Datasets:

MHGanainy

/

multi_clustering

like 0

Case C-303/06 S. Coleman v Attridge Law and Steve Law (Reference for a preliminary ruling from the Employment Tribunal, London South) (Social policy − Directive 2000/78/EC − Equal treatment in employment and occupation − Articles 1, 2(1), (2)(a) and (3) and 3(1)(c) − Direct discrimination on grounds of disability − Harassment related to disability − Dismissal of an employee who is not himself disabled but whose child is disabled − Included − Burden of proof) Summary of the Judgment 1. Social policy – Equal treatment in employment and occupation – Directive 2000/78 – Prohibition of discrimination on grounds of disability – Scope (Council Directive 2000/78, Arts 1 and 2(1) and (2)(a)) 2. Social policy – Equal treatment in employment and occupation – Directive 2000/78 – Prohibition of harassment – Scope (Council Directive 2000/78, Arts 1 and 2(1) and (3)) 1. Directive 2000/78 establishing a general framework for equal treatment in employment and occupation, and, in particular, Articles 1 and 2(1) and (2)(a) thereof, must be interpreted as meaning that the prohibition of direct discrimination laid down by those provisions is not limited only to people who are themselves disabled. The principle of equal treatment enshrined in that directive in the area of employment and occupation applies not to a particular category of person but by reference to the grounds mentioned in Article 1. Where an employer treats an employee who is not himself disabled less favourably than another employee is, has been or would be treated in a comparable situation, and it is established that the less favourable treatment of that employee is based on the disability of his child, whose care is provided primarily by that employee, such treatment is contrary to the prohibition of direct discrimination laid down by Article 2(2)(a) of Directive 2000/78. (see paras 38, 50, 56, operative part 1) 2. Directive 2000/78 establishing a general framework for equal treatment in employment and occupation, and, in particular, Articles 1 and 2(1) and (3) thereof, must be interpreted as meaning that the prohibition of harassment laid down by those provisions is not limited only to people who are themselves disabled. Under Article 2(3), harassment is deemed to be a form of discrimination within the meaning of Article 2(1) and the principle of equal treatment enshrined in that directive in the area of employment and occupation applies not to a particular category of person but by reference to the grounds mentioned in Article 1. Where it is established that the unwanted conduct amounting to harassment which is suffered by an employee who is not himself disabled is related to the disability of his child, whose care is provided primarily by that employee, such conduct is contrary to the prohibition of harassment laid down by Article 2(3) of Directive 2000/78. (see paras 38, 58, 63, operative part 2) JUDGMENT OF THE COURT (Grand Chamber) 17 July 2008 (*) (Social policy − Directive 2000/78/EC − Equal treatment in employment and occupation − Articles 1, 2(1), (2)(a) and (3) and 3(1)(c) − Direct discrimination on grounds of disability − Harassment related to disability − Dismissal of an employee who is not himself disabled but whose child is disabled − Included − Burden of proof) In Case C‑303/06, REFERENCE for a preliminary ruling under Article 234 EC from the Employment Tribunal, London South (United Kingdom), made by decision of 6 July 2006, received at the Court on 10 July 2006, in the proceedings S. Coleman v Attridge Law and Steve Law, THE COURT (Grand Chamber), composed of V. Skouris, President, P. Jann, C.W.A. Timmermans, A. Rosas, K. Lenaerts and A. Tizzano, Presidents of Chambers, M. Ilešič, J. Klučka, A. Ó Caoimh (Rapporteur), T. von Danwitz and A. Arabadjiev, Judges, Advocate General: M. Poiares Maduro, Registrar: L. Hewlett, Principal Administrator, having regard to the written procedure and further to the hearing on 9 October 2007, after considering the observations submitted on behalf of: – Ms Coleman, by R. Allen QC and P. Michell, Barrister, – the United Kingdom Government, by V. Jackson, acting as Agent, and N. Paines QC, – the Greek Government, by K. Georgiadis and Z. Chatzipavlou, acting as Agents, – Ireland, by N. Travers, BL, – the Italian Government, by I.M. Braguglia, acting as Agent, and W. Ferrante, avvocato dello Stato, – the Lithuanian Government, by D. Kriaučiūnas, acting as Agent, – the Netherlands Government, by H.G. Sevenster and C. ten Dam, acting as Agents, – the Swedish Government, by A. Falk, acting as Agent, – the Commission of the European Communities, by J. Enegren and N. Yerrell, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 31 January 2008, gives the following Judgment 1 This reference for a preliminary ruling concerns the interpretation of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ 2000 L 303, p. 16). 2 The reference was made in the course of proceedings between Ms Coleman, the claimant in the main proceedings, and Attridge Law, a firm of solicitors, and Mr Law, a partner in that firm (together, the ‘former employer’), concerning Ms Coleman’s claim of constructive dismissal. Legal context Community legislation 3 Directive 2000/78 was adopted on the basis of Article 13 EC. Recitals 6, 11, 16, 17, 20, 27, 31 and 37 in the preamble to the directive are worded as follows: ‘(6) The Community Charter of the Fundamental Social Rights of Workers recognises the importance of combating every form of discrimination, including the need to take appropriate action for the social and economic integration of elderly and disabled people. … (11) Discrimination based on religion or belief, disability, age or sexual orientation may undermine the achievement of the objectives of the EC Treaty, in particular the attainment of a high level of employment and social protection, raising the standard of living and the quality of life, economic and social cohesion and solidarity, and the free movement of persons. … (16) The provision of measures to accommodate the needs of disabled people at the workplace plays an important role in combating discrimination on grounds of disability. (17) This Directive does not require the recruitment, promotion, maintenance in employment or training of an individual who is not competent, capable and available to perform the essential functions of the post concerned or to undergo the relevant training, without prejudice to the obligation to provide reasonable accommodation for people with disabilities. … (20) Appropriate measures should be provided, i.e. effective and practical measures to adapt the workplace to the disability, for example adapting premises and equipment, patterns of working time, the distribution of tasks or the provision of training or integration resources. … (27) In its Recommendation 86/379/EEC of 24 July 1986 on the employment of disabled people in the Community [OJ 1986 L 225, p. 43], the Council established a guideline framework setting out examples of positive action to promote the employment and training of disabled people, and in its Resolution of 17 June 1999 on equal employment opportunities for people with disabilities [OJ 1999 C 186, p. 3], affirmed the importance of giving specific attention inter alia to recruitment, retention, training and lifelong learning with regard to disabled persons. … (31) The rules on the burden of proof must be adapted when there is a prima facie case of discrimination and, for the principle of equal treatment to be applied effectively, the burden of proof must shift back to the respondent when evidence of such discrimination is brought. However, it is not for the respondent to prove that the plaintiff adheres to a particular religion or belief, has a particular disability, is of a particular age or has a particular sexual orientation. … (37) In accordance with the principle of subsidiarity set out in Article 5 of the EC Treaty, the objective of this Directive, namely the creation within the Community of a level playing field as regards equality in employment and occupation, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and impact of the action, be better achieved at Community level. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.’ 4 Article 1 of Directive 2000/78 states that ‘[t]he purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment’. 5 Article 2(1) to (3) of the directive, headed ‘Concept of discrimination’, states: ‘1. For the purposes of this Directive, the “principle of equal treatment” shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1. 2. For the purposes of paragraph 1: (a) direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1; (b) indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons having a particular religion or belief, a particular disability, a particular age, or a particular sexual orientation at a particular disadvantage compared with other persons unless: (i) that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary, or (ii) as regards persons with a particular disability, the employer or any person or organisation to whom this Directive applies is obliged, under national legislation, to take appropriate measures in line with the principles contained in Article 5 in order to eliminate disadvantages entailed by such provision, criterion or practice. 3. Harassment shall be deemed to be a form of discrimination within the meaning of paragraph 1, when unwanted conduct related to any of the grounds referred to in Article 1 takes place with the purpose or effect of violating the dignity of a person and of creating an intimidating, hostile, degrading, humiliating or offensive environment. In this context, the concept of harassment may be defined in accordance with the national laws and practice of the Member States. …’ 6 Article 3(1) of Directive 2000/78 provides: ‘Within the limits of the areas of competence conferred on the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to: … (c) employment and working conditions, including dismissals and pay; …’ 7 Article 5 of Directive 2000/78, headed ‘Reasonable accommodation for disabled persons’, provides: ‘In order to guarantee compliance with the principle of equal treatment in relation to persons with disabilities, reasonable accommodation shall be provided. This means that employers shall take appropriate measures, where needed in a particular case, to enable a person with a disability to have access to, participate in, or advance in employment, or to undergo training, unless such measures would impose a disproportionate burden on the employer. …’ 8 Article 7 of Directive 2000/78, headed ‘Positive action’, is worded as follows: ‘1. With a view to ensuring full equality in practice, the principle of equal treatment shall not prevent any Member State from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to any of the grounds referred to in Article 1. 2. With regard to disabled persons, the principle of equal treatment shall be without prejudice to the right of Member States to maintain or adopt provisions on the protection of health and safety at work or to measures aimed at creating or maintaining provisions or facilities for safeguarding or promoting their integration into the working environment.’ 9 Article 10 of Directive 2000/78, headed ‘Burden of proof’, provides: ‘1. Member States shall take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment. 2. Paragraph 1 shall not prevent Member States from introducing rules of evidence which are more favourable to plaintiffs.’ 10 In accordance with the first paragraph of Article 18 of Directive 2000/78, Member States were required to adopt the laws, regulations and administrative provisions necessary to comply with that directive by 2 December 2003 at the latest. Nevertheless, the second paragraph of Article 18 states: ‘In order to take account of particular conditions, Member States may, if necessary, have an additional period of three years from 2 December 2003, that is to say a total of six years, to implement the provisions of this Directive on age and disability discrimination. In that event they shall inform the Commission forthwith. Any Member State which chooses to use this additional period shall report annually to the Commission on the steps it is taking to tackle age and disability discrimination and on the progress it is making towards implementation. The Commission shall report annually to the Council.’ 11 As the United Kingdom of Great Britain and Northern Ireland requested such an additional period for the implementation of the directive, that period did not expire until 2 December 2006 as regards that Member State. National legislation 12 The Disability Discrimination Act 1995 (‘the DDA’) essentially aims to make it unlawful to discriminate against disabled persons in connection, inter alia, with employment. 13 Part 2 of the DDA, which regulates the employment field, was amended, on the transposition of Directive 2000/78 into United Kingdom law, by the Disability Discrimination Act 1995 (Amendment) Regulations 2003, which came into force on 1 October 2004. 14 According to section 3A(1) of the DDA, as amended by those 2003 Regulations (‘the DDA as amended in 2003’): ‘… a person discriminates against a disabled person if – (a) for a reason which relates to the disabled person’s disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply, and (b) he cannot show that the treatment in question is justified.’ 15 Section 3A(4) of the DDA as amended in 2003 none the less specifies that the treatment of a disabled person cannot be justified if it amounts to direct discrimination falling within section 3A(5), according to which: ‘A person directly discriminates against a disabled person if, on the ground of the disabled person’s disability, he treats the disabled person less favourably than he treats or would treat a person not having that particular disability whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person.’ 16 Harassment is defined in section 3B of the DDA as amended in 2003 as follows: ‘(1) ... a person subjects a disabled person to harassment where, for a reason which relates to the disabled person’s disability, he engages in unwanted conduct which has the purpose or effect of – (a) violating the disabled person’s dignity, or (b) creating an intimidating, hostile, degrading, humiliating or offensive environment for him. (2) Conduct shall be regarded as having the effect referred to in paragraph (a) or (b) of subsection (1) only if, having regard to all the circumstances, including in particular the perception of the disabled person, it should reasonably be considered as having that effect.’ 17 Under section 4(2)(d) of the DDA as amended in 2003, it is unlawful for an employer to discriminate against a disabled person whom he employs by dismissing him or by subjecting him to any other detriment. 18 Section 4(3)(a) and (b) of the DDA as amended in 2003 provides that it is also unlawful for an employer, in relation to employment by him, to subject to harassment a disabled person whom he employs or a disabled person who has applied to him for employment. The dispute in the main proceedings and the questions referred for a preliminary ruling 19 Ms Coleman worked for her former employer as a legal secretary from January 2001. 20 In 2002, she gave birth to a son who suffers from apnoeic attacks and congenital laryngomalacia and bronchomalacia. Her son’s condition requires specialised and particular care. The claimant in the main proceedings is his primary carer. 21 On 4 March 2005, Ms Coleman accepted voluntary redundancy, which brought her contract of employment with her former employer to an end. 22 On 30 August 2005, she lodged a claim with the Employment Tribunal, London South, alleging that she had been subject to unfair constructive dismissal and had been treated less favourably than other employees because she was the primary carer of a disabled child. She claims that that treatment caused her to stop working for her former employer. 23 The order for reference states that the material facts of the case in the main proceedings have not yet been fully established, since the questions referred for a preliminary ruling arose only as a preliminary issue. The referring tribunal stayed that part of the action concerning Ms Coleman’s dismissal, but held a preliminary hearing on 17 February 2006 to consider the discrimination plea. 24 The preliminary issue raised before that tribunal is whether the claimant in the main proceedings can base her application on national law, in particular those provisions designed to transpose Directive 2000/78, in order to plead discrimination against her former employer on the ground that she was subjected to less favourable treatment connected with her son’s disability. 25 It is apparent from the order for reference that, should the Court’s interpretation of Directive 2000/78 contradict that put forward by Ms Coleman, her application to the referring tribunal could not succeed under national law. 26 It is also apparent from the order for reference that, under United Kingdom law, where there is a preliminary hearing on a point of law, the court or tribunal hearing the case assumes that the facts are as related by the claimant. In the main proceedings, the facts of the dispute are assumed to be as follows: – On Ms Coleman’s return from maternity leave, her former employer refused to allow her to return to her existing job, in circumstances where the parents of non-disabled children would have been allowed to take up their former posts; – her former employer also refused to allow her the same flexibility as regards her working hours and the same working conditions as those of her colleagues who are parents of non-disabled children; – Ms Coleman was described as ‘lazy’ when she requested time off to care for her child, whereas parents of non-disabled children were allowed time off; – the formal grievance which she lodged against her ill treatment was not dealt with properly and she felt constrained to withdraw it; – abusive and insulting comments were made about both her and her child. No such comments were made when other employees had to ask for time off or a degree of flexibility in order to look after non-disabled children; and – having occasionally arrived late at the office because of problems related to her son’s condition, she was told that she would be dismissed if she came to work late again. No such threat was made in the case of other employees with non-disabled children who were late for similar reasons. 27 Since the Employment Tribunal, London South, considered that the case before it raised questions of interpretation of Community law, it decided to stay the proceedings and refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) In the context of the prohibition of discrimination on grounds of disability, does [Directive 2000/78] only protect from direct discrimination and harassment persons who are themselves disabled? (2) If the answer to Question (1) above is in the negative, does [Directive 2000/78] protect employees who, though they are not themselves disabled, are treated less favourably or harassed on the ground of their association with a person who is disabled? (3) Where an employer treats an employee less favourably than he treats or would treat other employees, and it is established that the ground for the treatment of the employee is that the employee has a disabled son for whom the employee cares, is that treatment direct discrimination in breach of the principle of equal treatment established by [Directive 2000/78]? (4) Where an employer harasses an employee, and it is established that the ground for the treatment of the employee is that the employee has a disabled son for whom the employee cares, is that harassment a breach of the principle of equal treatment established by [Directive 2000/78]?’ Admissibility 28 While accepting that the questions put by the referring tribunal are based on an actual dispute, the Netherlands Government called into question the admissibility of the reference for a preliminary ruling on the basis that, given that these are preliminary questions raised at a preliminary hearing, all the facts at issue have not yet been established. It points out that, for the purposes of such a preliminary hearing, the national court or tribunal presumes that the facts are as related by the claimant. 29 It must be borne in mind that Article 234 EC establishes the framework for a relationship of close cooperation between the national courts or tribunals and the Court of Justice based on the assignment to each of different functions. It is clear from the second paragraph of that article that it is for the national court or tribunal to decide at what stage in the proceedings it is appropriate for that court or tribunal to refer a question to the Court of Justice for a preliminary ruling (see Joined Cases 36/80 and 71/80 Irish Creamery Milk Suppliers Association and Others [1981] ECR 735, paragraph 5, and Case C‑236/98 JämO [2000] ECR I‑2189, paragraph 30). 30 In the case in the main proceedings, the referring tribunal found that, if the Court of Justice should decide not to interpret Directive 2000/78 in accordance with Ms Coleman’s submissions, her case would fail in the material respects. The referring tribunal therefore decided, as permitted under United Kingdom legislation, to consider whether that directive must be interpreted as being applicable to the dismissal of an employee in Ms Coleman’s situation, before establishing whether, in fact, Ms Coleman did suffer less favourable treatment or harassment. It is for that reason that the questions referred for a preliminary ruling were based on the presumption that the facts of the dispute in the main proceedings are as summarised in paragraph 26 of this judgment. 31 Where, as here, the Court receives a request for interpretation of Community law which is not manifestly unrelated to the reality or the subject-matter of the main proceedings and it has the necessary information in order to give appropriate answers to the questions put to it in relation to the applicability of Directive 2000/78 to those proceedings, it must reply to that request and is not required to consider the facts as presumed by the referring court or tribunal, a presumption which it is for the referring court or tribunal to verify subsequently if that should prove to be necessary (see, to that effect, Case C‑127/92 Enderby [1993] ECR I‑5535, paragraph 12). 32 In those circumstances, the request for a preliminary ruling must be held to be admissible. The questions referred for a preliminary ruling The first part of Question 1, and Questions 2 and 3 33 By these questions, which should be examined together, the referring tribunal asks, in essence, whether Directive 2000/78, and, in particular, Articles 1 and 2(1) and (2)(a), must be interpreted as prohibiting direct discrimination on grounds of disability only in respect of an employee who is himself disabled, or whether the principle of equal treatment and the prohibition of direct discrimination apply equally to an employee who is not himself disabled but who, as in the present case, is treated less favourably by reason of the disability of his child, for whom he is the primary provider of the care required by virtue of the child’s condition. 34 Article 1 of Directive 2000/78 identifies its purpose as being to lay down, as regards employment and occupation, a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation. 35 Article 2(1) of Directive 2000/78 defines the principle of equal treatment as meaning that there is to be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1, including, therefore, disability. 36 According to Article 2(2)(a), direct discrimination is to be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on the grounds, inter alia, of disability. 37 Article 3(1)(c) of Directive 2000/78 provides that the directive is to apply, within the limits of the areas of competence conferred on the Community, to all persons, as regards both the public and private sectors, including public bodies, in relation to employment and working conditions, including dismissals and pay. 38 Consequently, it does not follow from those provisions of Directive 2000/78 that the principle of equal treatment which it is designed to safeguard is limited to people who themselves have a disability within the meaning of the directive. On the contrary, the purpose of the directive, as regards employment and occupation, is to combat all forms of discrimination on grounds of disability. The principle of equal treatment enshrined in the directive in that area applies not to a particular category of person but by reference to the grounds mentioned in Article 1. That interpretation is supported by the wording of Article 13 EC, which constitutes the legal basis of Directive 2000/78, and which confers on the Community the competence to take appropriate action to combat discrimination based, inter alia, on disability. 39 It is true that Directive 2000/78 includes a number of provisions which, as is apparent from their very wording, apply only to disabled people. Thus, Article 5 provides that, in order to guarantee compliance with the principle of equal treatment in relation to persons with disabilities, reasonable accommodation is to be provided. This means that employers must take appropriate measures, where needed in a particular case, to enable a person with a disability to have access to, participate in, or advance in employment, or to undergo training, unless such measures would impose a disproportionate burden on the employer. 40 Article 7(2) of Directive 2000/78 also provides that, with regard to disabled persons, the principle of equal treatment is to be without prejudice either to the right of Member States to maintain or adopt provisions on the protection of health and safety at work or to measures aimed at creating or maintaining provisions or facilities for safeguarding or promoting the integration of such persons into the working environment. 41 The United Kingdom, Greek, Italian and Netherlands Governments contend, in the light of the provisions referred to in the two preceding paragraphs and also of recitals 16, 17 and 27 in the preamble to Directive 2000/78, that the prohibition of direct discrimination laid down by the directive cannot be interpreted as covering a situation such as that of the claimant in the main proceedings, since the claimant herself is not disabled. Only persons who, in a comparable situation to that of others, are treated less favourably or are placed in a disadvantageous situation because of characteristics which are particular to them can rely on that directive. 42 Nevertheless, it must be noted in that regard that the provisions referred to in paragraphs 39 and 40 of this judgment relate specifically to disabled persons either because they are provisions concerning positive discrimination measures in favour of disabled persons themselves or because they are specific measures which would be rendered meaningless or could prove to be disproportionate if they were not limited to disabled persons only. Thus, as recitals 16 and 20 in the preamble to Directive 2000/78 indicate, the measures in question are intended to accommodate the needs of disabled people at the workplace and to adapt the workplace to their disability. Such measures are therefore designed specifically to facilitate and promote the integration of disabled people into the working environment and, for that reason, can only relate to disabled people and to the obligations incumbent on their employers and, where appropriate, on the Member States with regard to disabled people. 43 Therefore, the fact that Directive 2000/78 includes provisions designed to accommodate specifically the needs of disabled people does not lead to the conclusion that the principle of equal treatment enshrined in that directive must be interpreted strictly, that is, as prohibiting only direct discrimination on grounds of disability and relating exclusively to disabled people. Furthermore, recital 6 in the preamble to the directive, concerning the Community Charter of the Fundamental Social Rights of Workers, refers both to the general combating of every form of discrimination and to the need to take appropriate action for the social and economic integration of disabled people. 44 The United Kingdom, Italian and Netherlands Governments also contend that it follows from the judgment in Case C‑13/05 Chacón Navas [2006] ECR I‑6467 that the scope ratione personae of Directive 2000/78 must be interpreted strictly. According to the Italian Government, in Chacón Navas, the Court opted for a strict interpretation of the concept of disability and its implications in an employment relationship. 45 The Court defined the concept of ‘disability’ in its judgment in Chacón Navas and, in paragraphs 51 and 52 of that judgment, it found that the prohibition, as regards dismissal, of discrimination on grounds of disability contained in Articles 2(1) and 3(1)(c) of Directive 2000/78 precludes dismissal on grounds of disability which, in the light of the obligation to provide reasonable accommodation for people with disabilities, is not justified by the fact that the person concerned is not competent, capable and available to perform the essential functions of his post. However, it does not follow from this interpretation that the principle of equal treatment defined in Article 2(1) of that directive and the prohibition of direct discrimination laid down by Article 2(2)(a) cannot apply to a situation such as that in the present case, where the less favourable treatment which an employee claims to have suffered is on grounds of the disability of his child, for whom he is the primary provider of the care required by virtue of the child’s condition. 46 Although the Court explained in paragraph 56 of the judgment in Chacón Navas that, in view of the wording of Article 13 EC, the scope of Directive 2000/78 cannot be extended beyond the discrimination based on the grounds listed exhaustively in Article 1 of the directive, with the result that a person who has been dismissed by his employer solely on account of sickness cannot fall within the scope of the general framework established by Directive 2000/78, it nevertheless did not hold that the principle of equal treatment and the scope ratione personae of that directive must be interpreted strictly with regard to those grounds. 47 So far as the objectives of Directive 2000/78 are concerned, as is apparent from paragraphs 34 and 38 of the present judgment, the directive seeks to lay down, as regards employment and occupation, a general framework for combating discrimination on one of the grounds referred to in Article 1 – including, in particular, disability – with a view to putting into effect in the Member States the principle of equal treatment. It follows from recital 37 in the preamble to the directive that it also has the objective of creating within the Community a level playing field as regards equality in employment and occupation. 48 As Ms Coleman, the Lithuanian and Swedish Governments and the Commission maintain, those objectives, and the effectiveness of Directive 2000/78, would be undermined if an employee in the claimant’s situation cannot rely on the prohibition of direct discrimination laid down by Article 2(2)(a) of that directive where it has been established that he has been treated less favourably than another employee is, has been or would be treated in a comparable situation, on the grounds of his child’s disability, and this is the case even though that employee is not himself disabled. 49 In that regard, it follows from recital 11 in the preamble to the directive that the Community legislature also took the view that discrimination based on religion or belief, disability, age or sexual orientation may undermine the achievement of the objectives of the Treaty, in particular, as regards employment. 50 Although, in a situation such as that in the present case, the person who is subject to direct discrimination on grounds of disability is not herself disabled, the fact remains that it is the disability which, according to Ms Coleman, is the ground for the less favourable treatment which she claims to have suffered. As is apparent from paragraph 38 of this judgment, Directive 2000/78, which seeks to combat all forms of discrimination on grounds of disability in the field of employment and occupation, applies not to a particular category of person but by reference to the grounds mentioned in Article 1. 51 Where it is established that an employee in a situation such as that in the present case suffers direct discrimination on grounds of disability, an interpretation of Directive 2000/78 limiting its application only to people who are themselves disabled is liable to deprive that directive of an important element of its effectiveness and to reduce the protection which it is intended to guarantee. 52 As to the burden of proof which applies in a situation such as that in the present case, it should be observed that, under Article 10(1) of Directive 2000/78, Member States are required to take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it is for the respondent to prove that there has been no breach of that principle. According to Article 10(2), Article 10(1) does not prevent Member States from introducing rules on the burden of proof which are more favourable to plaintiffs. 53 In the case before the referring tribunal, it is therefore for Ms Coleman, in accordance with Article 10(1) of Directive 2000/78, to establish, before that tribunal, facts from which it may be presumed that there has been direct discrimination on grounds of disability contrary to the directive. 54 In accordance with Article 10(1) of Directive 2000/78 and recital 31 in the preamble thereto, the rules on the burden of proof must be adapted when there is a prima facie case of discrimination. In the event that Ms Coleman establishes facts from which it may be presumed that there has been direct discrimination, the effective application of the principle of equal treatment then requires that the burden of proof should fall on the respondents, who must prove that there has been no breach of that principle. 55 In that context, the respondents could contest the existence of such a breach by establishing by any legally permissible means, in particular, that the employee’s treatment was justified by objective factors unrelated to any discrimination on grounds of disability and to any association which that employee has with a disabled person. 56 In the light of the foregoing considerations, the answer to the first part of Question 1 and to Questions 2 and 3 must be that Directive 2000/78, and, in particular, Articles 1 and 2(1) and (2)(a) thereof, must be interpreted as meaning that the prohibition of direct discrimination laid down by those provisions is not limited only to people who are themselves disabled. Where an employer treats an employee who is not himself disabled less favourably than another employee is, has been or would be treated in a comparable situation, and it is established that the less favourable treatment of that employee is based on the disability of his child, whose care is provided primarily by that employee, such treatment is contrary to the prohibition of direct discrimination laid down by Article 2(2)(a). The second part of Question 1, and Question 4 57 By these questions, which should be examined together, the referring tribunal asks, in essence, whether Directive 2000/78, and, in particular, Articles 1 and 2(1) and (3) thereof, must be interpreted as prohibiting harassment related to disability only in respect of an employee who is himself disabled, or whether the prohibition of harassment applies equally to an employee who is not himself disabled but who, as in the present case, is the victim of unwanted conduct amounting to harassment related to the disability of his child, for whom he is the primary provider of the care required by virtue of the child’s condition. 58 Since, under Article 2(3) of Directive 2000/78, harassment is deemed to be a form of discrimination within the meaning of Article 2(1), it must be held that, for the same reasons as those set out in paragraphs 34 to 51 of this judgment, that directive, and, in particular, Articles 1 and 2(1) and (3) thereof, must be interpreted as not being limited to the prohibition of harassment of people who are themselves disabled. 59 Where it is established that the unwanted conduct amounting to harassment which is suffered by an employee who is not himself disabled is related to the disability of his child, whose care is provided primarily by that employee, such conduct is contrary to the principle of equal treatment enshrined in Directive 2000/78 and, in particular, to the prohibition of harassment laid down by Article 2(3) thereof. 60 In that regard, it must nevertheless be borne in mind that, according to the actual wording of Article 2(3) of the directive, the concept of harassment may be defined in accordance with the national laws and practice of the Member States. 61 With regard to the burden of proof which applies in situations such as that in the main proceedings, it must be observed that, since harassment is deemed to be a form of discrimination within the meaning of Article 2(1) of Directive 2000/78, the same rules apply to harassment as those set out in paragraphs 52 to 55 of this judgment. 62 Consequently, as is apparent from paragraph 54 of this judgment, in accordance with Article 10(1) of Directive 2000/78 and recital 31 in the preamble thereto, the rules on the burden of proof must be adapted when there is a prima facie case of discrimination. In the event that Ms Coleman establishes facts from which it may be presumed that there has been harassment, the effective application of the principle of equal treatment then requires that the burden of proof should fall on the respondents, who must prove that there has been no harassment in the circumstances of the present case. 63 In the light of the foregoing considerations, the answer to the second part of Question 1 and to Question 4 must be that Directive 2000/78, and, in particular, Articles 1 and 2(1) and (3) thereof, must be interpreted as meaning that the prohibition of harassment laid down by those provisions is not limited only to people who are themselves disabled. Where it is established that the unwanted conduct amounting to harassment which is suffered by an employee who is not himself disabled is related to the disability of his child, whose care is provided primarily by that employee, such conduct is contrary to the prohibition of harassment laid down by Article 2(3). Costs 64 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Grand Chamber) hereby rules: 1. Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation, and, in particular, Articles 1 and 2(1) and (2)(a) thereof, must be interpreted as meaning that the prohibition of direct discrimination laid down by those provisions is not limited only to people who are themselves disabled. Where an employer treats an employee who is not himself disabled less favourably than another employee is, has been or would be treated in a comparable situation, and it is established that the less favourable treatment of that employee is based on the disability of his child, whose care is provided primarily by that employee, such treatment is contrary to the prohibition of direct discrimination laid down by Article 2(2)(a). 2. Directive 2000/78, and, in particular, Articles 1 and 2(1) and (3) thereof, must be interpreted as meaning that the prohibition of harassment laid down by those provisions is not limited only to people who are themselves disabled. Where it is established that the unwanted conduct amounting to harassment which is suffered by an employee who is not himself disabled is related to the disability of his child, whose care is provided primarily by that employee, such conduct is contrary to the prohibition of harassment laid down by Article 2(3). [Signatures] * Language of the case: English.

