New points not for trial

From Times Online

June 3, 2010

Regina v Penner

 

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Court of Appeal, Criminal Division

Published June 3, 2010

Defence counsel must avoid ambushing the prosecution with a new issue.

The Court of Appeal, Criminal Division (Lord Justice Thomas, Mr Justice Henriques and Mr Justice Openshaw) so stated on May 5, 2010, when dismissing an appeal by Steven Henry Penner against his conviction on August 8, 2008, at Reading Crown Court (Ms Recorder Arbuthnot and a jury) of making, by downloading on to his computer, indecent images of children contrary to section 1 of the Protection of Children Act 1978.

LORD JUSTICE THOMAS said that, while the main line of defence had been that the defendant was not the person who downloaded the images, defence counsel had, during cross-examination of an expert witness, realised that it might be questioned whether the downloading had taken place in the UK. He had raised that point at half-time by submission that there was no case to answer. The appeal failed because there was no evidence before the jury that the computer had been taken abroad.

The court said that counsel had to take steps in accordance with rule 3 of the Criminal Procedure Rules (SI 2005 No 384, now SI 2010 No 60), failing which at the earliest possible opportunity, to avoid ambushing the prosecution at trial with a new issue.

Interception regime is compliant with rights

From Times Online

June 3, 2010

Kennedy v United Kingdom (Application No 26839/05)

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European Court of Human Rights

Published June 3, 2010

Kennedy v United Kingdom (Application No 26839/05)

Before L. Garlicki, President, and Judges Sir Nicolas Bratza, G. Bonello, L. Mijovic, P. Hirvelä, L. Bianku and N. Vucinic Section Registrar L. Early

Judgment May 18, 2010

Sufficient safeguards existed in the United Kingdom’s interception of communications regime to ensure that individuals’ rights were not breached.

The European Court of Human Rights so stated when holding, unanimously, that secret surveillance measures did not interfere with the applicant’s private life, as guaranteed in article 8 of the European Convention on Human Rights.

When arrested for drunkenness in 1990 the applicant, Malcolm Kennedy, spent the night in detention with an inmate who was found dead the next day. Mr Kennedy was subsequently found guilty of the man’s murder and sentenced to life imprisonment. His case was controversial on account of missing and conflicting evidence.

Released from prison in 1996, Mr Kennedy started a removal business. He alleged that his business mail, telephone and email communications were being intercepted because of his high profile case and his subsequent involvement in campaigning against miscarriages of justice.

He complained to the Investigatory Powers Tribunal that his communications were being intercepted in challengeable circumstances amounting to a violation of his private life. In 2005 that tribunal ruled that no determination had been made in his favour in respect of his complaints. That meant either that there had been no interception or that any interception which took place was lawful.

The European Court of Human Rights held:

The interference in question pursued the legitimate aims of protecting national security and the economic well being of the country and preventing crime. In addition, it was carried out on the basis of the Regulation of Investigatory Powers Act 2000 supplemented by the Interception of Communications Code of Practice.

The 2000 Act was available on the internet, and hence accessible. It defined with sufficient precision the cases in which communications could be intercepted.

While the offences allowing interception were not set out by name, the Court noted that states were not compelled to list exhaustively national security offences as those were by nature difficult to define in advance. As only communications within the United Kingdom were concerned in the present case, unlike in Liberty and Others v UK (The Times July 11, 2008) the domestic law described more fully the categories of persons who could be subject to an interception of their communications.

As regards the processing, communication and destruction of data, adequate safeguards were in place. Renewal or cancellation of interception warrants were under the systematic supervision of the secretary of state.

In addition, contrary to the practice for communications with other countries, the domestic law provided that warrants for internal communications related to one person or one set of premises only, thereby limiting the scope of the authorities’ discretion to intercept and listen to private communications.

The law, more specifically the Code, also strictly limited the number of persons who had access to the intercept material, of which only a summary would be disclosed whenever sufficient. It also required the data to be destroyed as soon as they were no longer necessary, and detailed records of the warrants to be kept.

In terms of supervision of the 2000 Act regime, under the legislation, a commissioner was appointed who was independent from the executive and legislative authorities. His annual report to the Prime Minister was a public document and was laid before Parliament.

The Court found his role in ensuring that the legal provisions were applied correctly very valuable, as well as his biannual review of a random selection of specific cases in which interception had been authorised.

The Court further highlighted the extensive jurisdiction of Investigatory Powers Tribunal to examine any complaint of unlawful interception of communications. Unlike in many other countries, any person could apply to that tribunal which was an independent and impartial body. It had access to closed material and could require the commissioner to order disclosure of all documents it considered relevant. When the tribunal found in the applicant’s favour, it could quash any interception order, require destruction of intercepted material and order compensation. The publication of the tribunal’s legal rulings further enhanced the level of scrutiny over secret surveillance activities in the United Kingdom.

The Court concluded, unanimously, that in the present case the relevant domestic provisions indicated with sufficient clarity the procedures concerning interception warrants as well as the processing, communicating and destruction of data collected. The Court further observed that there was no evidence of any significant shortcomings in the application and operation of the surveillance regime. There was no breach of article 8.

• Full text: http://www.echr.coe.int

Knowledge of fraud attracts tax penalty

From The Times

June 2, 2010

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Court of Appeal
Pulished June 2, 2010

Mobilix Ltd (in Administration) v HM Revenue and Customs Blue Sphere Global Ltd v Same Calltel Telecom Ltd and Another v Same

Before Lord Justice Carnwath, Lord Justice Moses and Sir John Chadwick

Judgment May 12, 2010

Where a trader knew or should have known that by his purchase he was participating in a transaction connected with fraudulent evasion of value-added tax he lost his right to deduct input tax.

The Court of Appeal so stated when dismissing the appeals of:

(i) Mobilix Ltd (in Administration) against the dismissal by Mr Justice Floyd ([2009] EWHC 133 (Ch)) of the company’s appeal against a finding of the VAT and Duties Tribunal that the company should have known that its transactions were more likely than not to be implicated in VAT fraud;

(ii) the Revenue and Customs against a decision of Sir Andrew Morrit, Chancellor ([2009] EWHC 1150(Ch)) allowing the appeal of Blue Sphere Global Ltd that the aforesaid tribunal was wrong to have concluded that it was sufficient to prove that the company was involved in transactions connected with fraudulent evasion of VAT. The Chancellor held that it was necessary to prove the company ought to have known that it was participating in transactions connected with the fraudulent evasion of VAT;

(iii) Calltel Telecom Ltd and Opto Telelinks (Europe) Ltd against the dismissal by Mr Justice Floyd ([2009] EWHC 1081 (Ch)) of appeals against the VAT and Duties Tribunal finding that they knew they were participating in transactions connected with fraudulent evasion of VAT and upholding refusals of input tax credit claims.

