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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Racal Communications Ltd, Re [1980] UKHL 5 (03 July 1980) URL: https://www.bailii.org/uk/cases/UKHL/1980/5.html Cite as: [1980] 2 All ER 634, [1981] AC 374, [1980] 3 WLR 181, [1980] UKHL 5 |
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RACAL
COMMUNICATIONS LIMITED03 July 1980
Lord Diplock
Lord Salmon
Lord Edmund-Davies
Lord Keith of Kinkel
Lord Scarman
Lord Diplock
My Lords,
" 441.—(1) If on an application made—
(a) in England, to a judge of the High Court in chambers by the Director of Public Prosecutions, the Board of Trade or a chief " officer of police; or
(b) in Scotland, to one of the Lords Commissioners of Justiciary by the Lord Advocate; there is shown to be reasonable cause to believe that any person has, while an officer of a company, committed an offence in connection with the management of the company's affairs and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company, an order may be made—
(i) authorising any person named therein to inspect the said books or papers or any of them for the purpose of investigating and obtaining evidence of the offence; or
(ii) requiring the secretary of the company or such other officer thereof as may be named in the order to produce the said books or papers or any of them to a person named in the order at a place so named.
(2) . . . .
(3) The decision of a judge of the High Court or of any of the Lords Commissioners of Justiciary on an application under this section shall not be appealable."
Racal
"), who are appellants in your Lordships' House, received no notice of the application to Mr. Justice Vinelott, nor of the appeal to the Court of Appeal brought by the Director of Public Prosecutions against the judge's refusal to make the order sought. On 31st July 1979 the Court of Appeal reversed the judge's decision and made an order authorising named persons to inspect " all books, records, correspondence and other papers belonging to or under the control " of
Racal,
and ordering a director of
Racal
to produce them to the persons so named. The first time that
Racal
heard anything about the proceedings was when that order of the Court of Appeal was served upon them; and the first opportunity that
Racal
has been afforded to advance reasons why the Court of Appeal ought not to have made the order has been before your Lordships' House.
Racal
rely upon is that the Court of Appeal had no jurisdiction to entertain an appeal from a decision of a High Court judge made in the exercise of the statutory jurisdiction conferred upon him by section 441(1) of the Companies Act 1948. Their argument is simplicity itself and can be stated in a single sentence. Subsection (3) provides that his decision shall not be appealable. One asks oneself rhetorically: "What "could be plainer than that?" What principle of statutory interpretation can lead one to suppose that parliament when it said " not appealable " really meant "appealable on some grounds but not on others?" To give to the phrase " shall not be appealable " its ordinary and, linguistically, its only possible meaning, does not lead to results so manifestly absurd or unjust as to drive one to the conclusion that parliament must have intended that, despite the unqualified language used, the judge's decision should be unappealable on some grounds only but appealable to the Court of Appeal on others.
Racal's
papers is a nullity and must be set aside.
Racal
was suspected did not fall within the section. He also doubted whether the employee fell within the class of " officer of a company " within the meaning of the Companies Act 1948. The ground on which he dismissed the application was therefore one of law. The Court of Appeal were of opinion, rightly or wrongly, 'that the learned judge had misconstrued the statute and held further that section 441(3) did not render his decision unappealable if it were based on a mistake of law.
" No appeal shall lie... (d) from the decision of the High Court or of any judge thereof where it is provided by any Act that the decision of any court or judge, the jurisdiction of which or of whom is now vested in the High Court, is to be final."
Lord Salmon
My Lords,
" No appeal shall lie... (d) from the decision of the High Court or of any judge thereof where it is provided by any Act that the decision of any court or judge, the jurisdiction of which or of whom is now vested in the High Court, is to be final."
Lord Edmund Davies
My Lords,
Racal
Communications Ltd. ("
Racal
") repair communications equipment under contract for the Ministry of Defence at cost plus a fixed percentage of profit. Suspicion was aroused that during the period 1975 to 1978
Racal
improperly obtained sums totalling £200,000 approximately by inflating the cost item in the estimates they submitted to the Ministry, thus extracting profit percentages above those to which they were contractually entitled. It was further suspected that this dishonest practice had originated in instructions given to employees by the head of
Racal's
quotations department. The institution of criminal proceedings being contemplated, the Director of Public Prosecutions understandably desired to have sight of the Company's records. So on April 2, 1979 he commenced ex parte proceedings in Chambers by originating summons under R.S.C. Order 102 rule 2 in the Chancery Division for an order pursuant to section 441(1) of the Companies Act 1948. That subsection is in the following terms:
If on an application made—
(a) in England, to a judge of the High Court in chambers by the Director of Public Prosecutions, the Board of Trade or a chief officer of police; or
(b) in Scotland, to one of the Lords Commissioners of Justiciary by the Lord Advocate;
there is shown to be reasonable cause to believe that any person has, while an officer of a company, committed an offence in connection with the management of the company's affairs and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company, an order may be made—
(i) authorising any person named therein to inspect the said books or papers or any of them for the purpose of investigating and obtaining evidence of the offence; or
(ii) requiring the secretary of the company or such other officer thereof as may be named in the order to produce the said books or papers or any of them to a person named in the order at a place so named."
Racal
staff. He also expressed doubt that the evidence adduced was sufficient to give rise to " a reasonable belief that the fraud was " perpetrated by an officer of the company " as that term was defined in section 455. But he " willingly " granted the Director of Public Prosecutions leave to appeal to the Court of Appeal, and this was done notwithstanding the provision in subsection (3) of section 441 that " The decision of a judge of the " High Court... on an application under this section shall not be appealable ", to which no attention was apparently paid.