Judgment of the Court (Sixth Chamber) of 18 April 1989. - François Retter v Caisse de pension des employés privés. - Reference for a preliminary ruling: Cour de cassation - Grand Duchy of Luxemburg. - Transfer of officials' pensions rights to the Community scheme. - Case 130/87. European Court reports 1989 Page 00865 Summary Parties Grounds Decision on costs Operative part Keywords ++++ 1 . Officials - Staff Regulations of Officials of the ECSC - Consequence in law 2 . Officials - Pensions - Pension rights acquired before entering the service of the Communities - Transfer to the Community scheme - Member States' obligations - Adoption of measures necessary for the transfer - National legislation excluding both transfer and maintenance of rights - Not applicable ( Staff Regulations of Officials of the ECSC, Annex VIII, Art . 11(2 ) ) Summary 1 . The unity of the three Communities in regard to their Staff Regulations would be compromised if, by reason of the circumstances in which the Staff Regulations of Officials of the ECSC were adopted in 1962, among which is the fact that they were never published in the Official Journal, those regulations were of lesser consequence in law than the Staff Regulations of Officials of the EEC and the EAEC, thereby depriving the staff of the ECSC of rights and opportunities granted to other European officials . Such a breach of the principle of equality would be incompatible with the fundamental principles of Community law . 2 . Article 11(2 ) of Annex VIII to the Staff Regulations of Officials of the ECSC requires the Member States to adopt all the measures necessary for its implementation and therefore precluded, from its entry into force on 1 January 1962, the application of national legislation under which a Community official, who had been affiliated to the social security scheme of that Member State, was obliged to surrender definitively the pension rights which he had previously acquired under the national scheme in return for the surrender value of those pension rights limited to his own contributions, without having the option of maintaining those pension rights or having them transferred to the Community scheme . Parties In Case 130/87 REFERENCE to the Court under Article 177 of the EEC Treaty by the Cour de cassation of the Grand Duchy of Luxembourg for a preliminary ruling in the action pending before that court between Franssois Retter, an official of the Commission, residing in Brussels, and Caisse de pensionps des employés privés ( Pension fund for private employees ), Luxembourg on the interpretation of Article 11(2 ) of Annex VIII to the Staff Regulations of Officials of the European Communities, THE COURT ( Sixth Chamber ) composed of : T . Koopmans, President of Chamber, G . F . Mancini, C . N . Kakouris, F . A . Schockweiler and M . Díez de Velasco, Judges, Advocate General : M . Darmon Registrar : D . Louterman, Administrator, and H . A . Ruehl, Principal Administrator, after the reopening of the oral procedure, after considering the observations submitted on behalf of F . Retter, by G . Margue, avocat, the Caisse de pension des employés privés, by F . Entringer, avocat, the Luxembourg Government, by G . Schroeder, acting as Agent, the United Kingdom, by S . J . Hay, of the Treasury Solicitor' s Department, acting as Agent, the Commission of the European Communities, by H . Étienne, acting as Agent, having regard to the Report for the Hearing and further to the hearings on 3 May and 15 December 1988, after hearing the Opinion of the Advocate General delivered at the sitting on 5 July 1988 and, following the reopening of the oral procedure, at the sitting on 24 January 1989, gives the following Judgment Grounds 1 By judgment of 9 April 1987, which was received at the Court on 21 April 1987, the Cour de cassation ( Court of Cassation ) of the Grand Duchy of Luxembourg referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 11(2 ) of Annex VIII to the Staff Regulations of Officials of the European Communities . 2 That question arose in proceedings between François Retter, a Commission official, the plaintiff in the main proceedings, and the Caisse de pension des employés privés ( Pension fund for private employees ), Luxembourg, the defendant in the main proceedings ( hereinafter referred to as "the Fund "). 3 Before being established on 5 February 1962 as an official of the High Authority of the ECSC, Mr Retter was employed in the private sector in Luxembourg and acquired pension rights with the Fund on the basis of 61 months of contributions . On 1 April 1964, he requested the Fund to reimburse him half of all the contributions standing to his credit, which amounted at that time to LFR 58 538 . As a result of that request, he received the sum of LFR 29 269 . 4 The Luxembourg legislation in force in 1964 did not provide for the possibility of transferring to the Community pension scheme of pension rights acquired under the national scheme . The provisions of that legislation provided only for repayment of pension rights to insured persons who, after having paid contributions for at least 30 months, definitively left the Luxembourg insurance scheme without receiving a pension . According to the provisions of the same legislation, the application for repayment had to be submitted within two years from the date on which the insured person ceased to be a member of the Luxembourg social insurance scheme and an insured person whose contributions had been repaid in that manner no longer had any right to benefits from the Fund . 5 Following the adoption of the Law of 14 March 1979 amending the Luxembourg legislation in order to permit persons who had become officials of the Communities to transfer their pension rights as provided for under the Staff Regulations of Officials, the plaintiff applied to the Fund on 4 February 1983 to annul the arrangement which had taken place in 1964 and to revive his pension rights, in return for which he would repay, with interest, the amount paid to him in 1964 . That application was refused by the Fund on 15 March 1983 on the ground that, according to Article 65 of the Law of 1979, persons who had obtained repayment of pension rights were deemed to have lost any right to benefits from the Fund and could not therefore take advantage of the new rules which had been adopted . 6 The dispute was brought before the courts having jurisdiction in the matter and the Cour de cassation ultimately decided to stay proceedings until the Court of Justice had given a preliminary ruling on the following question : "Is Article 11(2 ) of Annex VIII to the Staff Regulations of Officials and Other Servants of the European Communities to be interpreted as meaning that from its entry into force on 1 January 1962 it conferred on ECSC officials a direct right to have their pension rights transferred from a national pension scheme to the Community pension scheme, subject to the conditions set out in the aforesaid Article 11(2 ), and may that Community provision therefore be considered to have been integrated as from 1 January 1962, so far as the right to call for such a transfer is concerned, into national legislation on pension schemes and in particular into the ancillary legislation on the coordination of different pension schemes?" 7 Reference is made to the Report for the Hearing for a fuller account of the facts in the main proceedings, the national and Community provisions at issue, the course of the procedure and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court . 8 It should be emphasized at the outset that the dispute which is the subject of the main proceedings originated in an arrangement concerning the repayment of pension rights made by the Fund to Mr Retter in 1964 . At that time, the plaintiff was an official of the High Authority of the ECSC and, as such, was subject to the provisions of the regulation laying down Staff Regulations of Officials and the Conditions of Employment of Other Servants of the Community, adopted by the Committee of Presidents of the ECSC and which entered into force on 1 January 1962 . The interpretation sought by the national court thus refers to the Staff Regulations of Officials of the ECSC . 9 Article 11(2 ) of Annex VIII to the said Staff Regulations of 1962 corresponds to Article 11(2 ) of Annex VIII to the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community, laid down by Regulations Nos 31 ( EEC ) and 11 ( EAEC ) of the Councils of 18 December 1961 ( Journal officiel 1962, 45, p . 1385 ) which also entered into force on 1 January 1962 . All of those provisions were carried over in identical terms into Article 11(2 ) of Annex VIII to Regulation ( EEC, Euratom, ECSC ) No 259/68 of the Council of 29 February 1968 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities and instituting special measures temporarily applicable to officials of the Commission ( Official Journal, English Special Edition 1968 ( I ), p . 30 ). 10 Unlike the Staff Regulations of Officials of the EEC and the EAEC, the Staff Regulations of Officials of the ECSC were never published in the Official Journal . Any consequences that might flow from that fact have been the subject of observations by the parties when the oral procedure was reopened by order of the Court ( Sixth Chamber ), after hearing the Advocate General, on 4 October 1988 . 11 In order to determine whether Article 11(2 ) of Annex VIII to the Staff Regulations of Officials of the ECSC granted officials of that Community a right to transfer their pension rights acquired under a national scheme to the corresponding Community scheme, with effect from the entry into force of those regulations on 1 January 1962, it must be considered whether that provision has effects such that it may be relied on as against the legislation of a Member State which, at the material time, excluded not merely a transfer of pension rights but also a maintenance of those rights under the national scheme . In order to provide the national court with a helpful reply, the legal context in which the Staff Regulations of Officials of the ECSC of 1962 was adopted and the scope of the measures concerning the Community civil service adopted by the Committee of Presidents must be considered . 12 In regard to the context in which the Staff Regulations of Officials of the ECSC was adopted, it should be pointed out that under Article 78(3 ) of the ECSC Treaty and the third paragraph of Article 7 of the Convention on the Transitional Provisions provided for in Article 85 of the said Treaty, the power to lay down the Staff Regulations of Officials was granted to the committee composed, under the presidency of the President of the Court of Justice, of the Presidents of the High Authority, the Common Assembly and the Special Council of Ministers . Unlike the third paragraph of Article 15 of the ECSC Treaty, that provision does not provide that measures adopted by that committee take effect only when published . 13 In the context of the ECSC Treaty, the attribution to the Committee of Presidents of rule-making powers implied the possibility of creating rights in favour of individuals . The existence of such rights, granted in the interest of the functioning and independence of the Community administration, was pointed out by the Court in its judgment of 16 December 1980 in Case 6/60 Humblet v Belgium (( 1960 )) ECR 559 . It can be seen from that judgment, in which the Court specified the Member States' obligations under the Protocol on the Privileges and Immunities of the European Coal and Steel Community, annexed to the ECSC Treaty, that the Community legal order may create individual rights in favour of officials in matters related to their status upon which they may rely against the authorities of the Member States . 14 In that regard, it should be noted that the regulations laid down by the Committee of Presidents contain, in addition to rules governing conditions of service, provisions concerning the relationship of officials with the social security authorities of the Member State in which they were previously affiliated . 15 With regard to the legal nature of the rules under those regulations, it should be pointed out, as the Court held in its judgment of 20 October 1981 in Case 137/80 Commission v Belgium (( 1981 )) ECR 2393, that the possibility of transferring pension rights is intended to produce legal effects vis-à-vis the Member States . Article 11(2 ) of Annex VIII to the Staff Regulations is intended to ensure that Community officials may retain the rights which they have acquired in their own State even though they may be limited, or even conditional or future, or insufficient to give rise to the immediate award of a pension, and that account may be taken of those rights by the pension scheme to which the persons concerned are affiliated at the end of their careers, in this case the Community scheme . 16 The purpose of the preparatory work carried out by the Councils of the EEC and the EAEC and the Committee of Presidents of the ECSC in 1961 concerning the drawing-up of new regulations for the staff of the Community administration was to lay down a set of uniform rules . The minutes of the meetings of the Committee of Presidents reveal close cooperation between that body and the Councils . In the context of those consultations, the Staff Regulations of Officials of the ECSC served as a model for the EEC and EAEC Councils . 17 Having regard to that legislative context, it should be pointed out that the unity of the three Communities in regard to their Staff Regulations, pointed out in the judgment of 15 July 1960 in Joined Cases 27 and 39/59 Campolongo v High Authority (( 1960 )) ECR 391, would be compromised if the Staff Regulations of Officials of the ECSC were of a lesser consequence in law than the Staff Regulations of Officials of the EEC and the EAEC, thereby depriving the staff of the ECSC of rights and opportunities granted to other European officials . Such a breach of the principle of equality would be incompatible with the fundamental principles of Community law . 18 That unity in the matter of staff regulations, notwithstanding the diversity of the procedures by which the various authorities adopted them and the rules concerning their publication, finds confirmation in Article 83(3 ) of the three sets of Staff Regulations of Officials which entered into force on 1 January 1962 . According to that provision, the procedure for calculation of the pensions of officials of the European Coal and Steel Community and the apportionment of the cost of such pensions between the European Coal and Steel Community pension fund and the budgets of the European Economic Community and the European Atomic Energy Community were to be settled by a regulation made by agreement between the Councils and the Committee of Presidents of the ECSC . That procedure was laid down, with effect retroactively to 1 January 1962, in Regulations Nos 5/63/EAEC and 100/63/EEC of 10 July 1963 ( Journal officiel 130, p . 2301 ) the recitals in the preambles to which refer to the Staff Regulations of Officials of the three Communities . In the same legislative context, the Councils of the EEC and the EAEC and the Committee of Presidents of the ECSC adopted a decision of 10 July 1963 designating the institution responsible for paying the benefits provided for under the pension scheme ( Journal officiel 130, p . 2303 ) without drawing any distinction between the three sets of Staff Regulations of Officials . 19 It should be added that after the entry into force of the three sets of Staff Regulations, the European Assembly, during a debate on a proposal from the Councils concerning a regulation amending Article 109 of the Staff Regulations of Officials of the EEC and the EAEC, adopted a resolution calling upon the Committee of Presidents of the ECSC also to amend the Staff Regulations of Officials of that Community ( Journal officiel 1962, 116, p . 2673 ). The Committee of Presidents gave effect to that resolution by amending the same provision in the Staff Regulations of Officials of the ECSC . 20 It should also be pointed out that the existence of Staff Regulations for Officials of the ECSC was also confirmed by the Rules of Procedure of the Court in regard to disputes covered by Article 58 of the Staff Regulations of Officials of the ECSC of 21 February 1957 ( Journal officiel 8, p . 110 ) and by the General Regulation on the organization of the services of the High Authority of 20 April 1960 ( Journal officiel 30, p . 747 ) the second paragraph of Article 6 of which refers to the Staff Regulations of Officials of the ECSC . 21 It follows from the foregoing considerations that the circumstances in which the Staff Regulations of Officials of the ECSC were adopted in 1962 cannot have the effect of depriving the provisions of those regulations of the legal effects indicated above, which are identical to those of the Staff Regulations of Officials of the other Communities . 22 Under those circumstances, and having regard to the provisions of the national legislation at issue in the main proceedings, it must be held, as the Court emphasized in its judgment of 20 October 1981, cited above, that Article 11(2 ) of Annex VIII to the Staff Regulations requires the Member States to adopt all the measures necessary for its implementation and therefore precludes the application of national legislation which does not permit the transfer of pension rights and amounts to depriving officials of a right granted to them by the Staff Regulations . 23 The reply to the question referred to the Court by the Cour de cassation of the Grand Duchy of Luxembourg must therefore be that Article 11(2 ) of Annex VIII to the Staff Regulations of Officials of the ECSC must be interpreted as precluding, from its entry into force on 1 January 1962, the application of national legislation under which a Community official, who had been affiliated to the social security scheme of that Member State, was obliged to surrender definitively the pension rights which he had previously acquired under the national scheme in return for the surrender value of those pension rights limited to his own contributions, without having the option of maintaining those pension rights or having them transferred to the Community scheme . Decision on costs Costs 24 The costs incurred by the Government of the Grand Duchy of Luxembourg, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable . Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court . Operative part On those grounds, THE COURT ( Sixth Chamber ), in answer to the question referred to it by the Cour de cassation of the Grand Duchy of Luxembourg, by judgment of 9 April 1987, hereby rules : Article 11(2 ) of Annex VIII to the Staff Regulations of Officials of the ECSC must be interpreted as precluding, from its entry into force on 1 January 1962, the application of national legislation whereby a Community official, who had been affiliated to the social security scheme of the Member State, was obliged to surrender definitively the pension rights which he had previously acquired under the national scheme in return for the surrender value of those pension rights limited to his own contributions, without having the option of maintaining those pension rights or having them transferred to the Community scheme .

OPINION OF MR ADVOCATE-GENERAL GAND DELIVERED ON 6 MAY 1965 ( ) Mr President, Members of the Court, Mr Alfred Willame, a French national, who had taken part in union activity and who was from 1950 a member of the French Economic and Social Council, entered the service of the EAEC on 18 August 1958. He was assigned in Grade A3 to the Directorate of Health and Safety as head of the division dealing with social problems and documentation. From November 1958 he was involved in the formation of a Euratom staff association; he was elected by his colleagues to the original Joint Committee (comité mixte) and thereafter sat on both the provisional Staff Committee and the present Joint Committee (commission paritaire). On the opening of the integration procedure on 13 April 1962 his immediate superior, Dr Recht, made the following assessment of him: on the occasions on which he had actually (been engaged on the work of the Directorate he showed neither the knowledge nor the abilities needed to deal with the tasks allotted to him and this in an area in which only properly conceived, positive action, performed in a spirit of initiative and with steadfastness was capable of producing results. It must be added here that the Vice-President of Euratom, Mr Medi, made the following note on this report: ‘Above opinion not agreed, particularly as regards the very severe strictures on certain points. After integration it will be advisable to reorganize the duties of the post’. On 18 December 1962, having received this report the Establishment Board heard Dr Recht who, after describing the post held by the applicant, made a detailed criticism of the way in which he performed his duties. On 8 February 1963, the Board heard both Mr Willame and the colleague who was assisting him. It received from both ‘parties’ documents to which I shall refer later and on 19 February issued a seasoned report indicating that Mr Willame was not fitted to perform the duties to which he was assigned; the Board added, however, that the appointing authority should consider his establishment in the grade immediately below. On 3 April 1963 the applicant was informed verbally of the intention of the Commission of Euratom not to integrate him and on 8 May, together with several of his colleagues; he demanded a review of the integration procedure; this was refused and he was so informed on 30 May. Some rather confused discussions took place with a view to giving him a new contract as a temporary servant; these were suspended, reopened and finally completely broken off. Eventually, on 2 October 1963 Mr Willame was informed that, following the unfavourable opinion of the Establishment Board, the Commission had decided to terminate his contract. In the main he is asking you to annul the decisions contained in this letter refusing him integration and terminating his contract, as well as the measures taken in support of these decisions, to order his integration in Grade A3, Step 4, with retroactive effect and to order the Community to pay him arrears of remuneration together with Bfrs 150000 as compensation for the non-material damage which he has suffered. He also presents a subsidiary plea, the object of which is, as I understand it, the reopening of the integration procedure and an order chat the defendant pay him his salary from the date on which he gave up his duties until a valid, new decision is taken. As yet a further subsidiary plea, should the contested decisions not be annulled, he increases his claims for damages to Bfrs 1500000 for the material damage and Bfrs 150000 for the non-material damage. You will have to rule on two submissions: first, the regularity of the procedure and, secondly, the accuracy of the reason given by the Establishment Board on which the decision of the Commission of the EAEC was based. I shall examine them in turn. A — Regularity of the procedure Although the complaints, certain of which were already set out in the official claim, are numerous they are by no means all of equal weight. 1. You will immediately set aside the complaint based on the fact that contrary to Article 110 of the Staff Regulations no general provision for giving effect to these Regulations had been drawn up for the integration procedure after consulting the Staff Committee and the Staff Regulations Committee. You have in fact held that this Article does not apply to this essentially transitional procedure (Case 26/63, Pistoj, Rec. 1964, p. 696).You will also set aside the criticism or finding that, although the consequences of this procedure may be more serious than those in disciplinary proceedings, it contains fewer safeguards; for example, the Board did not include a staff representative. Mr Willame here refers to both the former EAEC Staff Regulations and the Staff Regulations of the Brussels Communities. To do so is, however, to confuse the position of members of the staff who, by reason of their establishment, benefit from steady employment and security of tenure, with that of servants who are not yet integrated. In entrusting consideration of the case of the latter to a Board composed only of representatives of the official side, Article 102 of the Staff Regulations has infringed neither the Treaty nor any general principle of law. In addition these criticisms, which in fact go to the very root of the integration procedure, there are others which deal with the way in which this procedure was applied. Although it is formally disputed by the Commission, Mr Willame considers that each institution drew up its establishment reports in a different manner and that, in the absence of definite criteria, there was no uniformity in the standards of reporting. However, what else could the administration do but lay down a sufficiently detailed framework within which reporting officials are required to assess the various aspects of the personality of the servant? If in spite of that it is inevitable that some report more generously than others, it is reasonable to leave the Establishment Board to strike a balance between them. 2. More serious are the complaints concerning the consideration of Mr Willame's case by the Board. Mr Willame maintains that although the Board was made up of nine members it sometimes sat with only eight of them present although it is nowhere authorized to hold its discussions in the absence of one or more of its constituent officials. An examination of the minutes in fact shows that Mr Guazzugli Marini was not present at certain meetings, in particular, that on 19 February 1963 during which the opinion on the case of Mr Willame was issued by the eight members present. But this in no way constitutes any irregularity. In the absence of a rule fixing the majority required to give an opinion you have held that a simple majority was sufficient (judgment in the ase of Weighardt of 7 April 1965, Rec. 1965, p. 365) and we know that the majority was ample in this case. In particular, the applicant maintains that the Board infringed the rights of the defence in several ways: it did not allow him the necessary time in which to prepare for his hearing; it made its decision on the basis of an incomplete file by issuing its opinion without having been able to examine important documents which the applicant had said that he had produced; it did not consider the documents to which he referred in order to show his ability to perform his duties. The latter point is certainly the most delicate and the one which leaves an unsavoury taste. Let me reconstruct the time-sequence of the case as far as this is possible. On 5 February 1963 Mr Willame was advised that he would be heard by the Board on 8 February. Only on 7 February was he invited to study the 36 documents running to some 150 pages which had been produced by Dr Recht which, he claims, covered only part of his professional career and could therefore only be usefully considered when complete. At the beginning of his hearing on 8 February he expresses a willingness to offer his observations while making a reservation on this point. Today he claims that this period was too short to enable him to prepare his defence since only during the meeting was he informed of what was held against him. To this the administration replies in defence that the documents produced by Dr Recht were memoranda drafted by the applicant who was thus in a position to acquaint himself with them rapidly. This reply is not entirely convincing for two reasons. First, the documents in question, on which Dr Recht no doubt intended to base his case for Mr Willame's inadequacy, were some what ill-assorted and it was difficult for Mr Willame to realize the effiect that they were to have on the development of the procedure; secondly, certain of these documents bore critical annotations by Dr Recht and the applicant needed time in which to acquaint himself with them and where possible to refute them. The least one can say is that for this purpose the period of 24 hours was rather short. At his hearing the applicant was informed by the Chairman of the Board that he might submit to the Board any documents which he considered would help his case; on 12 February Mr Willame submitted three documents and on the following 8 May, despite the fact that the unfavourable opinion had already been given on 19 February, he submitted 85 other documents running to 450 pages, by which he claimed to prove his ability and the various tasks which he had undertaken. The applicant emphasizes that as he had been given no time-limit in which to produce these documents the Board could not give its report without examining them. This is a doubtful point. The documents sent on 12 February, addressed to the Chairman of the Board, were submitted in order to complete his file and naturally the administration relies on this term. As regards the massive bundle sent on 8 May, this was addressed to the Director-General of Administration on the very day on which the applicant lodged a complaint through official channels against the opinion of the Board, of which he had been unofficially aware for a month. The explanation given here is that, in reply to a request for fuller information from you, Euratom maintained that since these documents were not addressed to the Establishment Board there was no obligation on the body to examine them. This is quite feasible but it would be more convincing if in the rejoinder the institution had not claimed that the documents in question had actually been examined by the Establishment Board. What conclusion must finally be drawn from that? Contrary to the allegation of the applicant, although he had indicated in writing on 7 February that the file was incomplete as regards his career, he had not at that point given notice of the production of ‘numerous documents’ and in the light of the terms in which the submission of the documents was made on 12 February, the Establishment Board was justified in believing them to be the final ones and in closing the proceedings. It had the power to reopen the proceedings as long as the Commission of Euratom had made no definite decision, but it was under no obligation to do so. Moreover, the fact that at his hearing Mr Willame had referred to the weekly news-sheets prepared under his direction and to the welfare card-index started by him did not oblige the Board to obtain these documents; it was up to the applicant to produce them if he considered it useful so to do. Final complaint: after hearing Dr Recht, the author of an unfavourable report, the Board did not feel obliged to hear Vice-President Medi who had indicated in writing his disagreement with the detailed assessments contained therein. Although (his may be regrettable it does not constitute a procedural defect or an infringement of the rights of the defence. Finally, and I repeat, the procedure followed in the inquiry before the Establishment Board leaves an unsavoury taste, but nowhere can I find a clear procedural defect; I am thus unable to consider this submission to be justified. 3. The complaint then refers to events occurring after the opinion of the Establishment Board was issued. Mr Willame complains that he was only informed of this opinion on 3 April 1963 when he was notified of the decision of dismissal. This is quite normal, since the opinion was addressed to the Commission of Euratom and had only to be communicated to the applicant with the decision of that body. Moreover, notification was incomplete as it made no mention of his possible integration in the lower grade. According to Article 102, although it is for the Establishment Board to assess the applicant's suitability or otherwise to perform the duties to which he is assigned, and although its unfavourable opinion is binding on the Commission of Euratom, it is the latter which has sole power to state whether, in such a case, integration may take place in a lower grade. The Staff Regulations make no provision for an opinion of the Establishment Board on this point; it appears that if such an opinion is given, the adrdessee is not bound to communicate it to the servant concerned. It is therefore unreasonable to claim that the decision to dismiss him is vitiated by an absence of reasons or by inaccurate reasons because it does not reproduce the final paragraph of the opinion of the Establishment Board. B — Correctness of the reason given by the Board The decision is based on the unfavourable opinion issued according to Article 102 and binding on the appointing authority. Mr Willame's second submission thus contests the opinion of the consultative body. You are aware of the terms of this opinion. The Commission maintains, first, that although by their nature the duties of the candidate as staff representative do not fall within its area of judgment the detrimental effect necessarily implied by this plurality of offices as regards his output in the post must be taken into account in his favour. Then, after acknowledging that he had ‘some capacity for dealing with social problems’, the Commission criticizes the applicant for certain failings as regards his ability, bis sense of initiative and responsibility and his capacity to carry out in depth the work undertaken; it is on this point that the Board bases its opinion that he was unsuited to perform the duties of head of division. Mr Willame's criticism of this opinion, the reasons for which he considers inaccurate, insufficient and inappropriate, is based on two points. 1. First, he maintains that, although since 1959 he had played an important rôle in staff organizations, the Commission had taken no account of the importance and quality of this work on the pretext that it fell outside its area of judgment. In this way it had infringed Article 1 of Annex II to the Staff Regulations. At the least it should have inquired into the length of time which he was able to devote to the work of the Directorate of Health and Safety in order to examine, taking everything into account, the actual output of the applicant in his administrative post. Moreover, the Board should have taken these activities into account in order to assess his ability and conduct in the service. Mr Willame appears to misjudge the scope of Article 1 of Annex II to the Staff Regulations. Where this Article provides that: ‘The duties undertaken by members of the Staff Committee … shall be deemed to be part of their normal service in their institution’, this means that they are exempt within reason from carrying out what would normally be their work within the administration; in the performance of these duties, the members of the Staff Committee are entirely independent of their superiors who have no power to assess the manner in which their subordinates represent the interests of the staff. Any other solution could only be detrimental to the independence of the organizations representing the staff. This reasoning applies also to the Establishment Board. It wisely declared that it had no authority to judge the manner in which Mr Willame performed his duties as staff representative and restricted its assessment to the abilities he showed in the post he held in the Directorate of Health and Safety. And it correctly applies Article 1 of Annex II in stating that, although this plurality of offices necessarily involved a reduction in his output, the applicant could not be criticized on those grounds. In my opinion, therefore, this first criticism must be set aside. 2. Mr Willame also disputes the Board's assessment of his abilities. It is clear from what I have said above that we are dealing with one of the fairly frequent integration cases in which the dispute is not over one or more precise facts but over a lack of character or intellectual powers, or merely a failure on the part of the candidate to adapt himself to the duties involved, which renders him unsuited to the post held. It is usually said that the Board is required to make a complex value-judgment of the servant. In order to refute the Board's judgment of him, Mr Willame points out that his work had never been the subject of any unfavourable assessments; the extremely critical report made by Dr Recht and his change of attitude can only be explained by the fact that in 1961 in his capacity as staff representative the applicant was obliged to take up a position in opposition to his superior. From this developed an animosity which was known to the authorities of the institution and which is shown by a personal letter which the applicant produces. Euratom formally disputes the involvement of the Staff Association in the difference of opinion to which Mr Willame refers and maintains that from the beginning Dr Recht had shown his dissatisfaction with the applicant's shortcomings. The two documents referred to by the institution in support of this argument are unconvincing in that in November 1961 Mr Recht had denied that a departmental reorganization affecting Mr Willame represented a measure penalizing misconduct in the performance of his duties. On the contrary, it is clear from numerous documents which Dr Recht submitted to the Board that although his dissatisfaction scarcely revealed itself he had no high opinion of his immediate colleague. Moreover, whatever the relationship between director and head of division, the only question before us concerns the accuracy and relevance of the opinion of the Establishment Board and I have no alternative but to find that there is nothing in the file to contradict it. It is not that the applicant was lacking in intellectual qualities apart from his acknowledged capacity for dealing with social problems. But he does not possess those required to perform the duties of head of division in an administrative unit. You will read this file composed of many different documents and no doubt you will form the impression, as I did, that the error lay in entrusting to a man with a gift for public relations and for disseminating information duties which consisted of gathering statistics on the risk of radiation drawing up a programme of professional training or analysing regulations on the compensation of workers exposed to the risk of radiation. Dr Recht gave to the Board a detailed statement of the shortcomings of his colleague and the 450 pages of documents produced by Mr Willame—which were not before the Board but which appear in your file—do not counter the criticisms made of him. Finally, no evidence has been produced to upset the opinion of the Establishment Board and Mr Willame is therefore wrong in maintaining that the decision to dismiss him is based upon an inadequate and mistaken reason. Thus his claim that the decision should be annulled can only be dismissed. It is true that, apart from the decisions the legality of which is in question, he also claims that Euratom incurred liability for wrongful acts or omissions occurring during the discussions between the parties held after the Establishment Board issued its unfavourable opinion. These discussions were held with a view to granting him a temporary contract but, as we know, they came to nothing. The parties disagree over the circumstances in which they took place and the responsibility for their failure. This, however, is not important. Mr Willame could not be integrated and Euratom was entitled to dismiss him as soon as the Board issued its opinion. These discussions, although fruitless, only delayed his dismissal and thus caused him no harm. I am therefore of the opinion that: — the application brought by Mr Willame should be dismissed; — in accordance with Article 70 of the Rules of Procedure each party should bear its own costs. ( ) Translated from the French.