Mr James Pickup QC, Mr Kieron Beal and Mr Iain MacWhannell for Mobilix. Mr Michael Patchett-Joyce, Mr James Rickards and Mr Colin Challenger for Blue Sphere. Mr Michael Patchett-Joyce and Mr Duncan Fairgreaves for Calltel and Opto.

Mr Mark Cunningham QC, Miss Melanie Hall QC, Mr Philip Moser, Mr Ian Hutton, Mr Jonathan Hall and Ms Fiona Banks for the Revenue and Customs in all three cases.

LORD JUSTICE MOSES said that the appeal turned on what the European Court of Justice meant in Axel Kittel v Belgium; Belgium v Recolta Recycling (Joined Cases C-439/04 and C-440/04) ([2006] ECR 1-6161). The right to deduct input tax could be refused if: “… it is ascertained, having regard to objective factors, that the taxable person knew or should have known that, by his purchase, he was participating in a transaction connected with fraudulent evasion of VAT”: see paragraphs 59 and 61.

Two essential questions arose: what the European Court of Justice meant by “should have known”, and second the extent of the knowledge which it must be established that the taxpayer had or ought to have had: was it sufficient that the taxpayer knew or should have known that it was more likely than not that his purchase was connected to fraud or must it be established that he knew or should have known that the transactions in which he was involved were connected to fraud?

Once it was appreciated how closely Kittel followed the approach in Optigen Ltd v Commissioners of Customs and Excise (Case C-354/03) (The Times January 17, 2006; [2006] ECR 1-483) it was not difficult to understand what it meant when it said that a taxable person “knew or should have known”.

If a taxpayer had the means at his disposal of knowing that by his purchase he was participating in a transaction connected with fraudulent evasion of VAT he lost his right to deduct, not as a penalty for negligence, but because the objective criteria for the scope of that right were not met.

In his Lordship’s judgment, the test in Kittel was simple and should not be over-refined. It embraced not only those who knew of the connection but those who should have known. Thus it included those who should have known from the circumstances surrounding their transactions that they were connected to fraudulent evasion.

The principle in Kittel, properly understood, was compliant with the rights of traders to freedom from interference with their property enshrined in article 1 of the First Protocol to the European Convention on Human Rights.

Kittel did no more than to remove from the scope of the right to deduct, a person who, by reason of his degree of knowledge, was properly regarded as one who had aided fraudulent evasion of VAT.

Sir John Chadwick and Lord Justice Carnwath agreed.

Solicitors: Bark & Co. Thomas Cooper. Khan Partnership LLP, Bloomsbury.

Howes Percival LLP, Norwich and Solicitor, Revenue and Customs.

Omission is a jury point

From The Times

June 2, 2010

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Court of Appeal, Criminal Division

Published June 2, 2010

Regina v Lancaster

The jury had to decide on the facts of the case whether an omission in a claim form was significant.

The Court of Appeal, Criminal Division (Lord Justice Toulson, Mr Justice Cox and Judge Barker, QC) so held on March 2, 2010, when dismissing an appeal by Paul Lancaster against his convictions on August 20, 2009 at Reading Crown Court (Judge McIntyre and a jury) of two offences of false accounting in housing and council tax benefit claim forms, contrary to section 17 of the Theft Act 1968, and two offences of dishonestly failing to notify a change of circumstances for the purpose of obtaining benefits, contrary to section 111A(1A) of the Social Security Administration Act 1992, as inserted by section 16 of the Social Security Fraud Act 2001.

LORD JUSTICE TOULSON said that section 17 of the 1968 Act did not require that obtaining financial gain or causing financial loss should in fact result.

Whether an omission was significant would depend on the nature of the document and the context. It was for the jury to judge for themselves, on the particular facts of the case, whether they regarded the omission as significant.

Where the document was an application form containing questions, it did not necessarily follow that an incomplete or incorrect answer would be material. An error or omission might be trivial. Further, it was possible to envisage cases where an application form included questions which had no discernable bearing on the processing of the application.

Therefore there was no hard and fast rule that any omission to supply information required by an application form would necessarily amount to the omission of a material particular.

Late substitution is not possible

From Times Online

May 27, 2010

 

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O’Byrne v Aventis Pasteur MSD Ltd

Before Lord Hope of Craighead, Lord Saville of Newdigate, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond

Judgment May 26, 2010

Supreme Court

Published May 27, 2010

Domestic law could not allow the producer of an allegedly defective product to be substituted as the defendant more than ten years after its being put into circulation in place of a wholly owned subsidiary, who was the supplier, but had been erroneously thought to be the producer, unless the parent company had actually determined when the supplier put the product in circulation.

The Supreme Court so held in allowing an appeal by a parent company, Aventis Pasteur SA, against the Court of Appeal (Sir Anthony Clarke, Master of the Rolls, Lady Justice Arden and Lord Justice Moore-Bick)(The Times November 19, 2007; [2008] 1 WLR 1188) who upheld Mr Justice Teare (The Times November 22, 2006; [2007] 1 WLR 757) who had allowed substitution of the parent company for Aventis Pasteur MSD Ltd as the defendant in an action by the claimant, Declan O’Byrne, suing by his mother and next friend, for damages for personal injury under the Consumer Protection Act 1987.

The appeal had first come before the House of Lords (Lord Hoffmann, Lord Hope of Craighead, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe and Baroness Hale of Richmond) who, on June 11, 2008, had referred to the Court of Justice of the European Communities the question whether the substitution was consistent with article 11 of Council Directive 85/374/EEC concerning liability for defective products (OJ August 7, 1985 L210/29-33).

In O’Byrne v Aventis Pasteur SA (Case C-358/08) (The Times December 9, 2009)) the European Court had ruled, inter alia, that article 11 did not preclude a national court from allowing a substitution if proceedings had been instituted in time against a wholly owned subsidiary of the producer and the national court found that “the putting into circulation of the product” had in fact been determined by that producer.