Racal
had no opportunity of raising it, for they had no knowledge of the proceedings until the order of the Court of Appeal was served upon them on August 30. But Lord Denning M.R. rightly regarded it as "The first question which " arises...", and he prefaced his observations by saying of Vinelott, J.'s decision:
" Having come to that limited construction of the words * an offence "' in connection with the management of the company's affairs', he refused any jurisdiction in the matter and declined to make the order which the Director of Public Prosecutions sought." (Emphasis added here and in all subsequent quotations.)
" In my opinion [section 441(3)] is not a bar to the appeal to this court. There are many cases now which show that if a judge misconstrues a statute by giving himself jurisdiction when he has none or by refusing jurisdiction when he has it, then he makes an error which goes to the "jurisdiction; and there is an appeal to this court, no matter how wide the words which seem to exclude it."
" It seems to me that in this case, if the judge made an error of law *' in construing the words of the section—if he construed the words 'an offence', etc., too narrowly—then he made an error of law which "made him refuse jurisdiction when he ought to have entertained it. So the appeal can be entertained here in this court."
"No appeal shall lie... (d) from the decision of the High Court or of any judge thereof where it is provided by any Act that the decision of any court or judge, the jurisdiction of which or of whom is now vested in the High Court, is to be final ".
" No judgment or order of any judge of county courts... shall be removed by appeal, motion, certiorari or otherwise into any other court whatever ".
"... the distinction between an error which entails absence of jurisdiction— and an error made within the jurisdiction—is very fine. So fine indeed that it is rapidly being eroded. Take this very case... [The judge's] error can be described on the one hand as an error which went to his jurisdiction ... By holding that it was not a ' structural alteration ... or addition' he deprived himself of jurisdiction to determine those matters. On the other hand,... it can plausibly be said that he had jurisdiction to inquire into the meaning of the words ... and that his wrong inter-pretation of them was only an error within his jurisdiction, and not an *' error taking him outside it.
....
" I would suggest that this distinction should now be disregarded. The High Court has, and should have, jurisdiction to control the proceedings of inferior courts and tribunals by way of judicial review. When they go wrong in law, the High Court should have power to put them right... The way to get things right is to hold thus: no court or tribunal has any jurisdiction to make an error of law on which the decision of the case depends. If it makes such an error, it goes outside its jurisdiction and certiorari will lie to correct it....
"..... I am of opinion that certiorari lies to quash the determination of the judge, even though it was made by statute ' final and conclusive ' ".
" The judge is considering the words... which he ought to consider. "He is not embarking on some unauthorised or extraneous or irrelevant exercise. All he has done is to come to what appears to this court to . "be a wrong conclusion upon a difficult question. It seems to me that, if this judge is acting outside his jurisdiction, so then is every judge who comes to a wrong decision on a point of law. Accordingly, I take the view that no form of certiorari is available to the tenant."
Lord Keith of Kinkel
My Lords,
Lord Scarman
My Lords,
" Section 441(3) provides: 'The decision of a judge of the High Court.., 'on an application under this section shall not be appealable.' In my opinion, that subsection is not a bar to the appeal to this court. There are many cases now which show that if a judge misconstrues a statute by giving himself jurisdiction when he has none or by refusing jurisdiction when he has it, then he makes an error which goes to the jurisdiction: and there is an appeal to this court, no matter how wide the words which seem to exclude it. For authority in this regard I need only refer to Anisminic Ltd. v. Foreign Compensation Commission, and especially to what was said by Lord Reid, by Lord Pearce and by Lord Wilberforce, to which I would add a few words of my own in the later case of Pearlman v. Keepers and Governors of Harrow School... ' no court... has any jurisdiction to make an error of law on which the decision of the case depends.' It seems to me that in this case, if "the judge made an error of law in construing the words of the section, if he construed the words ' an offence ' etc. too narrowly, then he made ' an error of law which made him refuse jurisdiction when he ought to ' have entertained it. So the appeal can be entertained here in this court."
"... the determination by the commission of any application made to them under this Act shall not be called in question in any court of law."
" It is a principle not by any means to be whittled down that the subject's recourse to Her Majesty's courts for the determination of his rights is not to be excluded except by clear words."
" The position under the Judicature Act of the Court of Appeal is very peculiar. When an appeal comes to them as to costs awarded by the discretion of a judge, they cannot exercise their discretion instead of his unless leave to appeal from his order as to costs has been given by him. By a long series of decisions the Court of Appeal has held that that does not prevent them upsetting what the judge has done if they "can find that he had no proper materials on which his discretion was exercised."
Die Jovis 3° Julii 1980
Upon Report from the Appellate Committee to whom in reRacal
was referred the Cause In re
Racal
Communications Limited, That the Committee had heard Counsel on Limited. Tuesday the 3rd day of June last upon the Petition and Appeal of
Racal Communications Limited of Western Road, Bracknell, Berkshire praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 31st day of July 1979 might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered and that the Petitioners might have the relief prayed for in the Appeal or such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of the Director of Public Prosecutions lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 31st day of July 1979 complained of in the said Appeal be, and the same is hereby, Reversed and that the Order of Mr. Justice Vinelott of the 6th day of April 1979 be, and the same is hereby Restored: And it is further Ordered, That the Respondent do pay or cause to be paid to the said Appellants the Costs incurred by them in the Court of Appeal and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.
312572—1 Dd 8013620 50 7/80