Judgment of the General Court (Second Chamber) of 25 October 2012 — IDT Biologika v Commission (Case T-503/10) Public supply contracts — Call for tenders — Supply in Serbia of rabies vaccines — Rejection of a submitted tender — Award of the contract to another tenderer 1. EU public contracts — Conclusion of a contract following a call for tenders — Discretion of the institutions — Judicial review — Limits (Council Regulation No 1605/2002; Commission Regulation No 2342/2002) (see paras 19, 20) 2. EU public contracts — Tender procedure — Duty to comply with the principles of equal treatment of tenderers and transparency (Council Regulation No 1605/2002, Arts 89(1) and 168) (see para. 51) Re: APPLICATION for annulment of the decision dated 10 August 2010 of the European Union delegation in the Republic of Serbia (OJ 2010/S 192-293332) awarding the contract in the call for tenders EuropeAid/129809/C/SUP/RS for the supply of rabies vaccines for vaccination campaigns in Serbia to the consortium directed by the company Bioveta a.s. and rejecting the tender submitted by the applicant. Operative part The Court: 1. Dismisses the action; 2. Orders IDT Biologika GmbH to pay the costs.

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 322 of 1987. From the Judgment and Order dated 19.1.1987 of the Bombay High Court in Criminal Writ Petition No. 103 of 1986. Hardev Singh and Ms. Madhu Moolchandani for the Appellant. A. Masodkar, A.S. Bhasme and A.M. Khanwilkarforthe Respondent. The Judgment of the Court was delivered by SEN, J. This appeal by special leave is directed against the judgment and order of the High Court of Bombay dated January 19, 1987 rejecting the petition under Art. 226 of the Constitution filed by the appellant in the High Court for grant of a writ of habeas companypus. The appellant has been placed under detention by the impugned order dated September 7, 1986 passed by the District Magistrate, Beed under s. 3 2 of the National Security Act, 1980 on his being satisfied that it was necessary to do so with a view to preventing him from acting in any manner prejudicial to the maintenance of public order. The appellant challenged the impugned order of detention on grounds inter alia that there was infraction of the companystitutional safeguards enshrined in Art. 22 5 read with s. 8 of the Act inasmuch as there was inordinate, unexplained delay on the part of the detaining authority to companysider and dispose of his representation. On the view that we take, it is number necessary to deal with the facts elaborately. The material facts are these. The appellant was taken into custody on September 8, 1986 and was lodged at the Aurangabad Central Prison, Aurangabad where he is number detained. He was served with the grounds of detention along with the companyies of the relevant documents on September 14, 1986. It appears that a week thereafter i.e. on September 22, 1986 he addressed a representation to the Chief Minister through the Superintendent, Aurangabad Central Prison, Aurangabad which the Superintendent forwarded to the Home Department on September 24, 1986. The State Government, in the meanwhile, under s. 3 4 of the Act accorded its approval to the impugned order of detention on September 18, 1986. On October 6, 1986 the appellant made another representation to the Advisory Board which met and companysidered the same on October 8, 1986. On October 13, 1986 the Advisory Board after companysidering the representation made by the appellant together with the materials placed before it forwarded its report to the State Government recommending companyfirmation of the impugned order of detention as there was, in its opinion, sufficient cause for the detention of the appellant. Acting upon the report of the Advisory Board, the State Government by its order dated November 19, 1986 companyfirmed the order of detention. In the meantime, the appellant moved the High Court on November 13, 1986. The main ground on which the legality of the impugned order of detention was assailed in the High Court was that although the appellant had addressed a representation to the Chief Minister on September 22. 1986, it was number companysidered and disposed of by the Chief Minister till November 17, 1986 i.e. there was unexplained, unreasonable delay in disposal of the same. It was said that such unreasonable delay in disposal of the representation was sufficient to render the companytinued detention of the appellant illegal. The High Court did number think it necessary to call upon the respondents and by an oral judgment dismissed the writ petition mainly on the ground of imperfect pleadings. It observed that the appellant had number specifically pleaded that there was unreasonable delay in the office of the Chief Minister which had number been explained and therefore the detention was illegal, but his grievance was that his representation had number been companysidered. It referred to paragraph 4 of the writ petition where it is submitted It is submitted that in law, the State Government is bound to companysider the representation before the decision of the Advisory Board, but in the instant case neither the State Government has companysidered the representation of the petitioner number the Government has companymunicated its decision. It referred to the underlined portion of the averments in paragraph 4 of the writ petition, namely Eight weeks have elapsed since the date of detention of the petitioner but still neither the State Government has taken any decision on the representation forwarded through the Home Department number the petitioner is companymunicated any decision pursuant to the report The High Court distinguished the decision of this Court in Harish Pahwa v. State of Uttar Pradesh Ors., 1981 3 SCR 276 on the ground that in that case the Court had before it the affidavit of the Government showing that it had numberexplanation to offer except that it had referred the matter to the Law Department and also there was sufficient material to show that there was unreasonable delay in dealing with the representation whereas in the present case there was numbersuch ground raised. The High Court disallowed the prayer for grant of a writ of habeas companypus mainly on the ground of defective pleadings, and added that the appellant had number even asked for time to amend the petition and put the respondents to numberice. It observed While the State undoubtedly has the duty to process the representation of the detenu promptly, it is also the duty of the petitioner to make specific adverments of facts and their effect, if necessary, by amendment. This is necessary to put the respondents to numberice, that the effect of these facts have to be answered and explained. The respondents may have an explanation as to why the Chief Minister took so much time. On such submission we cannot hold that the respondents have failed to explain delay or that the time taken by the Chief Minister was wholly necessary. We should number be understood to have held that the time taken by the Government was justified. Far from it. But we cannot allow the petitioner to take the respondents by surprise by such a style of pleading. It was an improper exercise of power on the part of the High Court in disallowing the writ petition on the ground of imperfect pleadings. Normally, writ petitions are decided on the basis of affidavits and the petitioner cannot be permitted to raise grounds number taken in the petition at the hearing. The same rule cannot be applied to a petition for grant of a writ of habseas companypus. It is enough for the detenu to say that he is under wrongful detention, and the burden lies on the detaining authority to satisfy the Court that the detention is number illegal or wrongful and that the petitioner is number entitled to the relief claimed. This Court on more occasions than one has dealt with the question and it is number well-settled that it is incumbent on the State to satisfy the Court that the detention of the petitioner detenu was legal and in companyformity number only with the mandatory provisions of the Act but also strictly in accord with the companystitutional safeguards embodied in Art. 22 5 . In return to a rule nisi issued by this Court or the High Court in a habeas companypus petition, the proper person to file the same is the District Magistrate who had passed the impugned order of detention and he must explain his subjective satisfaction and the grounds therefore and if for some good reason the District Magistrate is number available, the affidavit must be sworn by some responsible officer like the Secretary or the Deputy Secretary to the Government in the Home Department who personally dealt with or processed the case in the Secretariat or submitted it to the Minister or other Officer duly authorised under the Rules of Business framed by the Governor under Art. 166 of the Constitution to pass orders on behalf of the Government in such matters Niranjan Singh v. State of Madhya Pradesh, 1973 1 SCR 691 Habibullah Khan v. State of West Bengal, 1974 4 SCC 275 Jagdish Prasad v. State of Bihar Anr., 1974 4 SCC 455 and Mohd. Alam v. State of West Bengal, 1974 4 SCC 463. In the present case, in answer to the numberice issued by this Court under Art. 136, the affidavit in reply has been filed by Shri S.V. Joshi, District Magistrate, Beed who passed the impugned order of detention. There is a general denial in paragraph 2 of the companynter-affidavit that there was unreasonable delay in the disposal of the representation made by the appellant. However, the delay in disposal of the representation was in the Secretariat and therefore it is averred in paragraph 11 I say that the affidavit filed by Shri Vishwasrao, Desk Officer, Home Department Special , Mantralaya, Bombay on behalf of State of Maharashtra in the High Court Bench at Aurangabad will reveal that different steps, as required by the provisions of National Security Act, 1980 are taken immediately, within stipulated period. and it is then averred in paragraph 12 that the companytentions raised by the appellant with regard to delay have been dealt with by the High Court while deciding the writ petition. It is said that the appellant has raised the companytention about unreasonable delay in disposal of his representation, for the first time in this Court presumably on the reasoning of the High Court. There is on record an affidavit sworn by S. Vishwasrao, Desk Officer, Home Department Special , Mantralaya, Bombay in answer to the grounds 16 A and 16 E . As regards the grounds 16 A and 16 E formulated in the petition for grant of special leave regarding unreasonbale delay, it is averred in paragraph 3 of the affidavit I say that the representation dated 22nd September, 1986 addressed to the Chief Minister by the detenu was forwarded by the Superintendent, Aurangabad Central Prison, Aurangabad on 24th September, 1986. I further say that the said representation was received in the Department on 26th September, 1986. I further say that the parawise remarks on the said representation were called for from the detaining authority, i.e. District Magistrate, Beed on 26th September, 1986 and remarks of the District Magistrate dated 3rd October, 1986 were received by the Government on 6th October, 1986. I further say that thereafter, the said representation was processed together with report of the Advisory Board and as stated in the earlier paragraphs, the said representation was rejected and the detention of the detenu was companyfirmed by the Chief Minister on 17th November, 1986. In the same paragraph, there is the following averment made with regard to delay in disposal of the representation in the Chief Ministers Secretariat I further say that the Chief Minister was pre-occupied in companynection with very important matters of the State which involved tours as well as meetings outside Bombay. I further say that during the period from 23.10.1986 to 17.11. 1986, two Cabinet meetings were held at Pune and Aurangabad, each meeting lasting for two days i.e. 28th and 29th October, 1986 at Pune and 11th and 12th November, 1986 at Aurangabad. I further say that such meetings in Pune and Aurangabad are generally held once a year to focus the attention on regional problems. I further say that the preparations for these meetings as well as other meetings held with the companycerned Ministers and officials demanded a lot of time of the Chief Minister and this naturally resulted in some delay in disposing of several cases submitted to the Chief Minister including this case. I further say that the cases where such representations are made in the detention matters, they required a close scrutiny of all the relevant record and careful application of mind. I therefore, respectfully submit that the time taken for passing the Government order in this case should be viewed in the light of the averments made in this affidavit and therefore, if properly companysidered, it cannot be said that the delay in disposing of the representation is unreasonable and unexplained. It is somewhat strange that the State Government should have acted in such a cavalier fashion in dealing with the appellants representation addressed to the Chief Minister. We are satisfied that there was failure on the part of the Government to discharge its obligations under Art. 22 5 . The affidavit reveals that there were two representations made by the appellant, one to the Chief Minister dated September 22, 1986 and the other to the Advisory Board dated October 6, 1986. While the Advisory Board acted with companymendable despatch in companysidering the same at its meeting held on October 8, 1986 and forwarded its report together with the materials on October 13, 1986, there was utter callousness on the part of the State Government to deal with the other representation addressed to the Chief Minister. It was number till November 17, 1986 that the Chief Minister companydescended to have a look at the representation. When the life and liberty of a citizen is involved, it is expected that the Government will ensure that the companystitutional safeguards embodied in Art. 22 5 are strictly observed. We say and we think it necessary to repeat that the gravity of the evil to the companymunity resulting from anti-social activities can never furnish an adequate reason for invading the personal liberty of a citizen, except in accordance with the procedure established by the Constitution and the laws. The history of personal liberty is largely the history of insistence on observance of the procedural safeguards. Apart from the admitted inordinate delay, there is a fundamental defect which renders the companytinued detention of the appellant companystitutionally invalid. As observed by one of us Sen, J. in Narendra Purshotam Umrao v. B.B. Gujral Ors., 1979 2 SCC 637 there was a duty cast on the Government to companysider the representation made by the detenu without waiting for the opinion of the Advisory Board. The companystitution of.an Advisory Board under s. 9 of the Act does number relieve the State Government from the legal obligation to companysider the representation of the detenu as soon as it is received by it. It goes without saying that the companystitutional right to make a representation guaranteed by Art. 22 5 must be taken to include by necessary implication the companystitutional right to a proper companysideration of the representation by the authority to whom it is made. The right of representation under Art. 22 5 is a valuable companystitutional right and is number a mere formality. The representation made by the appellant addressed to the Chief Minister companyld number lie unattended to in the portals of the Secretariat while the Chief Minister was attending to other political affairs. Nor companyld the Government keep the representation in the archives of the Secretariat till the Advisory Board submitted its report. In NarendraPurshotam Umraos case it was observed Thus, the two obligations of the Government to refer the case of the detenu to the Advisory Board and to obtain its report on the one hand, and to give an earliest opportunity to him to make a representation and companysider the representation on the other, are two distinct obligations, independent of each other. After referring to the decisions of this Court in Abdul Karim v. State of West Bengal, 1969 3 SCR 479 Pankaj Kumar Chakrabarty v. State of West Bengal, 1970 1 SCR 543 and Khairul Haque v. State of West Bengal, W.P. No. 246 of 1969, decided on September 10, 1969 the nature and dual obligation of the Government and the companyresponding dual right in favour of the detenu under Art. 22 5 was reiterated. The following observations of the Court in Khairul Haques case were quoted with approval It is implicit in the language of Art. 22 that the appropriate Government, while discharging its duty to companysider the representation, cannot depend upon the view of the Board on such representation. It has to companysider the representation on its own without being influenced by any such view of the Board. There was, therefore, numberreason for the Government to wait for companysidering the petitioners representation until it had received the report of the Advisory Board. As laid down in Abdul Karim v. State of West Bengal, the obligation of the appropriate Government under Art. 22 5 is to companysider the representation made by the detenu as expeditiously as possible. The companysideration by the Government of such representation has to be, as aforesaid, independent of any opinion which may be expressed by the Advisory Board. The fact that Art. 22 5 enjoins upon the detaining authority to afford to the detenu the earliest opportunity to make a representation must implicitly mean that such representation must, when made, be companysidered and disposed of as expeditiously as possible, otherwise, it is obvious that the obligation to furnish the earliest opportunity to make a representation loses both its purpose and meaning. In the circumstances, there being a failure on the part of the State Government to companysider the representation made by the appellant addressed to the Chief Minister without waiting for the opinion of the Advisory Board, renders the companytinued detention of the appellant invalid and companystitutionally impermissible. We have numbermanner of doubt that there is numberexplanation whatever much less any reasonable explanation for the inordinate delay in companysideration of the representation made by the appellant addressed to the Chief Minister and that by itself is sufficient to invalidate the impugned order of detention. In fact, numberone has filed any affidavit to explain the cause for the delay in Chief Ministers Secretariat. The companynter-affidavit filed by Shri S.V. Joshi, District Magistrate companytains a bare denial in paragraph 2 that there was any unreasonable delay in the disposal of the representation. As regards the delay in disposal of the representation in the Secretariat, he adverts in paragraph 11 to the affidavit filed by Vishwasrao, Desk Officer, Home Department on behalf of the State Government and asserts that it reveals the different steps that were taken and in paragraph 12 he submits that the companytention about unreasonable delay in disposal of the representation by the State Government was number raised in the High Court and it has been taken for the first time in this Court. Even so, the appellant having raised the ground in appeal it was the duty of the State Government to have placed all the material along with the companynter-affidavit. There is in fact numberexplanation offered as regards the delay in disposal of the representation in the Secretariat. We have already extracted the relevant portion from the affidavit of Vishwasrao, Desk Officer. It is accepted that the representation made by the appellant to the Chief Minister on September 22, 1986, forwarded by the Superintendent, Aurangabad Central Prison on the 24th, was received in the Home Department on the 26th which in its turn forwarded the same to the detaining authority i.e. the District Magistrate on the same day i.e. 26th for his companyments. The District Magistrate returned the representation along with his companyments dated October 3, 1986 which was received by the Government on the 6th. It is said that thereafter the representation was processed together with the report of the Advisory Board and was forwarded to the Chief Ministers Secretariat where the same was received on October 23, 1986. It is enough to say that the explanation that the Chief Minister was pre-occupied with very important matters of the State which involved tours as well as two Cabinet meetings at Pune on October 28 and 29, 1986 and at Aurangabad on November 11 and 12, 1986 was numberexplanation at all why the Chief Minister did number attend to the representation made by the appellant till November 17, 1986 i.e. for a period of 25 days. There was numberreason why the representation submitted by the appellant companyld number be dealt with by the Chief Minister with all reasonable promptitude and diligence and the explanation that he remained away from Bombay is certainly number a reasonable explanation. In view of the wholly unexplained and unduly long delay in the disposal of the representation by the State Government, the further detention of the appellant must be held illegal and he must be set at liberty forthwith. For these reasons, the appeal must succeed and is allowed.

The companyviction and sentence passed against the appellant by the learned Designated Court, Valsad at Navsari by the judgment dated 22-12-1989 in Sessions Case No. 79 of 1988 are impugned in this appeal. The prosecution case in short is that a theft had taken place in Village Kakaduva on 13-6-1988. When the owner of the house and other villagers were in search of the miscreants responsible for such theft, they spotted five persons present near a tea stall and they suspected their involvement in the case of theft. The matter was reported to the local police and on being searched from the possession of one of the persons, two sarees alleged to be stolen and a companyntry-made pistol and some live cartridges were recovered. The appellant and the other accused were, therefore, tried for offence under Section 3 and Section 5 of the Terrorists and Disruptive Activities Prevention Act, 1987 hereinafter referred to as TADA and also under Section 25 1 b a of the Arms Act. The learned Designated Court, however, acquitted the companyaccused because numberhing was recovered from his possession but companysidering the evidences adduced in the case, the appellant was companyvicted for the offence under Sections 3 and 5 of TADA and Section 25 of the Arms Act. In the instant case, there are independent witnesses who have deposed that from the possession of the appellant an object appearing to be a revolver and live cartridges had been recovered. Such depositions, therefore, appear to be trustworthy and do number deserve to be discarded. But, unfortunately numberody including the police personnel who had seized the said revolver had deposed that the police officer had himself tested the said weapon and found it to be a pistol in working companydition. The learned Designated Court in this case has rightly indicated that it is number always necessary to refer the weapon to the ballistic expert for his opinion.

Judgment of the Court of First Instance (First Chamber) of 13 December 1990. - Vereniging van Nederlandse Ziekenfondsen and others v Commission of the European Communities. - Competition - Omni-partijen akkoord - Admissibility - Nature of contested act. - Case T-114/89. European Court reports 1990 Page II-00827 Pub.RJ Page Pub somm Summary Parties Operative part Keywords ++++ Action for annulment of measures - Measures against which actions may be brought - Letter addressed by a Member of the Commission to a Member State expressing an opinion as regards the compatibility of an agreement between undertakings with the competition rules of the Treaty - No binding legal effects - Exclusion - Taking account thereof by addressee Member State when adopting national measures - Immaterial ( EEC Treaty, Arts 5, 85 and 173; Regulation No 17 of the Council ) Summary A letter addressed to the authorities of a Member State by a Member of the Commission which merely represents an initial evaluation, by the Commission' s departments, of an agreement between undertakings with regard to Article 85 of the Treaty and confines itself to suggesting amendments thereto, without producing binding legal effects such as those resulting from a decision granting exemption or a decision ordering interim measures, the procedural rights of the parties to the agreement and any person who has lodged a complaint against it being expressly reserved, cannot be regarded as an act whose annulment may be sought in an action under Article 173 of the Treaty . The fact that the said letter led the national authorities to which it was addressed to adopt measures of domestic law does not alter its legal nature . The Commission has no power either under Article 85 of the Treaty or Regulation No 17 or under Article 5 of the Treaty to address a binding decision to a Member State as regards the conduct to be adopted by the national authorities in connection with an agreement between undertakings falling under Article 85 of the Treaty, ( The grounds of this judgment are not substantively different from those of the judgment, also delivered on 13 December 1990, in Case T-113/89 Nefarma and Others v Commission [1990] ECR II-797 .) Parties In Case T-114/89, Vereniging van Nederlandse Ziekenfondsen, whose registered office is in Zeist ( Netherlands ), Kontaktorgaan Landelijke Organisaties van Ziektekostenversekeraars, whose registered office is in Houten ( Netherlands ), and Kontaktcommissie Publiekrechtelijke Ziektekostenregelingen voor Ambtenaren, whose registered office is at Nieuwegein ( Netherlands ), represented by H . P . Utermark, of the Hague Bar, and F . O . W . Vogelaar, of the Rotterdam Bar, with an address for service in Luxembourg at the Chambers of J . Loesch, 8 rue Zithe, applicants, v Commission of the European Communities, represented by B . J . Drijber, a member of its Legal Department, acting as Agent, with an address for service in Luxembourg at the office of Guido Berardis, also a member of the Commission' s Legal Department, Wagner Centre, Kirchberg, defendant, supported by Kingdom of the Netherlands, represented by J . W . de Zwaan, Assistant Legal Adviser at the Ministry of Foreign Affairs, acting as Agent, with an address for service in Luxembourg at the Netherlands Embassy, 5 rue C . M . Spoo, intervener, APPLICATION for a declaration that one or more decisions alleged by the applicants to be contained in various letters of a Member of the Commission and of a Director of the Directorate-General for Competition are void, THE COURT OF FIRST INSTANCE ( First Chamber ), composed of : J . L . Cruz Vilaça, President, H . Kirschner, R . Schintgen, R . García-Valdecasas and K . Lenaerts, Judges, ( The grounds of the judgment are not reproduced .) Operative part hereby : ( 1 ) Dismisses the application as inadmissible; ( 2 ) Orders the applicants to pay the costs jointly and severally, except those incurred by the intervener, which must be borne by the intervener itself .