Mr George Leggatt, QC, for the parent company; Mr Simeon Maskrey, QC and Mr Hugh Preston for the claimant.

LORD RODGER said that the claimant had argued that the parent company had determined that the product should be put into circulation by transferring it to its wholly owned subsidiary and had then in fact done so and so the case fell within the European Court’s ruling.

However, his Lordship accepted the parent company’s argument that the ruling was to be interpreted as requiring that “the putting into circulation of the product by the supplier” had been determined by the parent company which had manufactured it.

The claimant had accepted that if the parent company’s interpretation was correct then its appeal against its substitution for the subsidiary company should be allowed.

Lord Hope, Lord Saville, Lord Walker and Lady Hale agreed.

Solicitors: Arnold & Porter LLP; Freeth Cartwright LLP, Nottingham.

Pragmatic approach to trade union case

From Times Online

May 26, 2010

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Court of Appeal

Published May 26, 2010

British Airways plc v Unite

Before Lord Judge, Lord Chief Justice, Lord Neuberger of Abbotsbury, Master of the Rolls, and Lady Justice Smith

Judgment May 20, 2010

It was not appropriate to adopt an over-literal interpretation of a poorly drafted section which might defeat the policy behind the relevant Act.

The Court of Appeal so stated, the Master of the Rolls dissenting, in a reserved judgment allowing the appeal of the defendant trade union, Unite, from the order of Mr Justice McCombe ([2010] EWHC 1196 (QB)) granting the application of the claimant, British Airways plc, for an interlocutory injunction restraining proposed strike action pending trial of the issue.

The defendant was a union representing workers employed as cabin crew by British Airways. Following a ballot of members of the union an overwhelming majority was found to have voted in favour of strike action.

Part V of the Trade Union and Labour Relations (Consolidation) Act 1992 contains provisions providing protection to acts in contemplation or furtherance of trade disputes. Section 231 provides: “As soon as is reasonably practicable after the holding of the ballot, the trade union shall take such steps as are reasonably necessary to ensure that all persons entitled to vote in the ballot are informed of the number of (a) votes cast in the ballot; (b) individuals answering yes to the question, or as the case may be, to each question; (c) individuals answering no to the question or as the case may be, to each question; and (d) spoiled voting papers.”

British Airways asserted that the union had not provided its members with information as to the number of spoiled ballot papers and that, having failed to comply with section 231, the union was not entitled to statutory protection under Part V from liability in tort; and it obtained, interlocutory injunctive relief to prevent strike action.

Mr John Hendy, QC and Mr Ben Cooper for the union; Mr David Reade, QC and Mr Paul Gott for British Airways.

THE LORD CHIEF JUSTICE said that section 231 of the Act was poorly drafted, and in particular the meaning of the words “reasonably necessary” was unclear.

Regard to the policy underlying the applicable part of the Act, and a review of authority and of other provisions within the Act, demonstrated that the union was not required by section 231 to prove that literally every eligible member was personally sent the applicable results, particularly where in the instant case the workforce was highly computer-literate and information had been made available on relevant websites.

The key complaints of British Airways were that active communication had not been used and that alternative means could have been used, such as post and text, beyond the steps which were taken to inform members of the ballot details.

However, there was a high probability that, at trial, the union would succeed in establishing that it had satisfied the requirements of section 231 even if British Airways were able to demonstrate that more could have been done.

The judge had underestimated the strength of the union’s case that on this issue it would be entitled to the protection provided by Part V of the Act against liability in tort.

THE MASTER OF THE ROLLS, dissenting, stated that the judge had correctly adopted an interpretation of section 231 of the Act which required strict compliance and the union had not strictly complied with the applicable requirements.

Lady Justice Smith delivered a judgment concurring with the Lord Chief Justice.

Solicitors: Thompsons; Baker & McKenzie.

Tenant loses protection

From Times Online

May 26, 2010

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Court of Appeal

Published May 26, 2010

Hughes v Borodex Ltd

Before Sir Andrew Morritt, Chancellor, Lady Justice Arden and Lord Justice Patten

Judgment April 27, 2010

A landlord was entitled to serve notice to quit on a tenant who lost her protected tenancy by carrying out improvements in the property which resulted in its rent exceeding the assured protected tenancy limit.

The Court of Appeal so held when dismissing the appeal of the tenant, Cherry Sheila Hughes, from the dismissal by Mr Justice Collins ([2009] EWHC 565 (Admin)) of her appeal from the decision of a rent assessment committee on May 7, 2008, that it was not entitled to disregard improvements made by her when assessing the rent payable to the defendant landlord, Borodex Ltd, under the new assured periodic tenancy created by the Housing Act 1988, which was to replace her long residential tenancy which had expired.

Mr Martin Rodger, QC and Ms Victoria Williams for the tenant; Mr Philip Rainey, QC and Mr Christopher Heather for the landlord.

LADY JUSTICE ARDEN said that provisions for rent reviews and fixing the rent often provided for a tenant’s improvements to be disregarded in the interests of fairness to the tenant. But there was no uniform rule on that.

However, if improvements were to be disregarded under the new form of tenancy that the tenant now had, that result had to be achieved on the interpretation of Schedule 10 to the Local Government and Communities Act 1989.

Her Ladyship said the effect of paragraphs 9 and 11 of Schedule 10 to the 1989 Act in their form and context in relation to rent was clear. Their function was limited to that of enabling the rent to be fixed at the outset.

Once the initial terms, including rent, were fixed, those paragraphs were spent and it was open to the landlord to serve a notice to quit and start the procedure for fixing a new rent under the provisions of section 13 of the 1988 Act.

Schedule 10 to the 1989 Act merely applied in the period immediately after the creation of the new assured tenancies and not throughout their duration.

It was not for the court to assume that Parliament necessarily intended to produce the opposite result with regard to improvements.

It was of course open to Parliament to ameliorate the position, to some extent, by raising the limit, not raised since 1989, for the purpose of the qualifying conditions for assured tenancies.

Lord Justice Patten and the Chancellor agreed.

Solicitors: David Tagg & Co, Fulham; Forsters, Westminster.

