress, however, that that should not prevent sensible discussion between the parties of alternative arrangements. I have to say that it strikes me, from what I have seen of this case, that it would not be sensible, and it might be said to be unduly provocative, for the Committee immediately to seek to give effect to the arrangements that will be left in place as a result of the quashing of the order pending further discussion between the parties as to an appropriate alternative arrangement, including possibly a new order.

    But that is entirely a comment based on what I have seen of the case and the position between the parties, and it is not something that can have any legal effect.

    MR LEWIS: I ought to make your Lordship aware that, so far as we are aware, now that the original levies can be enforced without a problem about the order -- the levies that were issued on 8th February -- whilst I will relay your Lordship's comments to the clients, I do not anticipate that we will do anything other than enforce the rights that we have.

    So I take your Lordship's observations on board and I will relay them, that your Lordship is effectively asking us whether it is sensible to wait or to issue now, but I would not want this court to be under any illusion that we are going to accede to this request.

    MR JUSTICE RICHARDS: This is a matter which goes into, effectively, the political arena into which it is not my function to trespass. I have said all I propose to say. Thank you very much.

    MR LEWIS: I am obliged, my Lord.


© 2001 Crown Copyright


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