The Hon Mr Justice Coulson: 1. INTRODUCTION Pursuant to a contract dating from March 2000, the respondent engaged the claimant to carry out the design and construction of a facility to support nuclear submarines at HMNB Clyde ("the contract"). The contract is a Maximum Price Target Cost ("MPTC") contract, and the original Maximum Price Target Cost was £89 million odd. There have been extensive cost and time overruns. The current agreed Maximum Price is £142.1 million, but the claimant considers it likely that the ultimate cost of the contract may be as much as £235.7 million, some £93.6 million in excess of the current agreed Maximum Price. There is no dispute that, if the costs exceeded the agreed Maximum Price, up to a cap of £50 million, the claimant was entirely liable for such excess costs. The difficulty arises out of the unusual (and badly-worded) provisions of the contract as to what would happen once this cap was reached. It has always been the claimant's case that, once the costs had exceeded the Maximum Price plus £50 million, the respondent went back on risk to pay further sums to the claimant. As the arbitrators (referred to as the Disputes Review Board, or "DRB") noted at paragraph 43 of their award: "Target costs mechanisms have become common place but one which imposes a substantial overrun on one party, and then on the other party when that substantial overrun reaches a ceiling, is something which the DRB had not previously encountered." Historically, there were two issues between the parties. The first was whether the respondent was liable to pay anything at all once the costs reached the Maximum Price plus £50 million. The second issue was, if the respondent was liable to pay when the cap was reached, what precisely did it have to pay: actual costs (which carried with it the contractual definition of costs 'reasonably and properly incurred'), or any costs howsoever incurred by the claimant (including, therefore, costs which were unreasonably or improperly incurred)? In an adjudication decision dated 8 December 2010, the adjudicator, Dr John Uff QC, concluded that the respondent was liable to pay once the costs exceeded the Maximum Price plus £50 million cap, but that such liability was limited to actual costs properly incurred in excess of that figure. In 2012, the claimant challenged the adjudicator's decision by making a reference to the DRB. The issues were argued de novo: the claimant sought a declaration that it was entitled to any costs howsoever incurred once the Maximum Price plus £50 million figure was exceeded, whilst the respondent argued that it had no liability at all or, alternatively, a liability limited to actual costs reasonably and properly incurred. The DRB consisted of two well-known QCs specialising in construction law, and a distinguished former judge of the Technology and Construction Court. Their award was dated 26 October 2012. In it, the DRB unanimously declared that, on a proper construction of the contract, the respondent was liable to reimburse the claimant once the cost had reached the Maximum Price plus £50 million. The majority of the DRB considered that what was then payable were the actual costs reasonably and properly incurred. The dissenting view was to the effect that all costs (howsoever incurred) should be paid by the respondent to the claimant once the cap was reached. This construction would make the respondent liable to pay the costs incurred as a consequence of the claimant's own breaches of contract. By a claim form dated 23 November 2012, the claimant sought permission to appeal the DRB's award pursuant to section 69 of the Arbitration Act 1996. By an order dated 26 November 2012, Akenhead J ordered a rolled-up hearing, namely a hearing at which, if permission was granted, the court would proceed to hear the substantive appeal. In the event, at the hearing on 19 December 2012, having read the skeleton submissions and heard oral argument, I indicated to the parties that the application for permission to appeal would be refused. I gave brief reasons for that decision, indicating that my detailed reasons would be provided at a later date. This Judgment contains my detailed reasons for refusing the claimant permission to appeal. I propose to set out the terms of the contract in Section 2 below which are of particular relevance to this application. I do not set out all of the terms. In Section 3, I summarize the relevant parts of the award and the majority decision. In Section 4, I set out the key elements of the dissenting view. There is a short summary of the applicable law in Section 5. Then, at Section 6, I deal with whether or not this application raises a point of general public interest which is, of course, a relevant consideration in formulating the applicable test for permission to appeal. At Section 7, I ask myself whether the majority were obviously wrong and/or whether their view was open to serious doubt. In Section 8, I consider whether the dissenting view is arguable. There is a brief summary of my conclusions at Section 9 below. I am very grateful to counsel for the excellence of their written and oral submissions. 2. THE CONTRACT The critical terms of the contract were conditions 9.1 and 9.2. They provided as follows: "Maximum Price Target Cost Pricing Provisions 9.1 The Authority and the Prime Contractor have agreed that the following Maximum Price Target Cost (MPTC) pricing provisions shall apply to the Works carried out under this Contract. These provisions are illustrated graphically at Part 9 to the Commercial Document. 9.2 The MPTC Pricing Provisions for the Works comprise the following as detailed in the MPTC Breakdown Schedule at Part 9 of the Commercial Document:   Design &. Construction Works 9.2.1 Target Cost £120,151,499 9.2.2 Target Profit £6,728,484       (x% of Target Cost) (5.6%) 9.2.3 Maximum Cost £139,789,223        (Target Cost + y%) (16.35162%) 9.2.4 Maximum Price £141,615,026        (Target Cost +z%) (17.86372%) (The % figures in the above breakdown are for the purposes of establishing revised figures if Changes in the Scope of Service take place as contemplated by Condition 7.12 and 12.1) 9.2.5 A sharing arrangement for cost under-runs between the Authority and the Prime Contractor of 55/45 (the Authority's share shown first) between the Target Cost and Actual Cost ascertained in accordance with Condition 9.7 to 9.10. 9.2.6 A sharing arrangement for cost over-runs between the Authority and the Prime Contractor of 75/25 (the Authority's share shown first) between the Target Cost and Actual Costs ascertained in accordance with Conditions 9.7 to 9.10 up to the Maximum Cost, beyond which the Prime Contractor shall be liable for all costs incurred in satisfying his obligation under the Contract and whereby the share line becomes 0/100 (the Authority's share first). 9.2.7 The maximum liability of the Prime Contractor for any loss, claim or additional costs over the Maximum Price in connection with this Contract or arising from any breach of contract or under any indemnity hereunder, breach of statutory duty, in tort or otherwise at common law or otherwise howsoever arising shall not exceed the Maximum Price plus £50m (fifty million pounds sterling) 9.2.8 The Prime Contractor confirms that he estimated prices which contribute to the total cost of the MPTC Pricing Provisions, as detailed within Part 9 of the Commercial Document, represent the best estimate of the likely costs of the Works. However, both the Prime Contractor and the Authority agree that there will be no adjustment of the MPTC Pricing Provisions as a result of any increases or decreases to the estimated prices within the MPTC Pricing Provisions, at any time during the course of the Contract. This Condition shall not preclude changes to the MPTC Pricing Provisions as a result of any other provision of this contract." Incorporated in the contract was a document entitled 'Joint Equality of Information Pricing Statement' (known as 'JEOIPS'). Paragraph 6 of Schedule B of JEOIPS was in diagram form and read as follows: "6. Condition 9.2.7 of the Terms and Conditions specify that the Prime Contractor's overall financial liability shall not exceed the Maximum Price plus £50m. This pricing agreement is to provide further clarity on who has financial liability at what part of the overall MPTC process: The costs shown in the above diagram represent the Target and Maximum Prices as at 14th December 2008. As a principle, the Authority will require demonstration of all actual costs incurred which will contribute to the £50m liability limit." In the contract, 'Actual Costs' was defined as meaning the costs detailed in condition 9.8. Conditions 9.7 and 9.8 provided as follows: "Assessment of Actual Costs Incurred 9.7 For the purposes of assessing Actual Costs incurred by the Prime Contractor, the Prime Contractor shall, in accordance with Condition 9.11, furnish such particulars of costs properly incurred in connection with MPTC Pricing Provisions under the Contract as may be reasonably required by the Authority. Such costs shall be allocated in accordance with the Prime Contractor's Cost Allocation Statement at Part 14 to the Commercial Document. The Prime Contractor shall permit such particulars of costs to be verified by the Authority by inspection of his books, accounts, documents and other records. 9.8 Actual Costs properly incurred against the MPTC Pricing Provisions shall include but shall not be limited to: 9.8.1 Wages and salaries constituting a direct charge to the Works preformed under the Contract; 9.8.2 Materials intended for incorporation in the Works performed under the Contract; 9.8.3 Overheads and administration charges appropriate to the Contract; 9.8.4 Sub-contractor and supplier costs within the Supply Chain for which invoices have been received by the Prime Contractor since the date of the last Milestone Payment which, in the reasonable opinion of the Prime Contractor, are anticipated to be paid to the said sub-contractor and/or supplier before satisfactory completion of the Milestone being claimed." The significance of 'Actual Costs' was also addressed in Conditions 9.11 to 9.15 of the contract, which dealt with the Final Price payable to the claimant: "Assessment of Final Price Payable 9.11 The Final Prices Payable to the Prime Contractor for carrying out the Works covered by the MPTC Pricing Provisions shall be based upon the Actual Costs in each case properly incurred and verified in accordance with Conditions 9.7 to 9.9. The Prime Contractor shall submit to the Authority, annually from date of award of contract and within 2 Months of completion of the Works, a Certified Cost Statement as per the sample attached at Schedule 5 detailing all costs incurred in providing Works under the Contract. 9.12 The Final Price Payable in respect of the Works shall be calculated as follows: 9.12.1 If the Actual Costs determined in accordance with Conditions 9.7 to 9.8 are equal to the finally adjusted Target Cost, then the Prime Contractor shall be paid the finally adjusted Target Price (i.e., finally adjusted Target Cost plus finally adjusted Target Profit); 9.12.2 If the Actual Costs determined in accordance with Conditions 9.7 to 9.8 are less than the finally adjusted Target Cost, the Prime Contractor shall be paid a sum equal to: 9.12.2.1 The Actual Cost determined in accordance with Conditions 9.7 to 9.8; 9.12.2.2 The finally adjusted Target Profit; plus 9.12.2.3 45% of the difference between the finally adjusted Target Cost and the Actual Cost determined in accordance with Conditions 9.7 to 9.8. 9.12.3 If the Actual Cost determined in accordance with Conditions 9.7 to 9.8 is greater than the finally adjusted Target Cost then the Prime Contractor shall be paid a sum equal to: 9.12.3.1 The finally adjusted Target Cost; plus 9.12.3.2 The finally adjusted Target Profit; plus 9.12.3.3 75% of the difference between the finally adjusted Target Cost and the Actual Costs determined in accordance with Conditions 9.7 to 9.8 PROVIDED that the Final Price Payable to the Prime Contractor shall not exceed the contractually agreed Maximum Price. … 9.15 The Final Price Payable excludes the following: 9.15.15 Any costs incurred by the Prime Contractor by reason of any default or breach on the part of the Prime Contractor and without prejudice to the generality of the foregoing; 9.15.16 Any sum allowed or paid by the Prime Contractor in respect of liquidation damages; 9.15.17 Any sum allowed or paid by the Prime Contractor as damages for breach of contract; 9.15.18 Any sums allowed or paid to the Authority resulting from any loss or damage caused to the Authority, its employees or agents as a result of a default by the Prime Contractor. 9.15.19 All costs relating to remedial work as a consequence of defects in the Prime Contractor's Works as a result of negligence or gross error, or of defects noted by the DEPM in reviewing and inspecting Works submitted for final inspection, or of construction defects becoming apparent during the Defect Liability Period for which the Prime Contractor is responsible to make good." It would be unnecessarily wearisome to set out all of the other contractual provisions which deal with value, pricing and payment. Suffice to say that, in one way or another, they all refer to and/or emphasise the significance of Actual Costs, defined as costs 'properly incurred', with the Certified Cost Statement (condition 9.11, at paragraph 10 above) referring to "Cost reasonably and properly incurred…" Although these contractual provisions are rather long-winded, in essence the pricing arrangements can be summarised as follows: (a) Condition 9.2.5 provided that any cost under-runs between the Target Cost and Actual Cost were to be shared 55/45 between the respondent and the claimant; (b) Condition 9.2.6 provided that cost over-runs between the Target Cost and the Actual Costs up to the Maximum Price were to be shared 75/25 between the respondent and the claimant;[1] (c) Condition 9.2.6 also provided that the claimant was liable for all costs beyond the Maximum Price; (d) Once the Maximum Price plus £50 million had been reached, then Condition 9.2.7 and paragraph 6 of schedule B of the JEOIPS combined to pass the liability to pay back to the respondent. As noted below, that construction is not now disputed. The remaining issue is whether what was payable by the respondent pursuant to this provision was all costs, or merely actual costs, as defined in the contract. 3. THE AWARD / THE MAJORITY VIEW Having set out the contractual provisions, at paragraph 33 of the award the DRB indicate that the majority view is set out between paragraphs 34 to 49, whilst the dissenting view is set out between paragraphs 50 to 61. At paragraph 34, the majority set out some uncontroversial principles of contract construction. At paragraphs 35 – 37, they explained why they concluded that the respondent was liable to the claimant to make further payments once the Maximum Price plus £50 million figure had been reached. From paragraphs 39 to 49 the majority then dealt with the second issue, which is the one that is the subject of this application for permission to appeal. Does the reference to 'additional costs' in condition 9.2.7 mean actual costs, as defined in the contract as costs reasonably and properly incurred, or all costs, howsoever incurred? The majority view was that it must mean actual costs. They said that because: (a) The contract conditions and paragraph 6 of JEOIPS repeatedly referred to and used the phrase "actual costs" (see paragraph 39 of the award); (b) If condition 9.2.7 referred to all costs, howsoever incurred, not actual costs, then large parts of the clause were superfluous (see paragraph 40 of the award); (c) Conditions 9.2.6 and 9.2.7 must be read together. When they were, it was clear that the reference to additional costs in condition 9.2.7 must mean actual costs (see paragraph 41 of the award); (d) The claimant's contrary construction would have some very unusual results. It would mean, for example, that the claimant would not be liable for the costs caused by its own breaches of contract, and that instead the respondent would be liable to pay such costs (see paragraph 42(1) of the award); (e) The claimant's construction would mean that many express provisions of the contract would become inapplicable once the cap of Maximum Price plus £50 million was reached. This would include the claimant's express obligation to remedy defects in its own work, and at its own cost, set out at condition 4.13 (see paragraph 42(2) of the award); (f) The payment mechanisms in the contract related to the payment of actual costs and were inconsistent with an obligation to pay any costs, howsoever incurred (see paragraph 42(3) of the award). At paragraphs 44 – 49 of the award, the majority set out their view that the respondent was entitled to deduct liquidated damages from the actual costs payable to the claimant. 4. THE AWARD / DISSENTING VIEW It is important to note at the outset that, because of the way in which the award was divided up, the dissenting view dealt both with the underlying issue of liability (on which the DRB were unanimous and which is now no longer in dispute), as well as the second issue as to what was payable by the respondent to the claimant once the cap was reached. I consider that paragraphs 50 – 54 of the dissenting view were concerned with that first issue of liability. In essence, the conclusion set out in these paragraphs was that the term which switched the liability to pay back to the respondent once the cap of the Maximum Price plus £50 million had been reached, was categorised as a 'catastrophe' clause. This is confirmed at paragraph 54: "Why would the Authority agree to pay AMEC anything over Maximum Price plus £50 million? The answer must be to protect the Authority and the project from AMEC being financially unable to complete the Contract, having absorbed £50 million of loss (in addition to any other losses incurred before the maximum was reached)…From AMEC's point of view another reason would be that AMEC could be unable to get financing or comfort from its bankers for such a project with all its inherent risks, unless there was some safety valve which would ensure that its losses were capped at £50 million." This passage is criticised by the respondent because it is not based on any evidence adduced at the arbitration hearing and could only be speculation on the part of the dissenter. In my judgment there is force in that criticism: the passage certainly demonstrates an unusual approach to contract construction. But it makes sense as a general explanation as to why, in the circumstances of this large project, the respondent may be liable to make further payment to the claimant once the cap of Maximum Price plus £50 million had been reached. The issue which lies at the heart of this application for permission to appeal is identified at paragraph 55 of the dissenting view: is the respondent liable for all costs, or merely actual costs as defined by the contract? Then, at paragraphs 56 to 59, four reasons are set out by the dissenter as to why the answer should be all costs, howsoever incurred, rather than actual costs. By way of conclusion, at paragraph 60, the dissenting view describes the term as a guarantee by the respondent to the effect that "if your losses exceed £50 million we will come to your rescue". There is also an attempt to explain away the reference to 'actual costs' in the proviso at the end of the JEOIPS (see paragraph 8 above), a matter to which I return below. 5. THE APPLICABLE LAW 5.1 Section 69 of the Arbitration Act 1996 Section 69 of the Arbitration Act 1996 provides as follows: "(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings. An agreement to dispense with reasons for the tribunal's award shall be considered an agreement to exclude the court's jurisdiction under this section. … (3) Leave to appeal shall be given only if the court is satisfied— (a) that the determination of the question will substantially affect the rights of one or more of the parties, (b) that the question is one which the tribunal was asked to determine, (c) that, on the basis of the findings of fact in the award— (i) the decision of the tribunal on the question is obviously wrong, or (ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and (d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question." In the present case, I consider that the pre-conditions at s.69(3)(a) and (b) above are fulfilled. I also take the view that, if either of the grounds in (c) are made out, the provision at (d) would not operate to prevent the granting of leave to appeal. 5.2 'Obviously Wrong' The test was originally formulated by Lord Diplock in The Nema [1982] AC 724 at 742-3 where he said: "…leave should not normally be given unless it is apparent to the judge upon a mere perusal of the reasoned award itself without the benefit of adversarial argument, that the meaning ascribed to the clause by the arbitrator is obviously wrong. But if on such perusal it appears to the judge that it is possible that argument might persuade him, despite first impression to the contrary, that the arbitrator might be right, he should not grant leave; the parties should be left to accept, for better or for worse, the decision of the tribunal that they had chosen to decide the matter in the first instance." The test has subsequently been described in rather more colourful language. In The Kelaniya [1989] 1 Lloyd's LR 30, Lord Donaldson said, discussing the test and its relationship with one-off cases: "This is not however to say that, even in a one-off case, an arbitrator is to be allowed to cavort about the market carrying a small palm tree and doing whatever he thinks appropriate by way of settling the dispute. What it does amount to is that the Courts will normally leave him to his own devices and leave the parties to the consequences of their choice. They will only intervene if it can be demonstrated quickly and easily that the arbitrator was plainly wrong." More recently still, Colman J described the test in this way in the Master's Lecture, entitled 'Arbitration and Judges – How much interference should we tolerate?' (London, 14/03/06): "What is obviously wrong? Is the obviousness something which one arrives at…on first reading over a good bottle of Chablis and some pleasant smoked salmon, or is 'obviously wrong' the conclusion one reaches at the twelfth reading of the clauses and with great difficulty where it is finely balanced. I think it is obviously not the latter." 5.3 Questions of General Public Importance The authorities demonstrate that it can be something of an uphill task to persuade a court that the question is one of general public importance. However, in The Kelaniya, noted above, although permission to appeal was refused, Lord Donaldson found that the contract in question was of general public importance because it involved what he described as "the application of the inter-club agreement for the apportionment of liabilities in respect of cargo under the notoriously imprecise New York Produce Exchange form of charter-party; and, whilst it is quite true that the words of amendment used in this particular charter may be one-off, the question of what is the effective amending words in other charters in this form is a general one…" By contrast, in Keydon Estates Ltd v Western Power Distribution (South Wales) Ltd [2004] EWHC 996 (Ch), Lloyd J (as he then was), noted that the provision in question (that the sub-lease was for the full residue of the term) was unusual and was likely to have arisen as a result of an oversight. He therefore concluded that it was not a point of general public importance. 5.4 The Relevance of a Dissenting View The fact that there is a dissenting view is of some assistance to the court on the argument that the decision was obviously wrong, or alternatively was at least open to serious doubt. In The Northern Pioneer [2002] EWCA Civ 1878, at paragraph 64, Lord Phillips said: "The difference of view between the experienced arbitrators in this case provides, of itself, ground for contending that the decision of the majority is 'at least open to serious doubt'." In F Ltd v M Ltd [2009] EWHC 275 (TCC), another case where there was a dissenting view, I said at paragraph 16: "…a comment or observation in a dissenting opinion, to the effect that an important point has been decided by the majority without reference to the parties, will be a factor to which the court will attach weight in dealing with an application under Section 68. Depending on the circumstances, such an observation may have considerable weight, although it is unlikely that it could, on its own, prove determinative." That was a case concerning irregularity rather than a point of law, but the same general considerations must apply. 5.5 'Major Intellectual Aberration' In Braes of Doune Windfarm (Scotland) Ltd v Alfred McAlpine Business Services Ltd [2008] 1 Lloyd's LR 608, Akenhead J, in dealing with the criteria under s.69(3)(d) said: "It could properly be said that, if all the other criteria were established it would often, but not invariably, be unjust for an obviously wrong decision on an important question of law not to be put right by the court. That could be thought to be even more so if the chosen highly respected arbitrator had simply had a major intellectual aberration." Although that passage was specifically concerned with s.69(3)(d) of the 1996 Act, the phrase 'a major intellectual aberration' has subsequently been described as "a useful way of bringing to mind that the error on which we are concerned, if there be an error, must be an obvious one": see paragraph 8 of the judgment of Arden LJ in HMV UK v Propinvest Friar Limited Partnership [2011] EWCA Civ 1708. With those principles of law in mind I turn to deal with the questions which arise on this application for leave to appeal. 6. DOES THIS APPLICATION RAISE A QUESTION OF GENERAL PUBLIC IMPORTANCE? I have read the statement of Mr Mark Watson, served on behalf of the claimant, dated 22 November 2012, and the statements served on behalf of the respondent, from Mr John Ioannou and Mr Stephen Johnstone, both dated 12 December 2012. From that material I conclude that: (a) This was originally drafted as a one-off contract, for use on this particular project; (b) Two or three other contracts in similar form have subsequently been let over the ten year period since this contract was first agreed; (c) The vast majority of the contracts let by the respondent are on standard form contracts, particularly the NEC 3 form, which does not contain the sort of complex shifting back and forth of the basic liability to pay manifest here. In those circumstances, I conclude that this is not a point of general public importance. It is an issue of construction in respect of a one-off contract. The contract is not in standard form and is not in regular or widespread use. The decision of the DRB is therefore of no general interest to the public. Furthermore, I consider that much of the debate in the witness statements as to whether or not this was a point of general public importance rather missed the point. There was a good deal of material about the public importance of incentive-based contracts and how this decision will be of particular interest to those concerned with such forms of contracting. But in my view, the particular issue which arises on this application has nothing to do with the general advantages or disadvantages of incentive-based contracts. The dispute here is a particular one, namely the precise construction of a specific 'catastrophe' clause which, as the name implies, will rarely be activated in any event. In my view, the arguments deployed on this application have nothing to do with the general merits or demerits of incentive-based contracts. Moreover, I cannot help but note the view of the DRB themselves (as set out at paragraph 2 above); they say expressly that they have never come across this particular approach to risk-sharing before. That again demonstrates that this is an unusual, one-off point and not a matter of general public importance. Accordingly, for these reasons, it seems to me that the appropriate test on this application is whether or not the majority view is obviously wrong. However, in case I am wrong about the general public importance of the issue, I also consider the majority view by reference to the lesser test of whether it is at least open to serious doubt. 7. IS THE MAJORITY VIEW OBVIOUSLY WRONG? In my view, the majority view is not obviously wrong. Moreover, I also consider that it is not open to serious doubt. Indeed, for the reasons summarised below, I consider that the majority view was plainly right. First, the majority construed condition 9.2.7 by reference to the other terms of the contract. I consider that to be the correct approach to contract construction. Having adopted that course, the majority conclusively demonstrated that the entire pricing and payment regime of this contract depended on the ascertainment of actual costs. It was the actual costs incurred by the claimant which were to be measured against the Target Cost and the Maximum Price, and it was the actual costs which triggered the milestone payments. It was the actual costs which were included in the Certified Cost Statement (condition 9.11) as having been those costs "reasonably and properly incurred". Thus, because the entire pricing and payment regime in the contract depended on the ascertainment of actual costs, it would be a very curious result, and render large parts of condition 9.2.7 (and indeed other parts of the contract) superfluous, if the provisions relating to the position once the Maximum Price plus £50 million had been reached suddenly abandoned the concept of actual costs altogether and made all costs, howsoever incurred, recoverable by the claimant. Secondly, the majority demonstrated in their analysis that, if the costs recoverable were not actual costs, as defined, it would result in some very odd results. Paragraph 42 of the award sets out some of them. These matters were not addressed in any detail as part of the claimant's application to this court, and, where they are touched on in paragraphs 35 to 37 of the claimant's skeleton, I find the points made wholly unpersuasive. They are not even mentioned in the dissenting view, let alone answered. It seems to me that they provide an insurmountable bar to the claimant's construction of condition 9.2.7. Thirdly, and related to that second point, there is the bizarre conclusion to which the claimant's construction inevitably leads, to the effect that the claimant would be able to recover from the respondent the costs of rectifying its own breaches of contract, and would be entitled to be paid to remedy defects which it had created in the first place. That would be a very unusual situation which, on ordinary principles, could only be permitted by the clearest possible contractual provisions. In this case I consider that there are no provisions which support such an approach. Fourthly, the majority demonstrated that the claimant's argument is, at root, a semantic one, depending in large part on the fact that the proviso to paragraph 6 in schedule B of the JEOIPS document (paragraph 8 above) - which gave rise to the liability to pay in the first place - referred to 'actual costs' in lower case, as opposed to the capital 'A' and capital 'C' used in some other parts of the contract. To argue that there is a very different meaning to be ascribed to the same words, depending only on whether or not they have capital letters, is a remarkably unattractive approach to contract construction. In any event, it is not an argument open to the claimant in this case since, as again the majority demonstrated, the phrase 'actual costs', in lower case, is used interchangeably in other parts of the contract with 'Actual Costs', as defined. It would be unnecessary in a judgment of this sort to set out further reasons why, in my view, the majority view was obviously correct. But it is worth standing back and looking at the picture in the round. The respondent denied that it had an obligation to pay at all. In my view, that was an argument which, but for the JEOIPS document, might well have been successful. Accordingly, since the respondent's basic liability to pay again, once the Maximum Price plus £50 million figure was reached, creeps rather hesitantly into the contractual spotlight, it is perhaps unsurprising that the precise definition of what is to be paid is not as clear as it might have been. If it is a 'catastrophe clause', to use the dissenter's words, it may be that the draughtsman was not paying particular attention to its finer points. But it would be commercially surprising if the parties intended that a contract, which depended throughout on the ascertainment of actual costs, could go so wrong in terms of time and cost that, when the Maximum Price plus £50 million was reached, actual costs suddenly became irrelevant and all costs, however unreasonable or improperly incurred, would become recoverable instead. No justification for such a violent change of approach to payment has ever been put forward. In my view, that is the answer to the final argument advanced by the claimant. Mr Stewart QC suggested that the majority view made no commercial sense. I respectfully disagree with that for the reasons which I have indicated. Indeed, if the only thing that mattered in terms of contract construction was the need to reach a commercially commonsensical answer, then I consider that the majority view is the one to be preferred. For all those reasons, therefore, I consider that, not only was the majority view not obviously wrong, or even open to serious doubt, but also that the majority were right in their approach and in their conclusions. 8. IS THE DISSENTING VIEW SERIOUSLY ARGUABLE? Another way of approaching the question raised by this application is to consider whether or not the dissenting view is at least seriously arguable. In my view, with great respect to the dissenter, it is not. As noted above, I considered that, on first reading, paragraphs 50 – 54 of the dissenting view were concerned with the issue of liability, which no longer arises in this case. Even if that were wrong, I do not consider that these paragraphs add anything to the question of construction which I have to consider. Even if the matters set out are part of the background as the dissenter sees it, there is nothing there which I consider to be particularly informative. Even if it is right (and it all appears to be speculation on his part) that this safety net provision was designed to prevent the claimant from being financially unable to complete the contract, that does not mean that the safety net was intended to cover every penny the claimant spent once the cap was reached, no matter how unreasonable or improper. That, so it seems to me, is an unsustainable leap of logic which is unsupported by the words of the contract. In paragraph 55 onwards, the dissenter sets out his views as to why the reference to costs in condition 9.2.7 must be to all costs, not actual costs. The dissenter provides four reasons for this conclusion. However, on analysis, those reasons are actually contrary to the words used by the parties in the contract itself. Thus: (a) At paragraph 56, the dissenter says that the respondent had "no interest" in actual costs once the Maximum Price was reached. That ignores all of the contract provisions relating to milestone payments and Final Payment, which apply once the Maximum Price was reached and which all say in terms that what matters is actual cost. It also ignores the point that, since the respondent was coming back on risk at Maximum Price plus £50 million, the respondent would inevitably be very interested in what was actual cost and what was cost that was due to the claimant's default, and therefore (at least ordinarily) irrecoverable. (b) Critically, the observation in paragraph 56 as to the respondent's lack of interest in actual cost in this situation wholly ignores the proviso to clause 6 of section B of the JEOIPS document (paragraph 8 above) which expressly states that "the Authority will require demonstration of all actual costs incurred which will contribute to the £50 million liability limit." I consider that the respondent's emphasis on actual costs could not be plainer, and to conclude, in the face of those words, that it is 'implausible' that the respondent required the claimant to certify the actual costs once the Maximum Price had been reached, is wrong. (c) Paragraph 57 talks about certainty and suggests that it is implausible to argue that the claimant's bankers would have thought that the £50 million would be limited to actual costs, so that on this basis the claimant's losses would in fact have had to have exceeded £50 million before the safety valve was triggered. But again, the answer to that is simple: that is what the contract expressly provided. Moreover, certainty is a two-way street. If the claimant was entitled to all costs incurred above Maximum Price plus £50 million, no matter how badly it performed, then in one sense it might be regarded as having an incentive to perform badly. In those circumstances, there would be no corresponding certainty for the respondent at all. (d) Paragraph 58 appears to make a virtue of the size of the £50 million figure and then concludes that it could not mean actual costs because they would not be easy to establish. Again, with great respect to the dissenter, that simply ignores all of the contractual provisions which repeatedly say that the claimant needed to demonstrate actual costs (however hard or easy they may be to establish). (e) Paragraph 59, which at first I did not understand, (because it refers to the last sentence of condition 9.2.6 when in fact condition 9.2.6 is just one sentence) is in truth circular. It is suggesting that condition 9.2.7 is there to bail out the claimant and that therefore, in some way, questions of actual costs no longer matter. The conclusion does not follow: even if the clause is a bail-out, that does not mean that it was intended to make recoverable every penny spent by the claimant, no matter how improperly or unreasonably. In my judgment, the problem with the dissenting view is encapsulated at paragraph 60 of the award. There, the dissenter goes as far as to say that condition 9.2.7 was some form of guarantee, a construction which in my view is not borne out either by the words or his own categorisation of this provision as a catastrophe clause. But the dissenter also asserts that the proviso at the end of the JEOIPS document, with its express reference to actual costs, "is sufficient for public accounting purposes. It makes it clear that the fall-back guarantee is not to be regarded as a charter for loading losses which are not attributable to this contract." I am bound to say that I consider that to be an attempt to rewrite the express terms of the contract. The reference in the proviso to actual costs is plain: that is a concept which is defined in the contract and is a vital element of the pricing and payment regime. The fact that it is in lower case is immaterial, something which the dissenter appears to accept in the first part of paragraph 60. The contractual definition of actual costs is costs 'reasonably and properly incurred'. The concept of actual costs is far more rigorously defined and clear-cut than the meaning of 'costs' for which the dissenter contends, which is essentially all and any costs and losses provided they are in some way attributable to this contract. There is no basis, either in commercial reality or construction principle, which could lead to such a result. 9. CONCLUSIONS At the end of the hearing on 19 December 2012 I refused the claimant's application for permission to appeal and I gave brief reasons for that decision. The fuller reasons set out above explain in greater detail how and why I reached that view. I have not dealt with any consequential matters which will have to be addressed once this Judgment has been handed down. Note 1   Although Condition 9.2.6 referred to MaximumCost, the DRB noted at paragraph 32 of their award that this must be an error and the reference should have been to MaximumPrice. Neither party argued to the contrary at the hearing.    [Back]