Amendments require consent of members

From Times Online

May 24, 2010

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Queen’s Bench Division

Published May 24, 2010

Regina (Public and Commercial Services Union) v Minister for the Civil Service

Before Mr Justice Sales Judgment May 10, 2010

The consent of members of the Civil Service Compensation Scheme was required before valid changes could be made which deprived them of rights which had accrued in respect of redundancy and compulsory early retirement.

Mr Justice Sales so held in the Administrative Court of the Queen’s Bench Division when granting the application of the claimant, the Public and Commercial Services Union, to quash amendments made to the scheme by the Minister for the Civil Service.

Mr Nigel Giffin, QC and Mr Nicholas Randall for the union; Ms Elisabeth Laing, QC and Mr Clive Sheldon for the minister.

MR JUSTICE SALES said that the compensation scheme was made under section 1 of the Superannuation Act 1972.

The purpose of the claim was to contest the lawfulness of the amendments which had the effect of reducing in some cases the benefits to be received by civil servants who were made redundant or were compelled to take early retirement or were dismissed on grounds of structural reorganisation or in similar circumstances.

The background to the introduction of the changes was the growing cost of pension provision as life expectation increased, since some of the benefits involved early payment of pensions; constraints upon the public finances in current circumstances, and a desire by the government to reduce the costs of redundancy through restructuring of government departments.

The minister submitted that the new reference to “rights which have accrued” in section 2(3) of the 1972 Act, as amended by section 9 of the Pensions (Miscellaneous Provisions) Act 1990, showed that the provision conferred protection only in relation to benefits under the Principal Civil Service Pension Scheme or the compensation scheme to which individual civil servants had a full legal entitlement.

Further, such benefits were limited to benefits when retirement occurred at normal retirement age and did not include benefits payable under the compensation scheme in relation to redundancy, compulsory early retirement and so forth.

His Lordship did not accept those submissions.

On the natural reading of section 2(3) in its particular context and against the background of the Joint Superannuation Committee of the National Whitley Council report, the phrase “the rights which have accrued” was apt to cover both those pension and other rights which were a matter of legal entitlement and also other rights to benefits which were in substance a matter of administrative entitlement.

His Lordship accepted the union’s submission that section 2(3) of the 1972 Act, as amended, was properly to be interpreted as conferring protection in relation to all entitlements in the pension scheme and the compensation scheme referable to length of service and contributions paid, whether they constituted legal entitlements in the full sense or entitlements as a matter of established and declared administrative practice as set out in any relevant scheme made under section 1 of the 1972 Act.

Solicitors: Thompsons; Treasury Solicitor.

Disclosure is required

From Times Online

May 18, 2010

Bank Mellat v HM Treasury

 

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Court of Appeal

Published May 18, 2010

Where, in civil proceedings in which a litigant’s rights to a fair trial under article 6 of the European Convention on Human Rights applied, irreducible minimum rights were required to be accorded the litigant to be given sufficient information of the evidential case against him, to enable him to give effective instructions concerning the essential allegations against him.

The Court of Appeal (Lord Neuberger of Abbotsbury, Master of the Rolls, Lord Justice Maurice Kay and Lord Justice Sullivan) so held on May 4, 2010 in giving reasons for, inter alia, its dismissal on March 31 of the appeal of HM Treasury against Mr Justice Mitting ([2010] EWHC 350 (QB)) who held that the Treasury was required to apply to the claimant, Bank Mellat, such a standard of disclosure as a matter of principle.

THE MASTER OF THE ROLLS said that the Treasury acted, under in section 62 of and Schedule 7 to the Counter-Terrorism Act 2008 against terrorist financing, money laundering and certain other activities, on October 9, 2009, by making a financial restriction order prohibiting all persons in the financial sector to enter into transactions or any business relationship with the bank.

The standard of disclosure was established in A v United Kingdom (Application No 3455/05) (The Times February 20, 2009; (2009) 49 EHRR 625), as interpreted by the House of Lord in Secretary of State for the Home Department v AF (No 3) (The Times June 11, 2009; [2009] 3 WLR 74).

Liability to first spouse

From Times Online

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May 18, 2010

Vaughan v Vaughan

 

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Court of Appeal

Published May 18, 2010

Before Lord Justice Wilson, Lord Justice Hughes and Lord Justice Patten

Judgment March 31, 2010

A subsequent spouse had to take the other subject to all existing encumbrances, whether known or not.

The Court of Appeal so stated, inter alia, when allowing the appeal of the former wife, Philippa Mary Vaughan, from Mr Richard Anelay, QC, who, sitting as a deputy Family Division judge on November 3, 2009: (i) had granted an application by David Arthur John Vaughan to terminate his obligation to make periodical payments to his former wife, from whom he was divorced in 1985; and (ii) had dismissed her cross-application for an order that termination of that obligation should be in consideration of payment of a lump sum by way of capitalisation, under section 31(7B) of the Matrimonial Causes Act 1973, as inserted by section 66(1) of the Family Law Act 1996, and amended by section 19 of the Welfare Reform and Pensions Act 1999.

Mr Christopher Wagstaffe for the former wife; Mr Nicholas Mostyn, QC and Mr Timothy Bishop for Mr Vaughan.

LORD JUSTICE WILSON said that when the judge asked himself whether the husband had to continue periodical payments to the former wife he had rightly sought to apply the principles in Pearce v Pearce (The Times September 1, 2003; [2004] 1 WLR 68). However, he had wrongly given priority to the claims of the second wife.

Roberts v Roberts ([1970] P 1) established that on marriage a spouse had to be presumed to take the other subject to all existing encumbrances, whether known or not, for example, an obligation to support the wife or child of a dissolved marriage, although the court had also found that English law did not take the principle to its logical conclusion by affording primacy or priority to the claims of the first wife.

That principle was judge-made over forty years ago and thus required rigorous scrutiny in case changed social conditions had rendered it obsolete; but they had not.

Lord Justice Hughes and Lord Justice Patten agreed.

Solicitors: Hodge Jones & Allen LLP; Withers LLP.

Suing employer in administration

From Times Online

May 18, 2010

Unite and Others v Nortel Networks UK Ltd (in Administration)

 

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Before Mr Justice Norris

Judgment April 22, 2010

Chancery Division

Published May 18, 2010

A claim by an employee against an employer in administration did not require a judgment to render it provable for two reasons: the nature of the claim and the nature of the decision on which any award depended.

Mr Justice Norris so held in the Chancery Division when refusing applications by Unite, the union, and 37 other claimants seeking permission to continue proceedings against Nortel Networks UK Ltd (in administration) before an industrial tribunal in Northern Ireland.

Mr Arfan Khan for Unite; Mr David Allison for Nortel.

MR JUSTICE NORRIS said that the question was whether the claims were exceptional in some respect so as to grant permission for their continuation.

The employees would still have had claims even if permission was refused for their actions to continue to judgment and would have had claims even if actions had not been commenced. Their position in relation to the moratorium on claims was no different from that of any trade creditor or unsecured lender.

As to the nature of the claim, each claim was either a debt or liability to which the company was subject at the date of administration, or a debt or liability to which it became subject after the date of administration by reason of an obligation incurred before that date.

In any event, the court should incline towards restricting the category of claims that were not provable. It did not seem desirable, especially in relation to employees, to create a category of claim that could not be dealt with in the insolvency process and was otherwise irrecoverable.

As to the nature of the decision, the exercise of judicial discretion was a process entirely distinct from judicial adjudication. Consequently, the claims were not exceptional so as to warrant permission for their continuation and the lifting of the moratorium otherwise applying in the administration.

Solicitors: Thompsons; Herbert Smith LLP.

Family freely entitled to join refugee granted citizenship

From Times Online

May 17, 2010

ZN and Others (Afghanistan) v Entry Clearance Officer

 

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Supreme Court

Published May 17, 2010

Before Lord Phillips of Worth Matravers, President, Lord Rodger of Earlsferry,

Lord Collins of Mapesbury,

Lord Kerr of Tonaghmore and Lord Clarke of Stone-cum-Ebony

Reasons May 12, 2010

Family members who applied to enter the United Kingdom to join a sponsor who had been granted asylum did not have to meet the maintenance and accommodation requirements imposed by the ordinary rules relating to applications by family members, even if the sponsor had, by then, obtained British citizenship.

The Supreme Court so held in giving reasons for allowing, on February 15, 2010, the appeal of the claimants, ZN and her children, against the decision of the Court of Appeal (Lord Justice Laws, Lord Justice Rix and Lord Justice Wilson) ([2008] EWCA Civ 1420) which upheld the decision of the asylum and immigration tribunal (Senior Immigration Judge Eshun) on February 8, 2008, to affirm the entry clearance officer’s decision to refuse them leave to enter the United Kingdom as the spouse and children of the sponsor.

The claimants were nationals of Afghanistan. ZN married the sponsor in Afghanistan in 1979. Their children were born between 1985 and 1998. The sponsor fled Afghanistan in order to seek international protection and arrived in the United Kingdom in 1999. He was granted indefinite leave to remain in the United Kingdom as a refugee in 2001 and his application for British citizenship was granted in 2005.

Mr Manjit Gill, QC, Mr Edward Nicholson and Ms Sophie Weller for the claimants; Miss Lisa Giovannetti and Miss Samantha Broadfoot for the entry clearance officer.

LORD CLARKE, giving the judgment of the court, said that the appeal raised a question on the true construction of the Statement of Changes in Immigration Rules (1994) (HC 395), as amended by the Statement of Changes in Immigration Rules (2002) (Cm 5597), as to what rules applied to family members seeking entry to the United Kingdom, where the sponsor had been granted asylum and had subsequently obtained British citizenship.

The entry clearance officer said that they must satisfy the ordinary rules dealing with applications by family members, notably rules 281 (spouses) and 297 (children).

The claimants contended that their cases fell to be considered under the rules dealing with applications to join relatives in this country who had been granted asylum here, notably rules 352A (spouses) and 352D (children).

The distinction was important to the claimants because a person entitled to apply under rules 352A or 352D did not have to meet the requirements concerning maintenance and accommodation imposed by rules 281 and 297.

The entry clearance officer pointed to the necessity under rule 352A for the applicant to be the spouse “of a refugee” and submitted that that indicated that he or she must be a refugee at the time of the application. The entry clearance officer further relied upon rule 352E, which referred to “the child of a refugee”.

The claimants, on the other hand, said that the opening words of rule 352A made it clear that the rule was identifying the requirements to be met by an applicant who “seeks leave to enter or remain in the United Kingdom as the spouse … of a refugee” and that the sub-paragraphs simply identified the criteria to be satisfied by the applicant.

The only relevant requirements, which were contained in sub-paragraphs (i) and (ii) respectively, were that the applicant must be married to a person “granted asylum” and that the marriage did not take place after “the person granted asylum” left his former habitual residence in order to seek asylum.

The claimants pointed to the fact that the rules did not say when the person must have been granted asylum. Nor did they say that such a person was not a refugee for that purpose once he or she became a British citizen.

The court regarded the construction advanced on behalf of the claimants as the more natural meaning of the words used. The grant of asylum was a specific event. That was underlined by the words of sub-paragraph (i) of rule 352A, which simply said that the applicant must be married to “a person granted asylum” and thus naturally referred to a particular historic event and not to an existing condition: see also sub-paragraph (ii).

As to policy, it might well be that it would be possible to produce a coherent policy argument for the view that applications for leave to enter or remain in the United Kingdom made by the spouse or children of those granted asylum should be dealt with under rules 352A and 352D until the other spouse or parent became a British citizen but that thereafter such applications should be dealt with under rules 281 and 297.

It could be said with force that all applications by a spouse or child to join or remain with a British citizen should be subject to the same rules.

On the other hand, there were coherent policy reasons for applying the same principles to applications to join or remain with a spouse or parent who had been granted asylum both before and after such a sponsor had become a British citizen.

An important factor in that regard was that one of the purposes of the Convention and Protocol Relating to the Status of Refugees (1951) (Cmd 9171) and (1967) (Cmnd 3096) was to protect and preserve the family unit of a refugee. The need for protection for a member of such a family unit was likely to be the same whether the sponsor obtained British citizenship or not.

Moreover, the risk of persecution might be such that the need for protection for family members was particularly stark.

The question was what policy was encapsulated in the rules, which was essentially a matter of construction of the language of the rules.

The court had reached a different conclusion from the Court of Appeal.