S. Singhvi, J. Democracy is a part of the basic structure of our Constitution and rule of law and free and fare election are basic features of democracy. Democracy postulates that there should be periodical elections so that people may be in a position either to re-elect the same representatives or choose new representatives. Democracy also companytemplates that elections should be free and fair and the voters should be in a position to vote for the candidates of their choice. The pre-requisite of this is that the elections are number rigged and manipulated and the candidates or their agents are number able to resort to unfair means and malpractices. These are, in substance, the observations made by H.R. Khanna, J. in his companycurring judgment in Smt. Indira Nehru Gandhi v. Shri Raj Narain and another 1975 Supp. SCC 1. Sir Winston Churchill described the importance of vote in a democratic election in the following words At the bottom of all tributes paid to democracy is the little man, walking into a little booth, with a little pencil, making a little cross on a little bit of paper - numberamount of rhetoric or voluminous discussion can possibly diminish the overwhelming importance of the point. In Mohinder Singh Gill v. Chief Election Commissioner 1978 1 SCC 405, the Constitution Bench after quoting the words of Sir Winston Churchill, proceeded to add if we may add, the little, large Indian should number be hijacked from the companyrse of free and fair elections by mob muscle methods, or subtle perversion of discretion by men dressed in little, brief authority. For be you ever so high, the law is above you. In Lily Thomas v. Speaker, Lok Sabha and others 1993 4 SCC 234, the Court elucidated meaning of the term voting in the following words Voting is the formal action of will or opinion by the person entitled to exercise his right on the subject and issue in question. Right to vote means right to exercise the right in favour or against the motion. Such a right implies the right to remain neutral as well. The scope of the citizens right to express his her opinion through the medium of the franchise was further developed in Union of India v. Association for Democratic Reforms and another 2002 5 SCC 294 LB . That case emanated from the directions given by Delhi High Court to the Union of India and Election Commission of India for short the Commission to implement the recommendations made by the Law Commission in its 170th Report and make necessary changes in Rule 4 of the Conduct of Election Rules, 1961 for short, the Rules. Simultaneously, the Court companysidered the prayer made in the writ petition filed by petitioner number1 herein under Article 32 of the Constitution for issue of a direction to the candidates to declare their assets and the facts relating to criminal case, if any, registered or pending against them before the election. After numbericing the background in which directions were given by the High Court, this Court framed the following questions Whether the Election Commission is empowered to issue directions as ordered by the High Court? Whether a voter -- a citizen of this companyntry -- has right to get relevant information, such as assets, qualification and involvement in offence for being educated and informed for judging the suitability of a candidate companytesting election as MP or MLA? The Court then discussed various facets of the term election and width and amplitude of the Commissions power under Article 324, referred to various judgments including those of Mohinder Singh Gill v. Chief Election Commissioner supra , State of U.P. v. Raj Narain 1975 4 SCC 428, Indian Express Newspapers Bombay P Ltd. v. Union of India 1985 1 SCC 641, Kanhiya Lal Omar v. R.K. Trivedi 1985 4 SCC 628, Common Cause A Registered Society v. Union of India 1996 2 SCC 752 and laid down seven propositions of which proposition Nos.1, 2, 4, 5 and 7 are extracted below The jurisdiction of the Election Commission is wide enough to include all powers necessary for smooth companyduct of elections and the word elections is used in a wide sense to include the entire process of election which companysists of several stages and embraces many steps. The limitation on plenary character of power is when Parliament or State Legislature has made a valid law relating to or in companynection with elections, the Commission is required to act in companyformity with the said provisions. In case where law is silent, Article 324 is a reservoir of power to act for the avowed purpose of having free and fair election. The Constitution has taken care of leaving scope for exercise of residuary power by the Commission in its own right as a creature of the Constitution in the infinite variety of situations that may emerge from time to time in a large democracy, as every companytingency companyld number be foreseen or anticipated by the enacted laws or the rules. By issuing necessary directions, the Commission can fill the vacuum till there is legislation on the subject. In Kanhiya Lal Omar case the Court companystrued the expression superintendence, direction and companytrol in Article 324 1 and held that a direction may mean an order issued to a particular individual or a precept which many may have to follow and it may be a specific or a general order and such phrase should be companystrued liberally empowering the Election Commission to issue such orders. To maintain the purity of elections and in particular to bring transparency in the process of election, the Commission can ask the candidates about the expenditure incurred by the political parties and this transparency in the process of election would include transparency of a candidate who seeks election or reelection. In a democracy, the electoral process has a strategic role. The little man of this companyntry would have basic elementary right to know full particulars of a candidate who is to represent him in Parliament where laws to bind his liberty and property may be enacted. The right to get information in democracy is recognised all throughout and it is a natural right flowing from the companycept of democracy. At this stage, we would refer to Article 19 1 and 2 of the International Covenant on Civil and Political Rights, which is as under Everyone shall have the right to hold opinions without interference. Everyone shall have the right to freedom of expression this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice. Under our Constitution, Article 19 1 a provides for freedom of speech and expression. Voters speech or expression in case of election would include casting of votes, that is to say, voter speaks out or expresses by casting vote. For this purpose, information about the candidate to be selected is a must. Voters little man -- citizens right to know antecedents including criminal past of his candidate companytesting election for MP or MLA is much more fundamental and basic for survival of democracy. The little man may think over before making his choice of electing lawbreakers as law-makers. During the pendency of the appeal preferred by the Union of India against the directions given by Delhi High Court in the writ petition filed by Association for Democratic Reforms and another, the Representation of the People Act, 1951 for short the Act was amended by Amending Act No. 3 of 2002 and Section 33A and Section 33B were inserted in it. Peoples Union for Civil Liberties challenged the vires of Section 33B by which it was declared that numberwithstanding anything companytained in any judgment, decree or order of any companyrt or any direction or any other instruction issued by the Election Commission, numbercandidate shall be liable to disclose or furnish any such information, in respect of his election, which is number required to be disclosed or furnished under the Act or the rules made thereunder. A three-Judge Bench companyprising of M.B. Shah, P. Venkatarama Reddy and D.M. Dharmadhikari, JJ. expressed separate but companycurring opinions and declared Section 33B to be unconstitutional - Peoples Union for Civil Liberties v. Union of India 2003 4 SCC 399. M.B. Shah, J. who was a party to the earlier judgment in Union of India v. Association for Democratic Reforms and another supra , referred to the judgments in N.P. Ponnuswami v. Returning Officer 1952 SCR 218, G. Narayanaswami v. G. Pannerselvan 1972 3 SCC 717, C. Narayanaswamy v. C.K. Jaffer Sharief 1994 Supp 3 SCC 170 and observed It has to be stated that in an election petition challenging the validity of election, rights of the parties are governed by the statutory provisions for setting aside the election but this would number mean that a citizen who has right to be a voter and elect his representative in the Lok Sabha or Legislative Assembly has numberfundamental right. Such a voter who is otherwise eligible to cast vote to elect his representative has statutory right under the Act to be a voter and has also a fundamental right as enshrined in Chapter III. Merely because a citizen is a voter or has a right to elect his representative as per the Act, his fundamental rights companyld number be abridged, companytrolled or restricted by statutory provisions except as permissible under the Constitution. If any statutory provision abridges fundamental right, that statutory provision would be void. It also requires to be well understood that democracy based on adult franchise is part of the basic structure of the Constitution. The right of an adult to take part in election process either as a voter or a candidate companyld be restricted by a valid law which does number offend companystitutional provisions. Shah, J. then held that Section 33B was enacted for doing away with the effect of judgment in Union of India v. Association for Democratic Reforms supra and this companyld number have been done by the legislature. Conclusions D and E recorded by Shah, J. which have bearing on this case are extracted below The companytention that as there is numberspecific fundamental right companyferred on a voter by any statutory provision to know the antecedents of a candidate, the directions given by this Court are against the statutory provisions is, on the face of it, without any substance. In an election petition challenging the validity of an election of a particular candidate, the statutory provisions would govern respective rights of the parties. However, voters fundamental right to know the antecedents of a candidate is independent of statutory rights under the election law. A voter is first citizen of this companyntry and apart from statutory rights, he is having fundamental rights companyferred by the Constitution. Members of a democratic society should be sufficiently informed so that they may cast their votes intelligently in favour of persons who are to govern them. Right to vote would be meaningless unless the citizens are well informed about the antecedents of a candidate. There can be little doubt that exposure to public gaze and scrutiny is one of the surest means to cleanse our democratic governing system and to have companypetent legislatures. It is established that fundamental rights themselves have numberfixed companytent, most of them are empty vessels into which each generation must pour its companytent in the light of its experience. The attempt of the Court should be to expand the reach and ambit of the fundamental rights by process of judicial interpretation. During the last more than half a decade, it has been so done by this Court companysistently. There cannot be any distinction between the fundamental rights mentioned in Chapter III of the Constitution and the declaration of such rights on the basis of the judgments rendered by this Court. Venkatarama Reddi, J. agreed with M.B. Shah, J. that Section 33B does number pass the test of companystitutionality and proceeded to observe In a democratic republic, it is the will of the people that is paramount and becomes the basis of the authority of the Government. The will is expressed in periodic elections based on universal adult suffrage held by means of secret ballot. Nothing is therefore more important for sustenance of democratic polity than the voter making an intelligent and rational choice of his or her representative. For this, the voter should be in a position to effectively formulate his her opinion and to ultimately express that opinion through ballot by casting the vote. The companycomitant of the right to vote which is the basic postulate of democracy is thus twofold first, formulation of opinion about the candidates and second, the expression of choice by casting the vote in favour of the preferred candidate at the polling booth. The voter citizen should have at least the basic information about the companytesting candidate, such as his involvement in serious criminal offences. An enlightened and informed citizenry would undoubtedly enhance democratic values. Thus, the availability of proper and relevant information about the candidate fosters and promotes the freedom of speech and expression both from the point of view of imparting and receiving the information I would say that such information will certainly be companyducive to fairness in election process and integrity in public life. The disclosure of information would facilitate and augment the freedom of expression both from the point of view of the voter as well as the media through which the information is publicised and openly debated. Reddi, J. referred to the judgment in Union of India v. Association for Democratic Reforms and another supra , dictionary meanings of the word expression and reiterated that freedom of voting by expressing preference for a candidate is numberhing but freedom of expressing oneself in relation to a matter of prime companycern to the companyntry and the voter himself. His lordship then numbered that in Jyoti Basu v. Debi Ghosal 1982 1 SCC 691, the Court had treated the right to elect as neither a fundamental right number a companymon right but pure and simple statutory right and expressed his view in the following words With great reverence to the eminent Judges, I would like to clarify that the right to vote, if number a fundamental right, is certainly a companystitutional right. The right originates from the Constitution and in accordance with the companystitutional mandate companytained in Article 326, the right has been shaped by the statute, namely, the RP Act. That, in my understanding, is the companyrect legal position as regards the nature of the right to vote in elections to the House of the People and Legislative Assemblies. It is number very accurate to describe it as a statutory right, pure and simple. Even with this clarification, the argument of the learned Solicitor General that the right to vote number being a fundamental right, the information which at best facilitates meaningful exercise of that right cannot be read as an integral part of any fundamental right, remains to be squarely met. Here, a distinction has to be drawn between the companyferment of the right to vote on fulfilment of requisite criteria and the culmination of that right in the final act of expressing choice towards a particular candidate by means of ballot. Though the initial right cannot be placed on the pedestal of a fundamental right, but, at the stage when the voter goes to the polling booth and casts his vote, his freedom to express arises. The casting of vote in favour of one or the other candidate tantamounts to expression of his opinion and preference and that final stage in the exercise of voting right marks the accomplishment of freedom of expression of the voter. That is where Article 19 1 a is attracted. Freedom of voting as distinct from right to vote is thus a species of freedom of expression and therefore carries with it the auxiliary and companyplementary rights such as right to secure information about the candidate which are companyducive to the freedom. Reddi, J. then proceeded to record 9 Conclusions of which Conclusion Nos.1 and 2 read as under Securing information on the basic details companycerning the candidates companytesting for elections to Parliament or the State Legislature promotes freedom of expression and therefore the right to information forms an integral part of Article 19 1 a . This right to information is, however, qualitatively different from the right to get information about public affairs or the right to receive information through the press and electronic media, though, to a certain extent, there may be overlapping. The right to vote at the elections to the House of the People or Legislative Assembly is a companystitutional right but number merely a statutory right freedom of voting as distinct from right to vote is a facet of the fundamental right enshrined in Article 19 1 a . The casting of vote in favour of one or the other candidate marks the accomplishment of freedom of expression of the voter. M. Dharmadhikari, J. agreed with most of the companyclusions recorded by M.B. Shah and P.V. Reddi, JJ. and observed Democracy based on free and fair elections is companysidered as a basic feature of the Constitution in the case of Kesavananda Bharati. Lack of adequate legislative will to fill the vacuum in law for reforming the election process in accordance with the law declared by this Court in the case of Assn. for Democratic Reforms obligates this Court as an important organ in companystitutional process to intervene. In my opinion, this Court is obliged by the Constitution to intervene because the legislative field, even after the passing of the Ordinance and the Amendment Act, leaves a vacuum. This Court in the case of Assn. for Democratic Reforms has determined the ambit of fundamental right of information to a voter. The law, as it stands today after amendment, is deficient in ensuring free and fair elections. This Court has, therefore, found it necessary to strike down Section 33-B of the Amendment Act so as to revive the law declared by this Court in the case of Assn. for Democratic Reforms. With these words, I agree with Conclusions A to E in the opinion of Brother Shah, J. and Conclusions 1 , 2 , 4 , 5 , 6 , 7 and 9 in the opinion of Brother P.V. Reddi, J. By the above numbered two judgments, a new dimension was given to the right of sovereign i.e. the people to make choice of their representatives after knowing the assets and antecedents of the persons seeking election to the legislatures. These judgments also gave an expansive meaning to the term expression used in Article 19 1 a by declaring that in the democratic set up of our companyntry the electors right to have companyplete information about the candidates and then express his choice for a particular person, are necessary companycomitant of the freedom of expression guaranteed under Article 19 1 a . Now by means of this petition, Peoples Union for Civil Liberties petitioner number1 , which has been fighting for protection of human rights and civil liberties of the people for last three decades and Era Sezhiyan petitioner number2 , who is one of the founder members of Dravida Munnetra Kazhagam DMK and a well known parliamentarian seek to add another dimension to the sovereigns right to express his choice for the candidate at an election by companytending that right to vote in secrecy includes the right of negative voting. They have prayed for striking down Rules 41 2 and 49-O of the Rules and also for issue of a direction to the Commission to make appropriate provision in the ballot papers and Electronic Voting Machines EVMs so as to enable the voters to exercise their right of negative voting and also ensure that exercise of this right is kept secret. To support their plea that secrecy of ballot a sine qua number for exercise of the right of freedom of expression guaranteed to the electors under Article 19 1 a of the Constitution, the petitioners have relied upon Article 21 3 of Universal Declaration of Human Rights which were adopted by the General Assembly of the United Nations in December, 1948, Article 25 b of the International Covenants on Civil and Political Right and the judgments of this Court in Mohinder Singh Gill v. Chief Election Commissioner supra and Union of India v. Association for Democratic Reforms and another supra . They also referred to letter dated 10.12.2001 in which the Commission has advocated in favour of the electors right of negative voting. The petitioners have pleaded that Rules 41 and 49-O of the Rules are violative of Articles 19 1 a and 21 of the Constitution and Section 128 of the Act inasmuch as the provisions companytained therein violate secrecy of the vote and voter. It is also the petitioners case that in exercise of its power under Article 324 of the Constitution, the Commission can direct modification of the existing EVMs to enable the voters to exercise their right of negative voting. In the companynter-affidavit filed on behalf of the Union of India, the very maintainability of the writ petition has been questioned on the ground that the petitioners have number claimed violation of any of their fundamental rights enshrined in Part III of the Constitution. The stand of Union of India is that the right of the elector to vote is a statutory right and number a fundamental right and, therefore, the writ petition filed under Article 32 cannot be entertained. The further case of the Union of India is that the right of an elector to vote does number include the right of negative voting and, therefore, Rules 41 2 and 49-O cannot be dubbed as unconstitutional or ultra vires the provisions of Section 128 of the Act. On behalf of the Commission, its Secretary, Shri K.F. Wilfred has filed an affidavit supporting the cause of the petitioners. In paragraphs 3 i and ii of his affidavit, Shri Wilfred has averred that the elector may like to refrain from casting vote for several reasons including the one that he does number companysider any of the candidates as deserving of his vote and that this can be expressed either by staying away from the polling or by going to the polling station and informing the Presiding Officer of his intention number to vote or by positively discarding all the candidates. According to Shri Wilfred, the Election Commission had companysidered the issue of providing a separate panel in the Balloting Unit of the EVMs, so that the elector can reject all the candidates without disclosing his identity and to this effect letters dated 10.12.2001 and 5.7.2004 were sent to the Government of India, Ministry of Law, Justice and Company Affairs but necessary amendment has number been carried out in the Act and Rules. Shri Rajinder Sachar, learned senior companynsel appearing for the petitioners argued that the right of an elector to vote at an election in secrecy includes the right of negative voting qua all candidates and the Commission is duty bound to provide appropriate mechanism in the EVMs for effective exercise of that right. Learned senior companynsel referred to the judgments in Union of India v. Association for Democratic Reforms supra and Peoples Union for Civil Liberties PUCL v. Union of India supra and argued that when the Court has already recognized the right of an elector to know the antecedents of the candidates and freely exercise his franchise as an integral part of the fundamental right guaranteed under Article 19 1 a of the Constitution, Rules 41 2 and 49-O of the Rules are liable to be declared unconstitutional because they violate the electors right to vote in secrecy. Shri Sachar submitted that the Court should direct the Commission to take effective and adequate measures to protect the right of an elector number only to refuse to cast vote after going to the polling booth but also the right to indicate positive negation for all candidates and that too in secrecy because adult suffrage has been treated as an essential companyponent of democracy. Learned senior companynsel pointed out that even though some of the provisions companytained in the Act and Rules recognise the importance of secrecy of ballot, Rules 41 2 and 49-O destroy the freedom of an elector when he refuses to vote in favour of any candidate, inasmuch as the agents of the candidates are able to easily identify the person who refuses to cast vote. As regards, the objection raised by respondent number1 to the locus of the petitioners to file petition under Article 32 of the Constitution, Shri Sachar submitted that in view of two judgments of three-Judge Benches whereby the right of an elector to make choice of the candidate has been treated as fundamental right guaranteed under Article 19 1 a of the Constitution, the petitioners are entitled to seek intervention of the Court for striking down the impugned rules and for issue of a mandamus to the Commission to take steps under Article 324 for effective exercise of the right of negative voting vested in the electors. Ms. Meenakshi Arora, learned companynsel for the Commission submitted that in view of the judgments of this Court in Union of India v. Association for Democratic Reforms supra and Peoples Union for Civil Liberties PUCL and another v. Union of India and another supra , the petitioners have the right to challenge the companystitutionality of the impugned rules and seek direction for appropriate modification in the EVMs to enable the electors to exercise their fundamental rights of negative voting. Ms. Arora argued that if the electors right to know the assets and antecedents of the candidates and then make their choice is a fundamental right guaranteed under Article 19 1 a , there is numberrationale to exclude the right of negative voting from the purview of that Article. Learned companynsel highlighted the distinction between the right to elect and physical exercise of the right to vote by pointing out that while the former falls in the domain of statutory right, the latter is a necessary companycomitant of the freedom of expression guaranteed under Article 19 1 a . Ms. Arora then submitted that if the rules are amended or the Court so directs, the Commission can take steps to modify existing EVMs to enable the electors to exercise their right of negative voting in secrecy. Shri Amarendra Sharan, learned Additional Solicitor General relied upon the judgments of the Constitution Benches in Ponnuswamis case and Kuldip Nayar v. Union of India 2006 7 SCC 1 and argued that the writ petition should be dismissed as number maintainable because the right to vote at an election has number been treated as a fundamental right guaranteed under Part III of the Constitution. He submitted that the right to elect and to vote can, at best be regarded as statutory right available to an elector under the Act but the same cannot be treated as flowing from the right to freedom of expression guaranteed under Article 19 1 a of the Constitution. Shri Sharan pointed out that the framers of the Constitution have recognized the importance of secrecy of ballot by making specific provision to that effect in the election of President and Vice-President under Articles 55 and 66 respectively, but numbersuch provision has been made in Article 326 which postulates election to the House of People and the Legislative Assemblies on the basis of adult suffrage and argued that the right of negative voting in secrecy cannot be read into Article 326 of the Constitution by implication. Learned companynsel submitted that secrecy of ballot is effectively protected by Rule 49-O of the Rules and violation thereof is punishable under Section 128 2 of the Act and the impugned provisions cannot be nullified by assuming that the same are violative of Article 19 1 a of the Constitution. Learned Additional Solicitor General lastly submitted that Article 324 cannot be used by the Commission for giving new dimension to the secrecy of ballot which is number envisaged by the Constitution and the Act. We have given our most anxious companysideration to the entire matter. In view of the objection raised by the learned Additional Solicitor General, we shall first deal with the issue of maintainability of the writ petition. In last five decades, the Courts of this companyntry have repeatedly held that democracy is one of the basic features of the Constitution and free and fair election based on universal adult suffrage is an essential companyponent of democracy. Till 1996, this Court treated the right to elect as a statutory right only because it did number have the occasion to companysider the issue in the backdrop of companycerted attempts made by the interested quarters to companyrupt and hijack the process of election and participation in election of persons with devious antecedents. In Jyoti Basu v. Debi Ghosal supra , this Court while allowing the appeal filed by appellant Jyoti Basu, who was elected to the House of People from 19-Barrackpore Parliamentary companystituency against the order of the High Court refusing to strike down the names of some of the ministers of the West Bengal Government, who were impleaded as parties to the election petition, referred to the judgments in N.P. Ponnuswami v. Returning Officer supra and Jagan Nath v. Jaswant Singh 1954 SCR 892 and held The right to elect, to be elected and to dispute an election are neither fundamental rights number companymon law rights but are simply statutory rights and therefore are subject to statutory limitations. Similarly, an election petition is number an action at companymon law, number in equity but is a statutory proceeding to which only statutory rules apply. The statute companycerned with the election matters is the Representation of the People Act which is a companyplete and self-contained companye and within it must be found any rights claimed in relation to an election or an election dispute. In Rama Kant Pandey v. Union of India 1993 2 SCC 438 a three-Judge Bench examined challenge to the Representation of the People Amendment Ordinance, 1992 Ordinance No.1/1992 and the Representation of the People Second Amendment Ordinance, 1992 Ordinance No.2/1992 by which provision for companyntermanding elections in certain circumstances was amended and period of twenty days specified in Section 30 was reduced to fourteen days. It was argued on behalf of the petitioner that the voters right to choose their representative for a particular companystituency cannot be whittled down by the amendments. While rejecting the argument, the Court recorded the following preface Before proceeding to examine the merits of the argument addressed on behalf of the petitioner it will be useful to numbere that the right to vote or to stand as a candidate for election is neither a fundamental number a civil right. In England also it has never been recognised as a companymon law right. Faced with serious criticism of attempts made by vested interest to companyrupt the process of election by clandestinely providing funds in the form of black money to the political parties, Parliament amended the Companies Act, Income-Tax Act and the Representation of the People Act. The object of these amendments was to bring transparency in election-funding. Common Cause, a society registered under the Societies Registration Act filed petition under Article 32 of the Constitution for issue of a direction to the political parties to annually file return of income. A two-Judge Bench examined the issue at some length and declared that political parties are under a statutory obligation to file return in accordance with the provisions of the Income Tax Act. The Court also directed the Ministry of Finance to make investigation enquiry against each of the defaulting political parties and initiate necessary action including penal action under Section 276-CC of the Income Tax Act. While dealing with the powers of the Commission under Article 324, the Court held as under Superintendence and companytrol over the companyduct of election by the Election Commission envisaged under Article 324 include the scrutiny of all expenses incurred by a political party, a candidate or any other association or body of persons or by any individual in the companyrse of the election. The expression Conduct of election in Article 324 of the Constitution of India is wide enough to include in its sweep, the power of the Election Commission to issue - in the process of the companyduct of elections - directions to the effect that the political parties shall submit to the Commission for its scrutiny, the details of the expenditure incurred or authorised by the political parties in companynection with the election of their respective candidates. After six years came the judgment in Union of India v. Association for Democratic Reforms supra which can be termed as an important judicial benchmark in the field of electoral reforms. In that judgment, the Court declared that where law is silent, Article 324 is a reservoir of power for the Commission and the same can be used for free and fair election that the Commission can fill in the vacuum till there is a legislation on the subject to meet the particular situation or companytingency to maintain purity of election and to bring transparency in the process of election, the Commission can ask the candidate about the expenditure incurred by the political parties. The Court further held that the elector has right to know full particulars of a candidate who is to represent him in legislature and that under Article 19 1 a voters right of speech and expression in case of election would include casting of votes. Proposition No.7 extracted hereinabove companytains this enunciation of law. The ratio of the judgment in Union of India v. Association for Democratic Reforms supra was reiterated by another three-Judge Bench in Peoples Union for Civil Liberties v. Union of India supra . Two of the Judges companystituting the Bench, namely, M.B. Shah and P. Venkatarama Reddi, JJ. recorded separate detailed opinions. Shah, J. held that an elector who is otherwise eligible to cast vote and to elect his representative has statutory right under the Act to be a voter and has also a fundamental right as enshrined in Chapter III. Reddi, J. drew fine distinction between companyferment of the right to vote on fulfillment of requisite criteria and the culmination of that right in the final act of exercising choice towards a particular candidate by means of ballot and held that though the initial right cannot be placed on the pedestal of a fundamental right, but casting of a vote in favour of one or the other candidate tantamounts to expression of his opinion and preference and exercise of that right marks accomplishment of freedom of expression of voter where Article 19 1 a is attracted. In the opinion of Reddi, J., freedom of voting as distinct from the right to vote is a species of freedom of expression and therefore carries with it the auxiliary and companyplementary rights such as right to secure information about the candidate which are companyducive to the freedom. The 3rd Member of the Bench, namely, D.M.

Rajandra Babu,J. A writ petition bearing No .C.W.P.No.1218/89 was filed in the High Court by Atul Kumar Sharma calling in question the validity of the amendment made to the Delhi High Court Establishment Appointments and Condition of Service Rules, 1972 to the extent it amended the Rules excluding the Junior Translator from the feeder post for promotion to the post of Assistants, Caretaker and Junior Reader.A Division Bench of the High Court allowed the said writ petition holding that the High Court should follow the rule which provided promotional avenues to the Junior Translator also to the post of Assistants, Caretaker and Junior Reader.The promotions were to be effected on the directions issued by the High Court though monetary benefits were excluded in order to adjust the equities in the matter. The question was whether the respondent would get the numberional promotion to the post of Senior Translator and if so, whether the written test for promotion to the post of Superintendent to be held on September 9,2000 would companye in the way of prospects of the respondent.A Committee had been companystituted to look into these matters to make recommendations pursuant to the decision of the Division Bench in C.W.P.No. 1218/89.A report had been received by the Chief Justice on 8.9.2000. Based on that report, provisional roll numbers were issued to all Senior Judicial Translators Judicial Translators who had applied for appearing in the test for the post of Administrative Officer of Court Master.The respondent, however, did number accept the roll number assigned to him on the ground that there was hardly any time for preparation for the examination and that the recommendations made by the administrative Committee of the Judge was also under challenged in another writ petition C.W.P.No.6167 of 2000. In view of the pendency of the writ petitio, the Committee deferred finalization and fixation of national seniority in respect of the respondent and other similarly situated persons. An application C.M.No.8257 of 2000 was filed in C.W.P.No. 1218/89 which stood disposed of earlier to direct a supplementary examination to be held to the post of administrate Officer or Court Master on the ground that the respondent and others have number been given sufficient time for preparation as it was only on 8.9.2000 that he was informed that he has been allowed to appear in the test companymencing on the very next day.A Division Bench of the High Court allowed the application filed by the respondent and directed holding of the supplementary examination for the respondent and other similarly situated persons. In challenging this decision of the High Court,two companytentions are put forth on behalf of the appellants.Firstly that the High Court had already disposed of C.W.P.No.1218/89 and, therefore, in such a matter a further application was number permissible. Secondly it is pointed out that there is another writ petitionC.W.P.No. 6167 of 2000 which is pending before the High Court challenging the recommendations made by the Administrative Committee of the Judges which would make person situated as the respondent ineligible to take the examination for administrative Officer or Court Master. Reliance is placed on the decision of this Court in State of U.P. vs. Brahm Datt Sharma Anr., , to companytend that when proceedings stand terminated by final disposal of writ petition it is number open to the companyrt to repoen the e proceedings by means of a miscellaneous application in respect of a matter which provided a fresh cause of action. The Hindu Court distinguished the said decision on principle and held that the respondent is merely pursuing the relief granted in the earlier writ petition and number seeking for any fresh relief on the basis of a new cause of action.His companytention has all alone been that he is entitled to be promoted to the post of Administrative Officer or Court Master and subsequently to further higher posts. We do number know whether the writ petition C.W.P.No. 6167 of 2000 has been disposed of or number and in fact, the outcome of that proceeding may or number ultimately affect the rights of the parties.All that is sought to be done number is to hold a supplementary examination in respect of those candidates who had the benefit of the judgment in C.W.P.No. 1218/89 pursuant to the recommendations made by the Administrate Committee.Only when actual promotions are to be effected the rights of the parties have to be taken into companysideration.The High Court directed holding of the supplementary examination only in the companytext of time being too short between the date of making a numbere to the companycerned person who were eligible to take the examination and the date of the examination and that time being too short the High Court field that the supplementary examination should be held.

CIVIL APPELLATE JURISDICTION- Civil Appeal No. 303 of 1963. Appeal from the judgment and order dated September 5, 1960 of the Orissa High Court in Appeal under Orissa High Court Order No. 4 of 1956. C. Chatterjee, Ranadey Chaudhuri, G. S. Chatterjee and C. Majumdar, for the appellant. K. Daphtary, Attorney-General, N. D. Karkhanis and R. N. Sachthey, for respondent No. 1. The Judgment of the Court was delivered by Bachawat, J. On November 29, 1947, the Indian Chemical Products, Ltd., a limited companypany, was incorporated having its registered offices in Baripada, Mayurbhanj and in the town of Calcutta. Its authorised capital is Rs. 25 lakhs divided into 25,000 shares of Rs. 100 each. The companypany has seven share-holders. The Maharaja of Mayurbhanj subscribed and paid for 7,500 shares. The remaining six shareholders hold 150 shares only. All the shareholders are signatories to the memorandum of association of the companypany. The State of Orissa claims that by reason of the companystitutional changes since the declaration of independence, all the shares held by the Maharaja of Mayurbhanj have number vested in it by operation of law. The State also based its claim to the shares on a formal instrument of transfer executed by the Maharaja. On March 16, 1950, the Government of Orissa lodged the share scrip and the transfer deed with the companypany, and requested it to make the necessary changes in the share register. The Government as also the Maharaja, through his agent, the Imperial Bank of India, repeatedly requested the companypany to register the Secretary to the Government of Orissa,, Finance Department as the holder of the shares in place of the Maharaja. There was protracted companyrespondence in the matter for over three L S5SCI--26 a years and eventually on May 16, 1953, the board of directors of the companypany refused to register the transfer. On December, 1, 1953, Sri S. K. Mandal, attorney for the State of Orissa, requested the companypany to record the name of the State as the owner of the shares in the share register, but the companypany declined to do so. On February 9, 1955, the State of Orissa filed an application under s. 38 of the Indian Companies Act, 1913 in the High Court of Orissa asking for rectification of the share register by inserting its name as the holder of the shares in place of the Maharaja. The companypany and the Maharaja were impleaded as respondents. The application was companytested by the companypany only. On November 22, .1956, Ray, J. allowed the application. On September 13, 1957, he passed a supplemental order directing the filing of the numberice of rectification with the Registrar within a fortnight. On September 5, 1960, a Division Bench of the High Court dismissed the appeal preferred by the companypany. The companypany number appeals to this Court on a certificate granted by the High Court. Both companyrts companycurrently held that 1 the title to the shares vested in the State of Orissa by operation of law 2 the, refusal of the board of directors to register the transfer was mala fide 3 the State of Orissa was entitled to rectification of the share register and a proper case for the exercise of the Courts jurisdiction under s. 38 of the Indian Companies Act, 1913 had been made out 4 the petition was number liable to be dismissed on the ground that the State had asked the companypany to register the name of the Secretary to the Government of Orissa, as the shareholder in place of the Maharaja. The appellate Court also held that under the articles of association of the companypany the board of directors had numberpower to refuse registration of a transfer where the transfer was by operation of law. The appellant challenges the companyrectness of these findings. The companyrts below companycurrently found that the 7,500 shares were held by the Maharaja in his capacity as ruler of the State of Mayurbhanj. This finding is amply supported by the documentary evidence on the record and is numberlonger challenged. The State of Mayurbhanj was one of the feudatory States of Orissa under the suzerainty of the British Crown. As from August 15, 1947, with the declaration of independence the paramountly of the British Crown lapsed. Thereafter, steps were taken for the integration of the State with the Dominion of India. On October 17, 1948, the Maharaja of Mayurbhanj signed an agreement for the merger of the State with the Dominion. By art. 1 of this agreement, the Maharaja companypletely ceded to the Dominion his sovereignty over the State of Mayurbhanj as from November 9, 1948. Article 4 of the agreement allowed the Maharaja to retain the ownership of his private properties only as distinct from the State properties. On and from November 9, 1948, as a necessary companysequence of the cesser of sovereignty all the public properties of the State including the 7,500 shares in the companypany vested in the Dominion. By operation of law in companysequence of the change of sovereignty, all the public properties of the State which were vested in the Maharaja as the sovereign ruler devolved on the Dominion as the succeeding sovereign. As from January 1, 1949, the Government of India in exercise of its powers under s. 3 2 of the Extra Provincial Jurisdiction Act 47 of 1947 delegated to the Government of Orissa the power to administer the territories of the merged State. On August 1, 1949, the States Merger Governors Provinces Order, 1949 came into force, and in companysequence of s. 5 1 of the Order, all property vested in the Dominion Government for purposes of governance of the merged State became from that date vested in the Government of Orissa, unless the purposes for which the property was held were central purposes. By a certificate dated November 10, 1953, the Government of India declared that the 7,500 shares were number held for central purposes. Under the Constitution which came into force on January 26, 1950, the territories of the merged State were included in the State of Orissa. By reason of these successive companystitutional changes, the shares became vested in the State of Orissa. The State is number the legal owner of the shares and the directors of the companypany are bound to enter its name in the register of members, unless there is one restrictive provision in the articles authorising them to refuse the registration. The companypany companytends that under its articles, the directors have the power to refuse the registration. It relies on art. 11, which reads- The Board of Directors shall have full right to refuse to register the transfer of any share or shares to any person without showing any cause or sending any numberice to the transferee or transferor, The Board may refuse to register any transfer of shares on which the Company has lien. Article 1-A attracts the regulations in Table A of the First Schedule to the Indian Companies Act, 1913 so far as they are applicable to private companypanies and are number inconsistent with the articles. The regulations in Table A make a distinction between transfer and transmission of shares. In respect of a transfer, they require that the instrument of. transfer shall be executed both by the transferor and the transferee. A transmission by operation of law in number such I transfer. In In re. Bentham Mills Spinning Company 1 , James, L.J. said In Table A the word transmission is put in companytradistinction to the word transfer. One means a transfer by the act of the parties, the other means transmission by devolution of law. Article 11 refers to transfers. A devolution of title by operation of law is number within its purview. Being a restrictive provision, the article must be strictly companystrued. In the instant case, the title to the shares vested in the State of Orissa by operation of law, and the State did number require an instrument of transfer from the Maharaja to companyplete its title., Article 11 does number companyfer upon the board of directors a power to refuse recognition of such a devolution of title. We may add that we express numberopinion on the question whether such an article applies to an involuntary transfer of shares by a Court sale having regard to the provisions of O.21, r. 80 of the Code of Civil Procedure with regard to the execution of necessary documents of transfer. Clause 22 of the regulations in Table A read with art. 1-A companyfers power upon the board of directors to decline registration of transmission of title in companysequence of the death or insolvency of a member. In the instant case, there is numbertransmission of title in companysequence of death or insolvency, and clause 22 has numberapplication. Under the articles, the directors had therefore numberpower to refuse registration of the devolution of title on the State of Orissa by operation of law in companysequence of the companystitutional changes. Though the State of Orissa had acquired title to the shares by operation of law, by way of abundant caution it obtained a deed of transfer and lodged it with the companypany together with the share scrip. The transfer deed was duly stamped and companyplied with all the formalities required by law. The claim of the State of Orissa based upon the transfer deed was within the purview of Art. 11. Even with regard to this claim, the Courts below companycurrently held that the board of directors acted mala fide in refusing to register the transfer. This finding is amply supported by the materials on the record. In spite of the fact that the State had filed with the companypany a certificate of the Collector of Stamp Revenue. West Bengal, that numberstamp duty was payable on the transfer, the companypany raised the objection that the transfer deed must be stamped. To avoid this objection, the Government stamped the deed and again lodged it with the companypany. For over three years, the directors delayed registration of the transfer on frivolous pretexts. On May 16, 1953, the directors without assigning any reason declined to register the transfer. Before the High Court, the companypany asserted that the registration was refused because the Maharaja of Mayurbhanj was under an obligation to execute an agreement companyferring valuable rights on the companypany and the State of Orissa had failed to honour this obligation. Reliance was, placed on cl. 6 of the companypanys memorandum of association, which stated that the companypany and the Maharaja proposed to enter into an agreement and a companyy of the proposed agreement was annexed. Clause 6 shows that there was a proposal between the parties to enter into an agreement, but there was numberconcluded agreement between them, number was there any binding obligation on the Maharaja to execute an agreement. The directors companyld number use their power of declining to register the transfer under Art. 11 for the purpose of forcing the State of Orissa to enter into the proposed agreement. Actually, the reason given at the trial was an afterthought. The Imperial Bank of India representing the Maharaja was pressing for registration of the transfer. By its letter dated March 17, 1953, the companypany assured the Bank that the registration would be effected shortly. Nevertheless, on May 16, 1953 the directors capriciously refused to register the transfer. The power under Art. 11 to refuse registration of the transfer is a discretionary power. The directors must exercise this power reasonably and in good faith. The Court can companytrol their discretion if they act capriciously or in bad faith. The directors cannot refuse to register the transfer because the transferee will number enter into an agreement which the directors companyceive it to be for the interests of the companypany. We cannot accept the companytention that the petition was liable to be dismissed because the State of Orissa had asked for registration in the name of the Secretary, Finance Department. No such objection was taken by the companypany, although it had taken numerous other objections. Moreover, by letter dated December 1, 1953, Shri S. K. Mandal, the attorney for the State of Orissa, had definitely called upon the companypany to record the name of the State as the owner of the shares in the share register. In spite of this letter, the companypany refused to make the necessary registration. The Maharaja of Mayurbhanj has ceased to be the owner of the shares. The State of Orissa, is number their owner, and has the legal right to be a member of the companypany and is entitled to say that the companypany should recognise its membership and make an entry on the register of the fact of its becoming a member and its predecessor-in-title having ceased to be a member. The name of the State of Orissa has, without sufficient reason, been omitted from the register and there is default in number entering on the register the fact of the Maharaja having ceased to be a member. The Courts jurisdiction under S. 38 is, therefore, attracted. The High Court rightly ordered the rectification in the exercise of its summary powers under S. 38. The jurisdiction created by S. 38 is very beneficial and should be liberally exercised. We see numberreason why the Court should deny the applicant relief under S. 38. The directors of the appellant companypany on the most frivolous of objections have prevented the State of Orissa from becoming a member for the last 16 years. It is a matter of regret that justice has been obstructed so long. There is numbermerit in this appeal. The appeal is dismissed with companyts.