It agreed that the sponsor must have been granted asylum in order to be a “refugee”, “a person granted asylum” and “a person who has been granted asylum”.

However it did not agree that there was an additional requirement, namely that the “person granted asylum” or the “person who has been granted asylum” must not have become a British citizen before the application for entry clearance was made, or perhaps determined.

There was no express language to that effect and it was not implicit in the language used.

The fact that British citizenship had been granted to the spouse or parent did not change the fact that the spouse or parent was a person granted asylum or a person who had been granted asylum.

Solicitors: Fisher Meredith LLP, Kennington; Treasury Solicitor.

Council exceeded its purchase powers

From Times Online

May 13, 2010

Regina (Sainsbury’s Supermarkets Ltd) v Wolverhampton City Council

 

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Supreme Court

Published May 13, 2010

Before Lord Phillips of Worth Matravers, President, Lord Hope of Craighead, Deputy President, Lord Walker of Gestingthorpe, Baroness Hale of Richmond, Lord Brown of Eaton-under-Heywood, Lord Mance and Lord Collins of Mapesbury

Judgment May 12, 2010

A planning authority acted unlawfully in considering the exercise of its compulsory purchase powers by taking into account unconnected benefits which would result from the associated redevelopment of a site not within the proposed development.

The Supreme Court so held (Lord Phillips, Lord Hope and Lord Brown dissenting) in allowing the appeal of Sainsbury’s Supermarkets Ltd against the Court of Appeal (Lord Justice Ward, Lord Justice Mummery and Lord Justice Sullivan) (The Times August 21, 2009) upholding the disnissal by Mr Justice Elias ([2009] EWHC 134 (Admin)) of its application for judicial review of the decision of Wolverhampton City Council, on January 30, 2008, to give approval in principle to the making of a compulsory purchase order under section 226(1)(a) of the Town and Country Planning Act 1990, as substituted by section 99(2)(b) of the Planning and Compulsory Purchase Act 2004, in respect of land owned by Sainsbury’s.

Section 226(1)(a), as substituted, authorised the local authority to make a compulsory purchase order in respect of any land if it thought that the acquisition would facilitate the carrying out of development, redevelopment or improvement on or in relation to the land. Section 226(1A), as inserted by section 99(3) of the 2004 Act, provided that the local authority was not to exercise such power unless it thought that the development, redevelopment or improvement was likely to contribute to the achievement of any one or more of the following objects: the promotion or improvement of the economic, social or environmental well-being of its area.

Mr Christopher Lockhart-Mummery, QC, Mr Eian Caws and Mr Charles Banner for Sainsbury’s; Mr Neil King, QC and Mr Guy Williams for the council; Mr Christopher Katkowski, QC and Mr Scott Lyness for Tesco Stores Ltd, interested party.

LORD COLLINS said that the Raglan Street site was a semi-derelict site in Wolverhampton. Sainsbury’s owned or controlled 86 per cent of the site and Tesco controlled most of the remainder. They each wished to develop the site.

Tesco also controlled the Royal Hospital site, about 850 metres away, which had a number of listed buildings in poor condition. It had been an objective of the council to secure the regeneration of that site.

Tesco had offered to link its scheme for the Raglan Street site with the redevelopment of the Royal Hospital site, saying that that would amount to a subsidy at least equal to the loss it would sustain in carrying out the Royal Hospital site development.

The council approved in principle the making of a compulsory purchase order under section 226(1)(a) in respect of the land owned by Sainsbury’s at the Raglan Street site to facilitate a development of the site by Tesco. In resolving to make the order, the council took into account Tesco’s commitment to develop the Royal Hospital site.

The issues were whether:

1 On a proper construction of section 226(1A), the council was entitled to take into account a commitment by the developer of a site part of which was to be the subject of a purchase order to secure, by way of cross-subsidy, the development, redevelopment or improvement of another unconnected site and so achieve further wellbeing benefits for the area.

2 The council was entitled, in deciding whether and how to exercise its powers under section 226(1)(a) to take into account such a commitment by a developer.

In the planning context, the question of what was a material consideration was a question of law, but the weight to be given to it was a matter for the decision-maker: financial viability might be material if it related to the development; financial dependency of part of a composite development on another part might be a relevant consideration, in the sense that the fact that the proposed development would finance other relevant planning benefits might be material, and off-site benefits which were related to or were connected with the development would be material.

Given the similar context, there was no reason why similar principles should not apply to compulsory acquisition provided that it was recognised that, because of the serious invasion of proprietary rights involved in compulsory acquisition, a strict approach to the application of those principles was required. There must be a real, rather than a fanciful or remote connection between the off-site benefits and the development for which the compulsory acquisition was made.

The only connection between the proposed developments in the present case was in the sense that either (a) the council was being tempted to facilitate one development because it wanted another development; or (b) Tesco was being tempted to undertake one uncommercial development in order to obtain the development it wanted.

The power of compulsory acquisition had to be capable of being exercised under section 226(1)(a) before section 226(1A) applied.

The council was entitled to come to the view for the purposes of section 226(1A) that the Raglan Street development would contribute to wellbeing in its area, but not on the basis of the benefits which would derive from the Royal Hospital development. The Raglan Street development would not, in any legally relevant sense, contribute to the achievement of the well-being benefits flowing from the Royal Hospital development.

But the crucial question was whether the council was entitled to take it into account under section 226(1)(a).

The claimed financial connection between the two sites was not such as to amount to a relevant matter.

Accordingly, an order should be granted declaring that the opportunity for redevelopment of the Royal Hospital site was not a lawful consideration in deciding whether to make a compulsory purchase order in relation to the Raglan Street site.

Lord Walker, Lady Hale and Lord Mance gave concurring judgments.

LORD PHILLIPS, dissenting, said that the council’s decision involved the exercise of two statutory powers: the power of compulsory purchase conferred by section 226 and the power to sell the land compulsorily purchased conferred by section 233.

The Royal Hospital site benefit was not a consideration that was material to the decision to use the power of compulsory purchase, but it was very material to the decision which developer to select, and that in turn determined whose land was to be bought.

In those circumstances, the Royal Hospital site benefit was a consideration that was material to the decision that determined simultaneously the developer and the land to be purchased.