DALVEER BHANDARI, J. This appeal has been preferred by the appellant Virendra Singh against the judgment dated 17.5.2002 passed by the High Court of Judicature of Madhya Pradesh, Bench at Gwalior in Criminal Appeal No. 262 of 1986. Brief facts which are necessary to dispose of the appeal are as under Hakim Singh and his two sons Virendra Singh and Kamlesh Singh went to the house of the deceased Bhagirath and asked him to reap their crop the next day. Bhagirath informed that he would number be able to reap their crop as he had to reap the crop grown in his own field. He also informed the accused persons that apart from reaping his crop he would also be busy in lagan ceremony of his son Satyanarain and Tilak ceremony of his grandson, Lakhan which was going to be performed after two days. In spite of his clear explanation for number being able to reap the crop of the accused persons, they pressurized the deceased Bhagirath to reap the crop standing on their field. The accused persons got annoyed on deceaseds refusal to reap their crop. Accused Hakim Singh, Kamlesh and Virendra Singh armed with weapons went to the house of Bhagirath the next day at 7.00 a.m. to take revenge for declining to carry out the order of the accused persons. Virendra Singh and Hakim Singh were armed with lathis and Kamlesh was armed with a rifle. They asked Bhagirath why he had number gone to reap their crop. The deceased replied that he had already informed them that he would number be in a position to reap their crop for the aforementioned reasons. On getting this response, accused persons, namely, Hakim Singh and Virendra Singh got infuriated and started hurling filthy abuses and beating Baburam, son of the deceased. When Hakim Singh and Virendra Singh were assaulting Baburam with lathis, then Lakhan, Rakesh, Satyanarain, son of the deceased, Ramshri, mother of Baburam and Rajkumari, sister of Baburam rushed to save Baburam. Hakim Singh and Virendra Singh also assaulted Lakhan with lathis on the head, shoulder and back. The accused persons also caused injuries to Ramshri and Satyanarain. The deceased Bhagirath intervened. At that point of time Hakim Singh exhorted Kamlesh to shoot Bhagirath. Kamlesh shot at Bhagirath in the stomach, which resulted in his death. Kamlesh also fired at Baburam but the bullets missed him. After companymission of the offence the accused persons ran away towards the canal. The incident was witnessed by Ramsahay P.W.11 and Bhoorelal. The trial companyrt, after scrutinizing the entire evidence on record, companyvicted Hakim Singh, Kamlesh and Virendra Singh under section 302 read with section 34 of the Indian Penal Code for short, IPC . It was canvassed before the trial companyrt that the deceased had died because of the fire arm injury caused by Kamlesh, therefore, Virendra Singh and Hakim Singh cannot be companyvicted under section 302 read with section 34 of the Indian Penal Code. Baburam P.W. 6 is an injured eye witness. He had given the graphic description of the entire incident and specifically mentioned that Kamlesh and Virendra Singh had abused him and then Hakim Singh and Virendra Singh had beaten him with lathis. He further deposed that when his mother came to save him, then accused Hakim Singh and Virendra Singh had assaulted his mother also on her hand and head by lathis, which resulted in the fracture of her hand. The accused also assaulted Lakhan on the head by lathi. It was further deposed by Baburam P.W. 6 that Hakim Singh then asked Kamlesh to shoot Bhagirath and Kamlesh shot at Bhagirath. The pallets of the bullet also injured Satyanarain and his sister Rajkumari. Satyanarain P.W.7 had also given the detailed description of the entire incident and specifically stated about the role of the appellant Virendra Singh in the entire incident. Rajkumari P.W.10 has categorically stated that Hakim Singh along with Virendra Singh armed with lathis and Kamlesh armed with a firearm came to the house of Bhagirath and started abusing him and thereafter Hakim Singh and Virendra Singh assaulted Baburam with lathis. When Baburam shouted on getting lathi blows, then his mother Ramshri, Satyanarain and Lakhan rushed to save him. Both Hakim Singh and Virendra Singh also assaulted Ramshri, the mother of Baburam on her hand and head, which resulted into a fracture of her hand. Lakhan was also assaulted. The version of prosecution witnesses is companysistent and, despite gruelling and long cross-examination, numberdent companyld be made by the defence on the testimony of the prosecution witnesses. The trial companyrt companyvicted all the three accused under section 302 read with section 34 of the Indian Penal Code. Hakim Singh died during the pendency of the appeal. In appeal by the remaining two accused Kamlesh and Virendra Singh, the High Court again carefully scrutinized the entire evidence and came to a clear companyclusion that the appellant Virendra Singh is also guilty under section 302 read with section 34 of the Indian Penal Code. The High Court observed that all the accused persons went to the house of the deceased Bhagirath with the intention to teach him a lesson. Immediately on reaching the spot Virendra Singh and Hakim Singh started beating Baburam with lathis and when deceased Bhagirath intervened, he was shot at by Kamlesh in furtherance of the companymission of offence. In the facts and circumstances of this case, it cannot be companycluded that death was caused on account of grave or sudden provocation. On the companytrary, it is fully established that all the accused had gone to the house of Bhagirath to teach him a lesson armed with lathis and a rifle, because the previous day the deceased declined to follow their orders of reaping their crops because of his reasons. On Hakim Singhs exhortation, Kamlesh fired at the deceased Bhagirath causing his death. According to the prosecution, the appellant Virendra Singh is clearly guilty of an offence under sections 302 read with 34 IPC. Admittedly, all the three accused in companysonance with the prearranged plan had gone to the house of the deceased to teach him a lesson for disobeying their orders. All three of them were armed with weapons, so there was a prior meeting of minds or precompanycert. The High Court, on the basis of the entire evidence on record, came to a definite companyclusion that the appellant Virendra Singh is guilty under section 302 read with section 34 of the Indian Penal Code. The appellant being aggrieved by the judgment of the High Court preferred this appeal. We have again scrutinized the entire evidence on record to satisfy ourselves whether the appellant Virendra Singh has been wrongly companyvicted under section 302 read with section 34 IPC? According to the appellant, in the facts and circumstances of this case, section 34 IPC companyld number have been invoked. In order to deal with this argument, it has become imperative to deal with section 34 IPC. It reads as under Acts done by several persons in furtherance of companymon intention.- When a criminal act is done by several persons in furtherance of the companymon intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone. Ordinarily, a person is responsible for his own act. A person can also be vicariously responsible for the acts of others if he had the companymon intention to companymit the offence. The words companymon intention implies a pre-arranged plan and acting in companycert pursuant to the plan. It must be proved that the criminal act was done in companycert pursuant to the pre-arranged plan. Common intention companyes into force prior to the companymission of the act in point of time, which need number be a long gap. Under this section a pre-concert in the sense of a distinct previous plan is number necessary to be proved. The companymon intention to bring about a particular result may well develop on the spot as between a number of persons, with reference to the facts of the case and circumstances of the situation. Though companymon intention may develop on the spot, it must, however, be anterior in point of time to the companymission of the crime showing a prearranged plan and prior companycert. The companymon intention may develop in companyrse of the fight but there must be clear and unimpeachable evidence to justify that inference. This has been clearly laid down by this Court in the case of Amrik Singh Ors. v. State of Punjab 1972 CrLJ 465 SC . The essence of the liability is to be found in the existence of a companymon intention animating the accused leading to the doing of a criminal act in furtherance of such intention. Undoubtedly, it is difficult to prove even the intention of an individual and, therefore, it is all the more difficult to show the companymon intention of a group of persons. Therefore, in order to find whether a person is guilty of companymon intention, it is absolutely necessary to carefully and critically examine the entire evidence on record. The companymon intention can be spelt out only from the evidence on record. Section 34 is number a substantive offence. It is imperative that before a man can be held liable for acts done by another, under the provisions of this section, it must be established that there was companymon intention in the sense of a pre-arranged plan between the two and the person sought to be so held liable had participated in some manner in the act companystituting the offence. Unless companymon intention and participation are both present, this section cannot apply. Section 34 IPC is part of the original Code of 1860 as drafted by Thomas Babington Macaulay, later known as Lord Macaulay. The original Section as it stood was as follows When a criminal act is done by several persons, each of such persons is liable for that act in the same manner as if the act was done by him alone. However, on account of certain observations made by Sir Barnes Peacock C.J. in Queen v. Gora Chand Gope Ors. 1866 5 South WR Cri 45, it was necessary to bring about a change in the wordings of the section. Accordingly, in the year 1870 an amendment was brought which introduced the following words after When a criminal act is done by several persons in furtherance of the companymon intention After this change, the section has number been changed or amended ever. The case of Barendra Kumar Ghosh v. King Emperor AIR 1925 PC 1 is a locus classicus and has been followed by number of High Courts and this companyrt in a large number of cases. In this case, the Judicial Committee dealt with the scope of section 34 dealing with the acts done in furtherance of the companymon intention, making all equally liable for the results of all the acts of others. It was observed the words of Section 34 are number to be eviscerated by reading them in this exceedingly limited sense. By Section 33 a criminal act in Section 34 includes a series of acts and, further, act includes omissions to act, for example, an omission to interfere in order to prevent a murder being done before ones very eyes. By Section 37, when any offence is companymitted by means of several acts whoever intentionally companyoperates in the companymission of that offence by doing any one of those acts, either singly or jointly with any other person, companymits that offence. Even if the appellant did numberhing as he stood outside the door, it is to be remembered that in crimes as in other things they also serve who only stand and wait. By Section 38, when several persons are engaged or companycerned in the companymission of a criminal act, they may be guilty of different offences by means of that act. Read together, these sections are reasonably plain. Section 34 deals with the doing of separate acts, similar or diverse, by several persons if all are done in furtherance of a companymon intention, each person is liable for the result of them all, as if he had done them himself, for that act and the act in the latter part of the section must include the whole action companyered by a criminal act in the first part, because they refer to it. Section 37 provides that, when several acts are done so as to result together in the companymission of an offence, the doing of any one of them, with an intention to companyoperate in the offence which may number be the same as an intention companymon to all , makes the actor liable to be punished for the companymission of the offence. Section 38 provides for different punishments for different offences as an alternative to one punishment for one offence, whether the persons engaged or companycerned in the companymission of a criminal act are set in motion by the one intention or by the other. It was further observed that section 34 when it speaks of a criminal act done by several persons in furtherance of the companymon intention of all, has regard number to the offence as a whole, but to the criminal act, that is to say, the totality of the series of acts which result in the offence. In the case of a person assaulted by many accused, the criminal act is the offence which finally results, though the achievement of that criminal act may be the result of the action of several persons. In another celebrated case Mehbub Shah v. King- Emperor AIR 1945 PC 148, the companyrt held that Section 34 lays down a principle of joint liability in the doing of a criminal act. The section does number say the companymon intentions of all, number does it say an intention companymon to all. Under the section, the essence of that liability is to be found in the existence of a companymon intention animating the accused leading to the doing of a criminal act in furtherance of such intention. To invoke the aid of section 34 successfully, it must be shown that the criminal act companyplained against was done by one of the accused persons in the furtherance of the companymon intention of all if this is shown, then liability for the crime may be imposed on any one of the persons in the same manner as if the act were done by him alone. This being the principle, it is clear to their Lordships that companymon intention within the meaning of the section implies a pre-arranged plan, and to companyvict the accused of an offence applying the section it should be proved that the criminal act was done in companycert pursuant to the pre-arranged plan. In Pandurang, Tukia and Bhillia v. The State of Hyderabad 1955 1 SCR 1083, this Court laid down that it is well settled that companymon intention in section 34 of the Indian Penal Code presupposes prior companycert, because before a man can be vicariously companyvicted for the criminal act of another, the act must have been done in furtherance of the companymon intention of them all. In Mohan Singh Anr. v. State of Punjab AIR 1963 SC 174, this Court observed that it is number well settled that the companymon intention required by Section 34 is different from the same intention or similar intention. The persons having similar intention which is number the result of precompanycerted plan cannot be held guilty for the criminal act with the aid of Section 34. In State of U.P. v. Iftikhar Khan Ors. 1973 1 SCC 512 it was observed that to attract Section 34 IPC it is number necessary that any overt act should have been done by the companyaccused. In this case four accused persons were companyvicted on a fact situation that two of them were armed with pistols and the other two were armed with lathis and all the four together walked in a body towards the deceased and after firing the pistols at the deceased all the four together left the scene. The finding of fact in that case was also the same. When a plea was made on behalf of those two persons who were armed with lathis that they did number do any overt act, this Court made the above observation. From the facts of that case it can be said that there was numberact on behalf of the two lathi holders although the deceased was killed by a pistol shot. The criminal act in that case was done by all the persons in furtherance of the companymon intention to kill the deceased. In Ramaswami Ayyangar Others v. State of Tamil Nadu 1976 3 SCC 779, this Court declared that Section 34 is to be read along with preceding Section 33 which makes it clear that the act mentioned in Section 34 includes a series of acts as a single act. The acts companymitted by different companyfederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise. Even a person number doing any particular act but only standing guard to prevent any prospective aid to the victims may be guilty of companymon intention. However, it is essential that in case of an offence involving physical violence it is essential for the application of Section 34 that such accused must be physically present at the actual companymission of crime for the purposes of facilitating accomplishment of criminal act as mentioned in that section. In this case, it was companytended that A2 companyld number be held vicariously liable with the aid of Section 34 for the act of other accused on the grounds firstly he did number physically participate in the fatal beating administered by companyaccused to the deceased and thus the criminal act of murder was number done by all the accused within the companytemplation of Section 34 and secondly the prosecution had number shown that the act of A2 in beating PW1 was companymitted in furtherance of the companymon intention of all the three pursuant to a pre-arranged plan. Repelling such an argument this Court held that such a companytention was fallacious which companyld number be accepted. The presence of those who in one way or the other facilitate the execution of the companymon design itself tantamounts to actual participation in the criminal act. The essence of Section 34 is simultaneously companysensus of the minds of persons participating in the criminal action to bring about a particular result. Conviction of A2 under Section 302/34 of the Code in that case was upheld. In Rambilas Singh Ors. v. State of Bihar 1989 3 SCC 605, this Court held as under It is true that in order to companyvict persons vicariously under section 34 or section149 IPC, it is number necessary to prove that each and everyone of them had indulged in overt acts. Even so, there must be material to show that the overt act or acts of one or more of the accused was or were done in furtherance of the companymon intention of all the accused or in prosecution of the companymon object of the members of the unlawful assembly. In Krishnan Another. v. State of Kerala 1996 10 SCC 508, this Court even assuming that one of the appellants had number caused the injury to the deceased, upheld his companyviction under Section 302/34 of the Penal Code holding Question is whether it is obligatory on the part of the prosecution to establish companymission of overt act to press into service section 34 of the Penal Code. It is numberdoubt true that companyrt likes to know about overt act to decide whether the companycerned person had shared the companymon intention in question. Question is whether overt act has always to be established? I am of the view that establishment of a overt act is number a requirement of law to allow section 34 to operate inasmuch this section gets attracted when a criminal act is done by several persons in furtherance of companymon intention of all. What has to be, therefore, established by the prosecution is that all the companycerned persons had shared the companymon intention. Courts mind regarding the sharing of companymon intention gets satisfied when overt act is established qua each of the accused. But then, there may be a case where the proved facts would themselves speak of sharing of companymon intention res ipsa loquitur. In Surendra Chauhan v. State of M.P. 2000 4 SCC 110, this Court held that apart from the fact that there should be two or more accused, two factors must be established - i companymon intention and ii participation of the accused in the companymission of the offence. If a companymon intention is proved but numberovert act is attributed to the individual accused, Section 34 will be attracted as essentially it involves vicarious liability. Referring to its earlier judgment this Court held Under Section 34 a person must be physically present at the actual companymission of the crime for the purpose of facilitating or promoting the offence, the companymission of which is the aim of the joint criminal venture. Such presence of those who in one way or the other facilitate the execution of the companymon design is itself tantamount to actual participation in the criminal act. The essence of Section 34 is simultaneous companysensus of the minds of persons participating in the criminal action to bring about a particular result. Such companysensus can be developed at the spot and thereby intended by all of them. Ramaswami Ayyangar v. State of T.N. 1976 3 SCC 779 The existence of a companymon intention can be inferred from the attending circumstances of the case and the companyduct of the parties. No direct evidence of companymon intention is necessary. For the purpose of companymon intention even the participation in the companymission of the offence need number be proved in all cases. The companymon intention can develop even during the companyrse of an occurrence. Rajesh Govind Jagesha v. State of Maharashtra 1999 8 SCC 428 . To apply Section 34 IPC apart from the fact that there should be two or more accused, two factors must be established i companymon intention, and ii participation of the accused in the companymission of an offence. If a companymon intention is proved but numberovert act is attributed to the individual accused, Section 34 will be attracted as essentially it involves vicarious liability but if participation of the accused in the crime is proved and a companymon intention is absent, Section 34 cannot be invoked. In every case, it is number possible to have direct evidence of a companymon intention. It has to be inferred from the facts and circumstances of each case. In Suresh Another v. State of U.P. 2001 3 SCC 673, Section 34 of the Indian Penal Code recognizes the principle of vicarious liability in the criminal jurisprudence. It makes a person liable for action of an offence number companymitted by him but by another person with whom he shared the companymon intention. It is a rule of evidence and does number create a substantive offence. The section gives statutory recognition to the companymonsense principle that if more than two persons intentionally do a thing jointly, it is just the same as if each of them had done it individually. The companymon intention pre-supposes prior companycert. Such a precompanycert or pre-planning may develop on the spot or during the companyrse of companymission of the offence but the crucial test is that such plan must precede the act companystituting an offence. The existence of a companymon intention is a question of fact in each case to be proved mainly as a matter of inference from the circumstances of the case. In that case, it was also observed that the dominant feature for attracting section 34 of the Indian Penal Code is the element of participation in absence resulting in the ultimate criminal act. The section does number envisage the separate act by all the accused persons for becoming responsible for ultimate criminal act. If such an interpretation is accepted, the purpose of section 34 shall be rendered infructuous. It was further observed that what is required under law is that the accused persons sharing the companymon intention must be physically present at the scene of occurrence and be shown number to have dissuaded themselves from the intended criminal act for which they share the companymon intention. Culpability under section 34 cannot be excluded by mere distance from the scene of occurrence. The presumption of companystructive intention, however, has to be arrived at only when the companyrt can, with judicial servitude, hold that the accused must have preconceived the result that ensued in furtherance of the companymon intention. In Gopi Nath Jhallar v. State of U.P. 2001 6 SCC 620 it was observed as under 8. As for the challenge made to the companyviction under Section 302 read with Section 23 IPC, it is necessary to advert to the salient principles to be kept into companysideration and often reiterated by this Court, in the matter of invoking the aid of Section 34 IPC, before dealing with the factual aspect of the claim made on behalf of the appellant. Section 34 IPC has been held to lay down the rule of joint responsibility for criminal acts performed by plurality or persons who jointed together in doing the criminal act, provided that such companymission is in furtherance of the companymon intention of all of them. Even the doing of separate, similar or diverse acts by several persons, so long as they are done in furtherance of a companymon intention, render each of such persons liable for the result of them all, as if he had done them himself, for the whole of the criminal action - be it that it was number overt or was only companyert act or merely an omission companystituting an illegal omission. The Section, therefore, has been held to be attracted even where the acts companymitted by the different companyfederates are different when it is established in one way or the other that all of them participated and engaged themselves in furtherance of the companymon intention which might be of a pre-concerted or pre-arranged plan or one manifested or developed at the spur of the moment in the companyrse of the companymission of the offence. The companymon intention or the intention of the individual companycerned in furtherance of the companymon intention companyld be proved either from direct evidence or by inference from the acts or attending circumstances of the case and companyduct of the parties. The ultimate decision, at any rate, would invariably depend upon the inferences deducible from the circumstances of each case. In Krishnan Anr. v. State represented by Inspector of Police 2003 7 SCC 56, it was observed that section 34 is dependent on the circumstances of each case. No hard and fast rule can be made out regarding applicability or number-applicability of section 34. In Girija Shankar v. State of U.P. 2004 3 SCC 793, it was observed that section 34 has been enacted to elucidate the principle of joint liability of a criminal act. Section 34 has been enacted on the principle of joint liability in the doing of a criminal act. The section is only a rule of evidence and does number create a substantive offence. The distinctive feature of the section is the element of participation in action. The liability of one person for an offence companymitted by another in the companyrse of criminal act perpetrated by several persons arises under Section 34 if such criminal act is done in furtherance of a companymon intention of the persons who join in companymitting the crime. Direct proof of companymon intention is seldom available and, therefore, such intention can only be inferred from the circumstances appearing from the proved facts of the case and the proved circumstances. In order to bring home the charge of companymon intention, the prosecution has to establish by evidence, whether direct or circumstantial, that there was plan or meeting of minds of all the accused persons to companymit the offence for which they are charged with the aid of Section 34, be it pre-arranged or on the spur of the moment but it must necessarily be before the companymission of the crime. The true companycept of the section is that if two or more persons intentionally do an act jointly, the position in law is just the same is if each of them has done it individually by himself. The existence of a companymon intention amongst the participants in a crime is the essential element for application of this section. It is number necessary that the acts of the several persons charged with companymission of an offence jointly must be the same or identically similar. The acts may be different in character, but must have been actuated by one and the same companymon intention in order to attract the provision. In Ramesh Singh Photti v. State of A.P. 2004 11 SCC 305, it has been observed as under 12. As a general principle in a case of criminal liability it is the primary responsibility of the person who actually companymits the offence and only that person who has companymitted the crime can be held guilty. By introducing Section 34 in the Penal Code the legislature laid down the principle of joint liability in doing a criminal act. The essence of that liability is to be found in the existence of a companymon intention companynecting the accused leading to the doing of a criminal act in furtherance of such intention. Thus, if the act is the result of a companymon intention then every person who did the criminal act with that companymon intention would be responsible for the offence companymitted irrespective of the share which he had in its perpetration. Referring to the facts of this case, the short question which arises for adjudication in this appeal is whether the appellant Virendra Singh can be companyvicted under section 302 with the aid of section 34 IPC. Under the Indian Penal Code, the persons who are companynected with the preparation of a crime are divided into two categories 1 those who actually companymit the crime, i.e. principals in the first degree and b those who aid in the actual companymission, i.e. principals in the second degree. Law does number make any distinction with regard to the punishment of such persons, all being liable to be punished alike. Under the Indian Penal Code, a person is responsible for his own act. A person can also be vicariously responsible for the acts of others if he had a companymon intention to companymit the acts or if the offence is companymitted by any member of the unlawful assembly in prosecution of the companymon object of that assembly, then also he can be vicariously responsible. Under the Indian Penal Code, two sections, namely, sections 34 and 149, deal with the circumstances when a person is vicariously responsible for the acts of others. The vicarious or companystructive liability under section 34 IPC can arise only when two companyditions stand fulfilled, i.e., the mental element or the intention to companymit the criminal act companyjointly with another or others and the other is the actual participation in one form or the other in the companymission of the crime. The companymon intention postulates the existence of a pre-arranged plan implying a prior meeting of the minds. It is the intention to companymit the crime and the accused can be companyvicted only if such an intention has been shared by all the accused. Such a companymon intention should be anterior in point of time to the companymission of the crime, but may also develop on the spot when such a crime is companymitted. In most of the cases it is difficult to procure direct evidence of such intention. In most of the cases, it can be inferred from the acts or companyduct of the accused and other relevant circumstances. Therefore, in inferring the companymon intention under section 34 IPC, the evidence and documents on record acquire a great significance and they have to be very carefully scrutinized by the companyrt. This is particularly important in cases where evidence regarding development of the companymon intention to companymit the offence graver, then, the one originally designed, during execution of the original plan, should be clear and companyent. The dominant feature of section 34 is the element of intention and participation in action. This participation need number in all cases be by physical presence. Common intention implies acting in companycert. The essence of section 34 IPC is a simultaneous companysensus of the minds of the persons participating in criminal action to bring about a particular result. Russel in his celebrated book Russel on Crime 12th Edn. Vol. 1 indicates some kind of aid or assistance producing an effect in future and adds that any act may be regarded as done in furtherance of the ultimate felony if it is a step, intentionally taken for the purpose of effecting that felony. It was observed by Russel that any act of preparation for the companymission of felony is done in furtherance of the act. Section 34 IPC does number create any distinct offence, but it lays down the principle of companystructive liability. Section 34 IPC stipulates that the act must have been done in furtherance of the companymon intention. In order to incur joint liability for an offence there must be a pre-arranged and premeditated companycert between the accused persons for doing the act actually done, though there might number be long interval between the act and the pre-meditation and though the plan may be formed suddenly. In order that section 34 IPC may apply, it is number necessary that the prosecution must prove that the act was done by a particular or a specified person. In fact, the section is intended to companyer a case where a number of persons act together and on the facts of the case it is number possible for the prosecution to prove as to which of the persons who acted together actually companymitted the crime. Little or numberdistinction exists between a charge for an offence under a particular section and a charge under that section read with section 34. The other section under which a person can be vicariously responsible for the acts of others is section 149 in the Indian Penal Code. We would briefly like to deal with the scope and ambit of section 149 IPC also. Section 149 IPC reads as under Every member of unlawful assembly guilty of offence companymitted in prosecution of companymon object.- If an offence is companymitted by any member of an unlawful assembly in prosecution of the companymon object of that assembly, or such as the members of that assembly knew to be likely to be companymitted in prosecution of that object, every person who, at the time of the companymitting of that offence, is a member of the same assembly, is guilty of that offence. Both sections 34 and 149 IPC deal with companybinations of persons who become punishable as sharers in an offence. In both these sections, the persons are vicariously responsible for the acts of others. Simultaneously, there is a basic resemblance in both these sections and to some extent they also overlap. There is a substantial difference between these two sections with which we would deal in the later part of this judgment. When several persons, numbering five or more, do an act or intend to do it, both sections 34 and 149 IPC may apply. Section 149 IPC is of wider scope than section 34 IPC and in a case where section 149 applies, a companystructive liability arises in respect of those persons who do number actually companymit the offence. DISTINCTION BETWEEN SECTION 34 AND SECTION 149 OF THE INDIAN PENAL CODE Section 34 does number by itself create any specific offence, whereas section 149 does so Some active participation, especially in crime involving physical violence, is necessary under section 34, but section 149 does number require it and the liability arises by reason of mere membership of the unlawful assembly with a companymon object and there may be numberactive participation at all in preparation and companymission of the crime Section 34 speaks of companymon intention, but section 149 companytemplates companymon object which is undoubtedly wider in its scope and amplitude than intention and Section 34 does number fix a minimum number of persons who must share the companymon intention, whereas section 149 requires that there must be at least five persons who must have the same companymon object. Conclusion When we revert to the facts of this case, we arrive at definite companyclusion that Hakim Singh and his two sons Kamlesh and Virendra Singh armed with weapons went to the house of the deceased Bhagirath to eliminate him.

This appeal by special leave is preferred against the order of the Central Administrative Tribunal in OANo. 367 of 1995 dated 12-1-1996. The appellant volunteered in response to a numberification issued by the Chief Personnel Officer, Southern Railway, dated 16-9-1991 for filling up the vacancies for the post of Assistant Personnel Officer Group B against 25 quota reserved for Limited Departmental Competitive Examination for the year 1990. No doubt, the appellant was successful in the preliminary examination and also in the main written examination. Based on that, she was called for viva voce. Interview was companyducted and a panel of selected names was prepared for appointment to the post of Assistant Personnel Officer, but the appellants name did number find a place in the panel. The appellant preferred an application before the Tribunal on an earlier occasion in OA No. 1178 of 1994 praying for quashing the order of the General Manager dropping her name from the panel. That application was dismissed at the admission stage directing the appellant to go before the appellate authority and exhaust her alternative remedies. The appellate authority also companyfirmed the action of the General Manager in dropping the name of the appellant from the panel. The reason for dropping the name of the appellant from the selected panel was that she and also two others had adopted unfair means in the examination and after issuing show-cause numberice and after verifying the unfair means practised by the appellant and others by taking the opinion of experts, namely, the experts in the Forensic Department of Tamil Nadu Government, it was held proved that the appellant had adopted unfair means in the written examination. Consequently, the decision to drop her name from the panel was taken. Aggrieved by the action of the authorities in dropping her name from the panel and companyfirmed by the appellate authority, once again the appellant moved the Tribunal and inter alia the appellant raised the ground before the Tribunal that the document, namely, the opinion of the Forensic Department which was mainly relied on by the Department for companying to the companyclusion that she had adopted unfair means in the written examination, was number supplied to her. That document was number supplied to the appellant, was admitted by the respondent Union of India in the companynter-affidavit filed before the Tribunal. It is also number denied that the appellant stood first in the test. In paras 14, 16 and 19 of the aforesaid companynter-affidavit, the respondent had stated as follows Regarding the grounds companytained in para d , it is submitted that the answer-books were sent for expert opinion to Forensic Science Department of the Government of Tamil Nadu. They sought permission to open the answer-books before they companyld give a companyclusive opinion and necessary permission was given in writing. As only expert opinion was obtained, the same was number shown in the show-cause numberice. The allegations of the applicant that the papers were opened by the Vigilance Department and number by the Forensic Science Department is ill founded. Regarding the ground companytained in para f , it is submitted that the report received from Forensic Science Department that papers were replaced in the answer-books is an expert opinion from an independent agency. When the reply to the show-cause numberice of the applicant was examined, the opinion of Forensic Science Department was also taken into account. The opinion of Forensic Experts was number supplied to the applicant as it is only a supporting technical evidence for establishing the irregularity companymitted by the applicant. The applicants statement that she had scored the highest marks in the written test is number relevant, especially when the irregularities companymitted by her have been established, her standing first in the written test has numberrelevance. The independent agency, i.e., the Department of Forensic Science of Government of Tamil Nadu had also proved that the answer-sheets had been replaced. Thus the findings of the Vigilance Department have ample support from the Forensic Science Department of Tamil Nadu. Shri P.S. Poti, learned Senior Counsel appearing for the appellant, reiterated the same ground before us to challenge the order of the Tribunal which has number dealt with this point but dismissed the appellants application on some other ground. We are of the view that without going into the factual aspect of the case, the order of the Tribunal as well as the order of the General Manager companyfirmed by the appellate authority are liable to be set aside on the sole ground that the document based on which the companyclusion came to be reached having number been supplied to the appellant, the decision cannot be sustained.

Lord Justice McFarlane: This is an appeal brought by a husband, Dr Richard Lukandwa, in the course of proceedings for nullity against his wife, as she is currently under English law, Ms Jemima Birungi. The case had a substantial history in the Bradford County Court in relation to an earlier divorce petition issued by the husband petitioner but, upon him becoming aware of the suggestion that his wife had undergone a form of marriage in her home country of Uganda before he married her, he stayed the divorce process and issued the current petition for nullity. The marriage in this country took place between the husband and wife (as I shall call them) on 14 February 2005. The marriage continued and as a result of the marriage two children were subsequently born. The issue, however, before this court and as it was before Mr Recorder Hill (who conducted a trial of the nullity petition on 5 January 2011 in Bradford County Court) was whether or not the wife had undertaken a valid marriage in Uganda on 16 July 1999 to a man referred to as Mr Kizito. At the hearing before the learned Recorder the petitioner husband acted in person. It should be recorded that the petitioner is a man clearly of intellect and professional acumen. He is a medical practitioner and he presented a very thoroughly argued and carefully word processed case to the judge, backed up by a range of evidential material both in the form of affidavits and other documents and, as it turned out, via oral evidence over a video link by witnesses in Uganda. The case, in a nutshell, for the husband rested inevitably upon the evidence he had been able to collect at arm's length because, of course, he was not a witness to or a party to or in any way a possessor of direct knowledge about what did or did not take place in Uganda in or around 1999. What he did have were two primary sources of evidence. The first was the affidavit evidence that I have described and in particular, as it turned out over the video link, oral evidence from a local Imam, Sheikh Mbogo, who had purported to conduct a form of marriage between the wife and Mr Kizito. The husband also had a one-page document headed "Certificate of Marriage" dated 16 July 1999 which purported to relate to the alleged marriage. In the lead up to the hearing before the Recorder that document had been produced as a photocopied exhibit to various affidavits filed by the husband. The original of the document was apparently never available to the husband and obviously not to the court in the course of evidence. In the run up to the hearing and at the time that the paperwork will have been seen by the wife and her lawyers prior to the hearing, the nearest to authentication that that documentation came was a handwritten endorsement at the top right hand corner certifying that the document was a true copy of "the original". That is signed by a registrar of the Sharia Muslim Council of Uganda and dated 12 October 2009. That endorsement was backed up by a letter or formal certification headed "To whom it may concern", apparently signed by the same individual who has a very distinctive signature and who gives his name as Sheikh Twaibu Ali Mpanso. That letter is also dated 12 October 2009. That letter attributes a certificate number to the much photocopied document of 208, but the document itself, where the space would normally be for the number is, certainly on the copies we have seen in the bundle, unable to be deciphered. The wife's case was that she knew Mr Kizito and she had a relationship with him during the year following the date of the alleged marriage. She became pregnant by him and towards the end of 2000, shortly prior to the Muslim festival of Ramadan, Mr Kizito had wished for the Sheikh to conduct some form of religious ceremony which, in some way, gave an endorsement -- or, to use the word used by the Recorder, a "blessing" -- to the state of affairs that was represented by their relationship and her state of pregnancy. However, she said, she had no intention to marry Mr Kizito and the ceremony that was undertaken was not a marriage and she did not accept the authenticity of the certificate which of course is dated the previous year, July 1999. For the purposes of this judgment given to determine the appeal today it is not necessary for me to go into more detail as to the extensive factual evidence that the judge heard or indeed the conclusions to which he came upon the internal detail of that material. To summarise the conclusion of the judge's decision, he noted all of the evidence that I have just summarised. He discounted the validity of the Sheikh's evidence; he seems to have formed a favourable view of the credibility of the wife. He found as a fact that she did not intend to undertake a ceremony of marriage at any stage in this period and, crucially, he went on to find at paragraph 24 of his judgment that the certificate was of no evidential value in these terms. At paragraph 24 he said this: "As for the certificate, this is not a document which proves itself. It is a copy of something but of itself it is insufficient to establish that there was a marriage on 16 July 1999. At the very least the court would need to see the original of which this is a photocopy. This poor quality photocopy does not establish a marriage between this Respondent and Mr Haji Kizito. Indeed, it is the Respondent's case that the document is a forgery. Although it has been certified as a true copy, it seems probable that it is merely a copy of a forged document. Certainly, it is not adequate to prove a marriage in an English court." In terms the learned Recorder went on to find that the document was probably a forgery and he expressed himself to be satisfied that there was no ceremony of marriage in Uganda on 16 July 1999. The parties before this appeal, both represented by counsel -- Miss Geddes, who acted for the wife before the Recorder, and Mr Jafar, who now acts on behalf of the husband -- have focused on one single point. That course of action was determined by the fact that Mr Jafar identified the point I am about to describe as a preliminary point and this court considered it had enough validity to require Ms Geddes to address it without us hearing from either counsel as to the ordinary -- if I can call them that -- criticisms and benefits for each side that they wish to draw attention to in the learned Recorder's judgment. The point raised on behalf of the husband is this: in distinction to the photocopies of the purported marriage certificate that had been available prior to the hearing, the husband handed to the Recorder a document which contained three additional certifications on its face. The document handed in, bearing those additions, was not itself a photocopy of these additional stamps and words but a top copy with the different stamps appearing, as we can now see looking at it ourselves, in different colours. The stamps were in order: first of all the authentication, again by a different registrar at the Sharia Council, certifying that the document was a true copy of the original and that is dated 17 December 2010. Below that in a printed form, no doubt from some form of template, the following words appear, "Certified true copy: [then there is a gap] Assistant Registrar General of Marriages" and in the middle of the gap at something of an angle is another stamp with the name Juliette Nagawa Luggya and then a handwritten signature and a date which is again 17 December 2010. The final stamp is dated 30 December 2010 and purports to be that of the Consular Office of the Ugandan High Commission in London. Next to that stamp, indeed overwriting it in places, are the following words, "This is to confirm that this copy of Certificate of Marriage was authenticated by the Assistant Registrar General of Marriages" and that is apparently signed by someone at the Consulate. Miss Geddes tells the court that that document was produced for the first time either at the beginning of or even during the hearing before the Recorder. She, for her part, had prepared the case for the wife, as well she might, by looking at the detailed entries on the photocopied certificate and pointing to areas of vagueness or downright illegibility and forwarding a case which sought to highlight the unsatisfactory nature of that document. Plainly from his conclusion the learned Recorder was on board, as it were, with many of those points. Mr Jafar's argument today is that the hearing before the Recorder proceeded on a legally impermissible basis. He submits that the question of whether or not any celebration of marriage taking place in Uganda was or was not valid is a matter for Ugandan law and the Ugandan authorities. It determines the status of two individuals under Ugandan law and where, as now here, there is a certificate which is authenticated by the Muslim Council and then separately by the authorities of the Ugandan State through the stamp of the Assistant Registrar and subsequently the confirmation as to the authenticity of that stamp by the Consular office here in London, the document raises itself above a mere photocopy of an earlier certificate to one which is an authorised declaration by the State as to the fact that a marriage in the terms of the information recorded on the form took place on 16 July 1999. In expressing my description of Mr Jafar's point I wish to make it clear that certainly for my part today in hearing this appeal I have not come to a concluded view that his submission is entirely and thoroughly well-founded. It might well be but, just as the Recorder was not, we have not been afforded submissions and consideration of the principles of private international law, any relevant case law or, indeed, any very detailed consideration of the registration arrangements in Uganda. We note that there is a civil statute in Uganda, the Marriage and Divorce of Mohammedans Act 1906, which seems to establish a publicly examinable register of marriages which suggests that there may be a document in a different form to this one which might well answer the very question which is at the heart of this case. There may well be other matters -- matters of law and evidence -- which the court would need to consider. So in allowing this appeal which I, for my part, would do, I am in no way expressing a concluded view upon the ultimate validity of this document. Mr Jafar does not, however, need to go that far in order to succeed before us today. His submission is that the Recorder failed to appreciate the significance of the production of a State authenticated certificate -- which this photocopy had, by 5 January become -- and this led the Recorder into error. In the course of submissions we have given the lay label of "trump card" to this document. As I say, whether or not it was, it was a matter for the county court to evaluate. However, the Recorder simply did not engage in that process. He involved himself in looking at the various points designed on behalf of the wife to undermine the sub-detail in relation to the material within the form without standing back and looking at it as an instrument in its own right with the validity which may attach to it as a result of the State authentication apparently given by the recent stamps and signatures. In my view that was an erroneous course for the Recorder to take. Albeit given the fact that the husband was in person and the case had been set up on a different basis, it is understandable that the progress of the proceedings moved forward as they did, it would in my view be a heavy thing for a court at county court level in the jurisdiction of England and Wales, as my Lord, Lord Justice Thorpe, said in the course of submissions, to declare a document which has been authenticated by various organisations in the Ugandan State as "a forgery". It therefore seems to me that at a very preliminary stage the process set off in the wrong direction, and on the wrong basis before the Recorder in Bradford in January. The question of the validity of this document should have been at the forefront of the court's mind, not in terms of the detail within it but as a document in itself. There should have been, in my view, a presumption in favour of both the validity of the document and therefore the validity of the information that it authenticated, namely the fact that a marriage between the wife and Mr Kizito had taken place on 16 July 1999. If the wife wished to challenge that then the ball was in her court to do so. She may now go about that in investigating further in Uganda or making representations there. She may well now seek to do so by arguing matters of private international law. That should have been the starting point; it was not. The Recorder was therefore in error and I would allow the appeal. Lord Justice Pitchford: I agree. Lord Justice Thorpe: I also agree. Order: Application granted.