Lord Hope delivered a judgment concurring with Lord Phillips and Lord Brown one dissenting with both

Solicitors: CMS Cameron McKenna LLP; Wragge & Co, Birmingham; Ashurst LLP.

Determining fraud issue

From Times Online

May 11, 2010

Court of Appeal, Published May 10 2010, Noble v Owens, Before Lord Justice Sedley, Lady Justice Smith and Lord Justice Elias, Judgment March 10 2010

 

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Where the Court of Appeal received fresh evidence alleging that the judge below had been deliberately misled, the court would order a retrial only where the fraud was either admitted or the evidence of it was incontrovertible. In any other case, the fraud issue had to be determined in the High Court.

The Court of Appeal so stated when allowing, in part, the appeal of the defendant, Martin Raymond Owens, from a decision of Mr Justice Field ([2008] EWHC 359 (QB)) in personal injury proceedings brought by the claimant, Mark Noble, in which liability had been admitted, and the judge awarded damages of £3,397,766.49 including interest.

The defendant had not appealed but subsequently, relying upon film of the claimant walking about without the aid of crutches or a stick, he was granted an injunction restraining dissipation of £2.25 million already paid over and now appealed the award seeking a retrial.

Mr Andrew Hogarth, QC and Ms Catherine Peck for Mr Owens; Mr Clive Freedman, QC and Mr William Latimer-Sayer for Mr Noble.

LADY JUSTICE SMITH said that there was an irreconcilable conflict in the authorities as to whether a retrial could be ordered without a finding of fraud: see Ladd v Marshall ([1954] 1 WLR 1489), Roe v McGregor and Sons Ltd ([1968] 1 WLR 925) and Jonesco v Beard ([1930] AC 298.

However, the true principle, derived from Jonesco, was that, where fresh evidence was adduced in the Court of Appeal tending to show that the judge at first instance was deliberately misled, the court would only allow the appeal and order a retrial where the fraud was either admitted or the evidence of it was incontrovertible.

Otherwise the usual course should be to require that the issue of fraud be tried before the established judgment was set aside; although there might be exceptions to that general rule, as, for example, where there would be no injustice and there were good policy grounds for ordering a retrial.

The court referred the fraud issue to a High Court judge under 52.10(2)(b) of the Civil Procedure Rules.

Lord Justice Elias and Lord Justice Sedley gave concurring judgments.

Solicitors: Clarke Willmott LLP, Southampton; RWPS LLP, Poole

Outrageous abuse of executive power

From Times Online

May 11, 2010

Muuse v Secretary of State for the Home Department

 

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Court of Appeal

Published May 10 2010

Before Sir Andrew Morritt, Chancellor, Lord Justice Thomas and Sir Scott Baker

Judgment April 27 2010

In awarding exemplary damages in respect of oppressive, arbitrary or unconstitutional conduct by government officials, there was no need to consider further whether such outrageous conduct disclosed malice.

The Court of Appeal so held when:

(i) allowing the appeal of the defendant, the Secretary of State for the Home Department, from the decision of Mr John Leighton Williams, QC, ([2009] EWHC 1886 (QB)), sitting as a deputy High Court judge, that the unlawful detention of the claimant, Abdillaahi Muuse, had arisen from misfeasance in public office; but (ii) dismissing the Home Secretary’s appeal from an award of £27,500 exemplary damages in addition to £25,000 basic compensatory and £7,500 aggravated damages in respect of his junior officials’ reckless indifference to the probability of causing injury to the claimant.

The claimant was a Dutch national born in Somalia who had been unlawfully detained for 128 days on the orders of immigration officials pending deportation to Somalia or Holland in circumstances where there was no right to deport.

The judge found, inter alia, that insufficient, almost nothing had been done to verify his claims that he was Dutch, even though that could simply have been done by checking his property, that letters from his solicitors to the Prison Service and to the Immigration Directorate went unanswered and that, even when his nationality became known to those officials, it was a month before he was released.

Mr Tom Poole for the Home Secretary; Mr Stephen Knafler, QC and Mr Abdurahman Jafar for Mr Muuse.

LORD JUSTICE THOMAS said in order to establish misfeasance in public office, the claimant had to establish that those acting for the defendant had detained him (i) in the knowledge of, or with reckless indifference to the illegality of their actions; (ii) in the knowledge of, or with reckless indifference to, the probability of causing injury to him. It was common ground that the judge had made the second of those necessary findings. The first finding had to be of subjective, not objective, indifference.

The judge had not expressly made that finding although plainly there had been evidence on which he could have reached that conclusion. His Lordship could not conclude that the judge must have made it by necessary implication.

The defendant accepted that there did not need to be a finding of misfeasance in public office before an award of exemplary damages could be made, but contended that an award of exemplary damages in respect of oppressive, arbitrary or unconstitutional conduct should only be made where the conduct was “outrageous, disclosing malice, fraud, insolence and the like”: see McGregor on Damages (18th edition (2009), paragraph 11-019).

His Lordship said that the guidance given in AB v South West Water Services Ltd (The Times sub nom Gibbons v SW Water November 26, 1992; [1993] QB 507, 529, per Sir Thomas Bingham, Master of the Rolls) and in Kuddus v Chief Constable of Leicestershire (The Times June 13, 2001; [2002] AC 122, paragraph 89, per Lord Hutton) was sufficient.

There was no need for this to be qualified by further looking for malice or similar specific conduct. The outrageous nature of the conduct was exhibited partly by the way in which the junior officials treated the claimant and ignored his protests that he was Dutch, partly by the manifest incompetence in which they acted throughout and partly by their failure to take the most elementary steps to check his documents.

The unlawful imprisonment of the claimant was not merely unconstitutional but an arbitrary exercise of executive power which was outrageous.

Sir Scott Baker and the Chancellor delivered concurring judgments.

Solicitors: Treasury Solicitor; Pickup & Scott, Aylesbury.

Acts not for companies

From Times Online

May 11, 2010

Online Catering Ltd v Acton and Another

 

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Court of Appeal

Published May 11, 2010

Before Lord Justice Ward, Lady Justice Smith and Lord Justice Rimer

Judgment February 10, 2010

The bills of sale Acts did not apply to companies. Accordingly, a party would not succeed in establishing that a contract was unenforceable for want of registration under those Acts if the relevant contracting party was a company.

The Court of Appeal so stated when dismissing the appeal of Online Catering Ltd from the dismissal by Mr Recorder de la Piquerie, in Central London County Court on November 4, 2008, of its claim, for damages for wrongful interference with goods, brought against Frank Acton and Drakeglen Ltd, trading as Metropolitan Fleet Services.

Mr Ali Reza Sinai for Online; Mr Neil Mendoza for the defendants.

LORD JUSTICE WARD said that in determining the nature of the relevant contractual terms, regard was to be had to Read v Joannon ((1890) 25 QBD 300), In re Standard Manufacturing Co ([1891] 1 Ch 627), Great Northern Railway Co v Coal Co-Operative Society ([1896] 1 Ch 187), Clark v Balm Hill & Co ([1908] 1 KB 667) and Slavenburg’s Bank v Intercontinental Natural Resources Ltd ([1980] 1 WLR 1076).

Applying dicta of Mr Justice Phillimore in Clark (at pp669–670) and of Mr Justice Lloyd in Slavenburg’s Bank (at p1098) to the effect that the bills of sale Acts applied to individuals only and not to corporations, it followed, where the agreement had been entered into by a company, namely, the second defendant, that the charges relied on were not capable of being rendered void against the second defendant for lack of registration.

Lord Justice Rimer delivered a concurring judgment and Lady Justice Smith agreed with both.

Solicitors: Harper & Odell; Barlow Lyde & Gilbert.

Realities important in drafting indictment

From Times Online

May 11, 2010

Regina v N
Regina v D
Regina v L

 

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Court of Appeal, Criminal Division

Published May 11, 2010

Before Lord Judge, Lord Chief Justice, Mr Justice David Clarke and Mr Justice Lloyd Jones

Judgment April 22, 2010

The drafting of an indictment required close attention to the realities of the case and none at all to the theoretical legal possibilities which might arise. It also required careful attention to the criminality which had resulted in the case coming to trial, and to the evidence to support the allegation, the avoidance of duplication and the risk of unnecessary complications for both the jury and the judge and the ultimate wasting of scarce and valuable resources.

The Court of Appeal, Criminal Division, so held when dismissing an appeal by N against his conviction on August 5, 2009, at Inner London Crown Court (Judge Faber and a jury) of false imprisonment. He was also convicted of aiding and abetting rape but did not appeal against that conviction.

On February 13, 2009, L had pleaded guilty to one count each of attempted rape and aiding and abetting rape and D had pleaded guilty to three counts of rape.

D had raped the female complainant, who was a virgin aged 14, three times; L had tried unsuccessfully to rape her and had participated in one of the rapes committed by D. N had also aided and abetted the same rape by D.

Miss Helen McCormack, assigned by the Registrar of Criminal Appeals, for N; Miss Dafna Spiro, similarly assigned, for D; Miss Beth O’Reilly, similarly assigned, for L; Mr Mark Gadsden for the Crown.

THE LORD CHIEF JUSTICE, giving the judgment of the court, said that N appealed only against his conviction for false imprisonment.

Given that the jury was satisfied so that it was sure that the appellant had aided and abetted the rape of the girl by D while he held her so that the rape could take place, how, notwithstanding any possible misdirection, could his conviction for being involved in the false imprisonment of the girl be unsafe?

The count of false imprisonment was a makeweight and quite unnecessary. There might have been a theoretical basis for including the count in the indictment, but the reality was that any one of the three appellants involved in raping the girl, or in the rape by others of the girl, was party to her false imprisonment.

If that count had not been included in the indictment much work by counsel, the trial judge, the jury and the Court of Appeal, Criminal Division would have been unnecessary.

Solicitors: Crown Prosecution Service, Lewisham.

Enforcing US judgment

From The Times

May 7, 2010

NML Capital Ltd v Republic of Argentina

 

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Court of Appeal

Published May 7, 2010

Before Lord Justice Mummery, Lord Justice Aikens and Lord Justice Elias

Judgment February 4, 2010

An English Court had no jurisdiction to enforce a United States court judgment since there was no treaty between the two countries for the mutual recognition and enforcement of judgments; the appropriate way was to bring an action on the judgment in England to enforce it.

The Court of Appeal so stated in allowing the appeal of the defendant, the Republic of Argentina, from the refusal by Mr Justice Blair (The Times February 12, 2009; [2009] QB 579) to set aside an order made by Mr Justice David Steel on April 2, 2008, granting the claimant, NML Capital Ltd, permission to serve a claim form and particulars of claim on the defendant out of the jurisdiction, on the basis that there was no legal impediment to the claimant bringing the action to enforce a New York judgment debt under the default clause of certain foreign currency bonds.

Mr Anthony Trace QC, Mr Benjamin John and Mr Ciaran Keller for Argentina; Mr Jonathan Nash, QC and Mr Peter Ratcliffe for NML.

LORD JUSTICE AIKENS said that a judgment creditor of a United States judgment who wished to enforce it in England should bring an action on the foreign judgment in the English courts. There was no treaty between the United States and Great Britain for the mutual recognition and enforcement of judgments. If judgment was obtained, then it would be the English judgment that could then be enforced in England.

There had never been any specific rule of court or civil procedure rule that permitted the issue and service out of the jurisdiction of all types of claims against foreign states. Moreover, section 12(1) of the State Immunity Act 1978 required service of proceedings on the state out of the jurisdiction.

It was also accepted that, at the stage when a party sought permission to issue and serve proceedings out of the jurisdiction on a sovereign state, a court had to be satisfied that there was, at least, a good arguable case that the state concerned was not absolutely immune from suit in respect of the proposed proceedings.

Therefore, in the absence of any obvious evidence that the defendant had agreed to submit to the jurisdiction of the English courts, NML was bound to put before the court the factual and legal basis on which it said that there was, at the least, a good arguable case that the defendant was not immune from suit in the English court in respect of the proposed action on the New York judgment.

If the court did not have that information, then it would be bound, by section 1(2) of the 1978 Act, to give effect to the defendant’s immunity as set out in section 1(1).

In the absence of that information, the court could not sanction the transmission of the documents initiating the proceedings to the Foreign and Commonwealth Office for onward transmission to the Ministry of Foreign Affairs of the state concerned.

Lord Justice Elias and Lord Justice Mummery agreed.

Solicitors: Travers Smith LLP; Dechert LLP.