Judgment of the Court of 12 September 2000. - Commission of the European Communities v Ireland. - Failure to fulfil obligations - Article 4(5) of the Sixth VAT Directive - Access to roads on payment of a toll - Failure to levy VAT - Regulations (EEC, Euratom) Nos 1552/89 and 1553/89 - Own resources accruing from VAT. - Case C-358/97. European Court reports 2000 Page I-06301 Summary Parties Grounds Decision on costs Operative part Keywords 1. Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Supply of services for consideration - Definition - Provision of roads infrastructure on payment of a toll - Whether included (Council Directive 77/388, Art. 2, para. 1) 2. Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Taxable persons - Bodies governed by public law - Activities in the exercise of public authority not taxable - Definition (Council Directive 77/388, Art. 4(5)) 3. Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Exemptions provided for by the Sixth Directive - Exemption for the letting of immovable property - Definition - Provision of roads infrastructure on payment of a toll - Whether excluded (Council Directive 77/388, Art. 13B(b)) 4. Own resources of the European Community - Resources accruing from value added tax - Arrangements for collection - Corrections to the annual statement - Time-limit - Initiation by the Commission of the procedure for failure to fulfil obligations seeking the retrospective payment of such resources - Application by analogy - Justified by considerations of legal certainty (Council Regulation No 1553/89, Art. 9(2)) Summary 1. The provision of roads infrastructure on payment of a toll constitutes a supply of services for consideration within the meaning of Article 2(1) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes. Use of the road depends on payment of a toll, the amount of which varies inter alia according to the category of vehicle used and the distance covered. There is, therefore, a direct and necessary link between the service provided and the financial consideration received. ( see paras 33-34 ) 2. In order for the exemption from value added tax for bodies governed by public law, provided for by the first subparagraph of Article 4(5) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, to apply as regards activities or transactions in which they engage as public authorities, two conditions must be fulfilled: the activities must be carried out by a body governed by public law and they must be carried out by that body acting as a public authority. As regards the latter condition, activities pursued as public authorities are those engaged in by bodies governed by public law under the special legal regime applicable to them and do not include activities pursued by them under the same legal conditions as those that apply to private traders. ( see paras 37-38 ) 3. Leaving aside the specific cases expressly listed in Article 13B(b) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, the term letting of immovable property must be construed strictly since it constitutes an exception to the general VAT rules contained in that directive. Accordingly, that term cannot be considered to cover contracts, such as those for the provision of roads infrastructure on payment of a toll, in which the parties have not agreed on any duration for the right of enjoyment of the immovable property, which is an essential element of a contract to let. ( see paras 55-56 ) 4. Despite the absence of a limitation period for the recovery of VAT in either the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes or in the legislation relating to the Communities' own resources, the fundamental requirement of legal certainty may have the effect of preventing the Commission from indefinitely delaying, in the course of a procedure for failure to fulfil obligations seeking the retrospective payment of own resources, a decision to bring proceedings. Article 9(1) of Regulation No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax does not refer to the situation in which the procedure for failure to fulfil obligations under Article 169 of the Treaty (now Article 226 EC) has been initiated, but demonstrates none the less the requirements pertaining to legal certainty in budgetary matters by ruling out any correction to the annual statement after four budgetary years have elapsed. It is clear that the same considerations of legal certainty justify the application by analogy of the rule laid down by that provision where the Commission decides to initiate the procedure for failure to fulfil obligations in order to seek retrospective payment of own resources accruing from VAT. ( see paras 71-72, 75-76 ) Parties In Case C-358/97, Commission of the European Communities, represented by H. Michard and B. Doherty, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of C. Gómez de la Cruz, also of its Legal service, Wagner Centre, Kirchberg, applicant, v Ireland, represented by M.A. Buckley, Chief State Solicitor, acting as Agent, assisted by D. Sherlock, Deputy Revenue Solicitor, T. McCann SC and D. Moloney BL, with an address for service in Luxembourg at the Irish Embassy, 28 Route d'Arlon, defendant, APPLICATION for a declaration that by not subjecting tolls for the use of toll roads and toll bridges in Ireland to value added tax, contrary to Articles 2 and 4(1), (2) and (5) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), and by failing to make available to the Commission the amounts of own resources and interest for late payment as a consequence of that infringement, Ireland has failed to fulfil its obligations under the EC Treaty, THE COURT, composed of: G.C. Rodríguez Iglesias, President, J.C. Moitinho de Almeida (Rapporteur), L. Sevón, R. Schintgen (Presidents of Chambers), P.J.G. Kapteyn, C. Gulmann, J.-P. Puissochet, P. Jann, H. Ragnemalm, V. Skouris and F. Macken, Judges, Advocate General: S. Alber, Registrar: D. Louterman-Hubeau and H.A. Rühl, Principal Administrators, having regard to the Report for the Hearing, after hearing oral argument from the parties at the hearing on 23 November 1999, at which the Commission was represented by H. Michard and B. Doherty and Ireland was represented by T. McCann and P. Hunt BL, after hearing the Opinion of the Advocate General at the sitting on 27 January 2000, gives the following Judgment Grounds 1 By application lodged at the Court Registry on 21 October 1997, the Commission of the European Communities brought an action under Article 169 of the EC Treaty (now Article 226 EC) for a declaration that by not subjecting tolls for the use of toll roads and toll bridges in Ireland to value added tax (hereinafter VAT), contrary to Articles 2 and 4(1), (2) and (5) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1, hereinafter the Sixth Directive) and by failing to make available to the Commission the amounts of own resources and interest for late payment as a consequence of that infringement Ireland had failed to fulfil its obligations under the EC Treaty. Legal background 2 Article 2 of the Sixth Directive provides as follows: The following shall be subject to value added tax: 1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such; 2. the importation of goods. 3 According to Article 4(1), (2) and (5) of the Sixth Directive: 1. "Taxable person" shall mean any person who independently carries out in any place any economic activity specified in paragraph (2), whatever the purpose or results of that activity. 2. The economic activities referred to in paragraph (1) shall comprise all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also be considered an economic activity. ... 5. States, regional and local government authorities and other bodies governed by public law shall not be considered taxable persons in respect of the activities or transactions in which they engage as public authorities, even where they collect dues, fees, contributions or payments in connection with these activities or transactions. However, when they engage in such activities or transactions, they shall be considered taxable persons in respect of these activities or transactions where treatment as non-taxable persons would lead to significant distortions of competition. In any case, these bodies shall be considered taxable persons in relation to the activities listed in Annex D, provided they are not carried out on such a small scale as to be negligible. Member States may consider activities of these bodies which are exempt under Article 13 or 28 as activities which they engage in as public authorities. 4 It is common ground that providing access to roads and related infrastructures (hereinafter roads) on payment of a toll is not one of the activities listed in Annex D to the Sixth Directive. 5 Article 13B of the Sixth Directive provides: Without prejudice to other Community provisions, Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any possible evasion, avoidance or abuse: ... (b) the leasing or letting of immovable property excluding: 1. the provision of accommodation, as defined in the laws of the Member States, in the hotel sector or in sectors with a similar function, including the provision of accommodation in holiday camps or on sites developed for use as camping sites; 2. the letting of premises and sites for parking vehicles; 3. lettings of permanently installed equipment and machinery; 4. hire of safes. Member States may apply further exclusions to the scope of this exemption. ... 6 Council Regulation (EEC, Euratom) No 1553/89 of 29 May 1989 on the definitive uniform arrangements for the collection of own resources accruing from value added tax (OJ 1989 L 155, p. 9), which replaced with effect from 1 January 1989 Council Regulation (EEC, Euratom, ECSC) No 2892/77 of 19 December 1977 implementing in respect of own resources accruing from value added tax the Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources (OJ 1977 L 336, p. 8), last amended by Council Regulation (ECSC, EEC, Euratom) No 3735/85 of 20 December 1985 (OJ 1985 L 356, p. 1), provides in Article 1: VAT resources shall be calculated by applying the uniform rate, set in accordance with Decision 88/376/EEC, Euratom, to the base determined in accordance with this regulation. 7 Under Article 2(1) of Regulation No 1553/89: The VAT resources base shall be determined from the taxable transactions referred to in Article 2 of Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment as last amended by [Directive] 84/386/EEC, with the exception of transactions exempted under Articles 13 to 16 of that directive. 8 Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom, on the system of the Community's own resources (OJ 1989 L 155, p. 1), applicable from 1 January 1989, which repealed Council Regulation (EEC, Euratom, ECSC) No 2891/77 of 19 December 1977 implementing the Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources (OJ 1977 L 336, p. 1), last amended by Council Regulation (ECSC, EEC, Euratom) No 1990/88 of 30 June 1988 (OJ 1988 L 176, p. 1), provides in Article 9(1): In accordance with the procedure laid down in Article 10, each Member State shall credit own resources to the account opened in the name of the Commission with its Treasury or the body it has appointed. 9 Under Article 11 of Regulation No 1552/89: Any delay in making the entry in the account referred to in Article 9(1) shall give rise to the payment of interest by the Member State concerned at the interest rate applicable on the Member State's money market on the due date for short-term public financing operations, increased by 2 percentage points. This rate shall be increased by 0.25 of a percentage point for each month of delay. The increased rate shall be applied to the entire period of delay. Pre-litigation procedure Procedure relating to the Sixth Directive 10 The Commission raised the question of VAT on tolls in a letter to the Irish authorities of 3 March 1987. The authorities replied by letter of 14 December 1987. 11 By letter of 20 April 1988 the Commission informed the Irish Government that it considered that the failure to levy VAT on the tolls collected for the use of the East Link Bridge in Dublin was contrary to Articles 2 and 4 of the Sixth Directive. It gave the Irish Government formal notice, pursuant to Article 169 of the Treaty, that it should submit its observations on this subject within two months. 12 On 17 October 1988 the Irish authorities replied that the tolls in question represented the letting of immovable property and as such were exempt from VAT under Article 13 of the Sixth Directive. 13 The Commission considered that the explanations given by the Irish authorities were not satisfactory, and therefore by letter of 19 October 1989 sent the Irish Government a reasoned opinion primarily to the effect that Ireland was failing to fulfil its obligations under the Sixth Directive. Accordingly, it called on that Member State to take the measures necessary to fulfil those obligations within two months. 14 By letter of 12 October 1990 the Irish authorities reiterated their view and cited Article 4(5) of the Sixth Directive in support of their defence. The procedure relating to the system of own resources 15 By letter of 27 November 1987, the Commission pointed out to the Irish authorities that the VAT which should have been collected on the tolls for the East Link Bridge had to be taken into account in the assessment of the amount to be contributed to the Community budget under the system of Community own resources. 16 In their reply of 22 April 1988 the Irish authorities stated that since in their view VAT was not chargeable on the East Link bridge toll they did not consider that they owed own resources accruing from VAT (hereinafter VAT own resources) in respect of this activity. 17 On 31 January 1989 the Commission sent the Irish Government a letter of formal notice regarding its failure to comply with the rules relating to the Communities' own resources. The Commission requested inter alia that the Irish authorities make the calculations necessary to ascertain the amount of VAT own resources unpaid for the financial years 1984 to 1986 and that those amounts be paid to it, with interest for late payment as from 31 March 1988. The Commission also requested that for the years subsequent to 1986 the necessary calculations be made to determine the amount of own resources due each year and that those amounts be made available to it by the first working day of August the following year, with interest for late payment where applicable. 18 The Irish authorities replied to that letter of formal notice by letter of 4 October 1989. 19 As the reply of the Irish Government was not considered satisfactory the Commission, by the reasoned opinion of 19 October 1989 mentioned at paragraph 13 of this judgment, also claimed that Ireland had failed to comply with the Community rules relating to own resources. 20 The Irish Government replied to the reasoned opinion, as regards own resources, by letter of 23 May 1990. 21 As the replies of the Irish Government to the reasoned opinion were not considered satisfactory, the Commission brought this action concerning both the alleged infringement of provisions of the Sixth Directive and the repercussions of that infringement on the payment of the Communities' own resources. Substance 22 By its action the Commission claims, first, that Ireland did not comply with the provisions of the Sixth Directive by failing to subject to VAT tolls collected as consideration for the use of toll roads and toll bridges, and, second, that it breached the rules relating to the system of the Communities' own resources by not paying in to the Community budget the VAT own resources relating to the sums which should have been collected by way of VAT on those tolls. The first claim 23 The Commission submits that providing access to roads on payment of a toll by the user is an economic activity within the meaning of Articles 2 and 4 of the Sixth Directive. That activity must be considered to be a supply of services carried out by a taxable person in the course of the exploitation of property for the purpose of obtaining income therefrom on a continuing basis, within the meaning of Article 4(1) and (2) of the Sixth Directive. 24 The fact that this activity is carried out, as it is in Ireland, by private operators under special rules cannot, in its view, remove the transactions in question from the scope of the Sixth Directive. 25 In that regard, the Commission points out that under the first paragraph of Article 4(5) of the Sixth Directive it is only in respect of activities or transactions in which they engage as public authorities that bodies governed by public law are not considered to be taxable persons. The activity at issue does not come into that category, as it does not fall within the core responsibilities of public authority which can never be delegated to private bodies, bearing in mind that the rule that bodies governed by public law are not taxable persons must be interpreted strictly. 26 Moreover, the exemption referred to in the preceding paragraph can in any event only be relied on if the activity at issue is carried out by a body governed by public law. 27 The Court notes, first, that by including amongst the taxable transactions defined in Article 2 not only the importation of goods but also the supply of goods or services effected for consideration within the territory of a country and by defining taxable person in Article 4(1) as any person who independently carries out an economic activity, whatever the purpose or results of that activity, the Sixth Directive attributes to VAT a very wide scope (Case 235/85 Commission v Netherlands [1987] ECR 1471, paragraph 6). 28 Economic activities are defined in Article 4(2) as comprising all activities of producers, traders and persons supplying services. In particular, the exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis is also to be considered an economic activity. 29 An analysis of those definitions shows that the scope of the term economic activities is very wide, and that the term is objective in character, in the sense that the activity is considered per se and without regard to its purpose or results (Commission v Netherlands, cited above, paragraph 8). 30 In view of the scope of the term economic activities it must be held that, in providing access to roads in return for payment, operators in Ireland are carrying out an economic activity within the meaning of the Sixth Directive. 31 In view of the objective character of the term economic activities, the fact that the activity in question consists in the performance of duties which are conferred and regulated by law in the public interest is irrelevant. Indeed, Article 6 of the Sixth Directive expressly provides that certain activities carried on in pursuance of the law are to be subject to the system of VAT (Commission v Netherlands, cited above, paragraph 10). 32 It must also be remembered that according to the case-law of the Court (in particular Case 102/86 Apple and Pear Development Council v Commissioners of Customs and Excise [1988] ECR 1443, paragraph 12, and Case C-258/95 Fillibeck v Finanzamt Neustadt [1997] ECR I-5577, paragraph 12), the concept of the supply of services effected for consideration within the meaning of Article 2(1) of the Sixth Directive requires the existence of a direct link between the service provided and the consideration received. 33 As the Commission rightly submitted, providing access to roads on payment of a toll fits that definition. Use of the road depends on payment of a toll, the amount of which varies inter alia according to the category of vehicle used and the distance covered. There is, therefore, a direct and necessary link between the service provided and the financial consideration received. 34 Accordingly, providing access to roads on payment of a toll constitutes a supply of services for consideration within the meaning of Article 2(1) of the Sixth Directive. 35 It must therefore be ascertained whether, as the Irish Government contends, the operators in question are entitled to the exemption provided for by Article 4(5) of the Sixth Directive in respect of the activity of providing access to roads on payment of a toll. 36 The first paragraph of that article provides that bodies governed by public law are not considered to be taxable persons in respect of activities or transactions in which they engage as public authorities. 37 As the Court has held on numerous occasions, it is clear from that provision, when examined in the light of the aims of the directive, that two conditions must be fulfilled in order for the exemption to apply: the activities must be carried out by a body governed by public law and they must be carried out by that body acting as a public authority (see, in particular, Case C-202/90 Ayuntamiento de Sevilla v Recaudadores de Tributos de las Zonas Primera y Segunda [1991] ECR I-4247, paragraph 18). 38 As regards the latter condition, it is clear from the settled case-law of the Court of Justice (Joined Cases 231/87 and 129/88 Ufficio Distrettuale delle Imposte Dirette di Fiorenzuola and Others v Comune di Carpaneto Piacentino and Others [1989] ECR 3233, paragraph 16; Case C-4/89 Comune di Carpaneto Piacentino and Others v Ufficio Provinciale Imposta sul Valore Aggiunto di Piacenza [1990] ECR I-1869, paragraph 8, and Case C-247/95 Finanzamt Augsburg-Stadt v Marktgemeinde Welden [1997] ECR I-779, paragraph 17) that activities pursued as public authorities within the meaning of the first paragraph of Article 4(5) of the Sixth Directive are those engaged in by bodies governed by public law under the special legal regime applicable to them and do not include activities pursued by them under the same legal conditions as those that apply to private traders. 39 In the light of that case-law, the Commission's argument (see paragraph 25 of this judgment) that a body acts as a public authority only in respect of activities falling within the definition of public authority in the strict sense of that term, which do not include providing access to roads on payment of a toll, must be rejected. 40 The Commission, whose legal argument has thus not been upheld by the Court, has not established, or even sought to establish, that in the present case the traders in question are operating under the same conditions as a private trader within the meaning of the case-law of the Court of Justice. In contrast, Ireland took pains to demonstrate that the activity in question was carried out by those traders under a special legal regime applicable to them within the meaning of the same case-law. 41 Accordingly, it must be held that the Commission has failed to put before the Court the evidence required to substantiate the alleged failure to fulfil obligations as regards the condition relating to pursuance of an activity as a public authority. 42 However, as also noted in paragraph 37 of this judgment, the non-taxable status provided for in Article 4(5) of the Sixth Directive requires that the activities be carried out not only as a public authority but also by a body governed by public law. 43 In that regard the Court has held that an activity carried on by a private individual is not excluded from the scope of VAT merely because it consists in the performance of acts falling within the prerogatives of the public authority (Commission v Netherlands, cited above, paragraph 21, and Ayuntamiento de Sevilla, cited above, paragraph 19). The Court held, in paragraph 20 of the latter judgment, that it follows that if a commune entrusts the activity of collecting taxes to an independent third party the exclusion from VAT provided for by Article 4(5) of the Sixth Directive is not applicable. Similarly, the Court held in paragraph 22 of the judgment in Commission v Netherlands, cited above, that even assuming that in performing their official services notaries and bailiffs in the Netherlands exercise the powers of a public authority by virtue of their appointment to public office, they cannot enjoy the exemption provided for in Article 4(5) of the Sixth Directive because they pursue those activities, not in the form of a body governed by public law, since they are not part of the public administration, but in the form of an independent economic activity carried out in the exercise of a liberal profession. 44 In the present case it is common ground that, in Ireland, the activity of providing access to roads on payment of a toll is carried out by traders governed by private law. Accordingly, the exemption provided for by Article 4(5) of the Sixth Directive is not applicable. 45 However, the Irish Government considers that providing access to roads on payment of a toll represents a letting of immovable property within the meaning of Article 13B(b) of the Sixth Directive, and as such is exempt from VAT under that provision. 46 According to the Irish Government, since VAT is a tax on the supply of goods and services the question arises as to the nature of the principal item received as consideration for the payment. In the case of payment of a road toll the chief benefit conferred is the right to use the toll road, so that the transaction falls within Article 13B(b). 47 Contrary to the submission of the Commission, the term letting as used in Article 13B(b) does not, the Irish Government contends, imply a right of exclusive occupation. The requirement of a fixed duration for the right to use the goods in question is met in so far as the agreed period of time is that required for a driver to travel along the toll road or bridge. In that provision the concept of letting differs from that of leasing, the latter term implying a longer period of time than that implied by letting. 48 The Irish Government considers that letting within the meaning of Article 13B(b) of the Sixth Directive includes, as in Irish law, the granting of rights of way or easements over property. The Commission failed to take proper account of the concept of short term lettings and mistakenly concentrated on leasing of property. 49 Finally, the fact that letting of immovable property does not always, contrary to the Commission's claim, require a classic landlord and tenant relationship is clear from the structure of Article 13B(b) itself, which lists four activities as being excluded from the exemption, clearly implying that the activities listed - which include the letting of sites for parking vehicles - are themselves forms of leasing or letting of immovable property. 50 In the view of the Irish Government the nature of the transaction in paying for car parking is very similar to the transaction involved in paying a toll. Given the similarities and given that, according to the Sixth Directive, the letting of immovable property expressly includes the service offered for parking fees, it is reasonable to infer that the same applies to the services offered in exchange for a toll. 51 It should be observed at the outset that according to settled case-law the exemptions provided for in Article 13 of the Sixth Directive have their own independent meaning in Community law (see Case 348/87 Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën [1989] ECR 1737, paragraph 11, Case C-453/93 Bulthuis-Griffioen v Inspecteur der Omzetbelasting [1995] ECR I-2341, paragraph 18, and Case C-2/95 SDC v Skatteministeriet [1997] ECR I-3017, paragraph 21). They must therefore be given a Community definition. 52 It is also settled case-law that the terms used to specify the exemptions provided for by Article 13 of the Sixth Directive are to be interpreted strictly since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person (see, inter alia, Stichting Uitvoering Financiële Acties, cited above, paragraph 13, Bulthuis-Griffioen, cited above, paragraph 19, SDC, cited above, paragraph 19, and Case C-216/97 Gregg v Commissioners of Customs and Excise [1999] ECR I-4947, paragraph 12). 53 In that regard, it must be observed that the wording of Article 13B(b) of the Sixth Directive does not shed any light on the scope of the terms leasing or letting of immovable property. 54 The definition of letting of immovable property under that provision is certainly wider in some respects than that enshrined in various national laws. For instance the article lists, in order to exclude it from the exemption, a contract for a hotel room (the provision of accommodation ... in the hotel sector), which, in view of the overriding importance of the services provided by the hotelier and the control he retains over the use of the premises by patrons, is not considered, in some national laws, to be a contract to let. 55 Leaving aside the specific cases expressly listed in Article 13B(b) of the Sixth Directive, however, the term letting of immovable property must be construed strictly. As pointed out in paragraph 52 of this judgment, it constitutes an exception to the general VAT rules contained in that directive. 56 Accordingly, that term cannot be considered to cover contracts in which, as here, the parties have not agreed on any duration for the right of enjoyment of the immovable property, which is an essential element of a contract to let. 57 Where access to roads is provided, what interests the user is the possibility offered to him of making a particular journey rapidly and more safely. The duration of the use of the road is not a factor taken into account by the parties, in particular in determining the price. 58 In the light of the foregoing considerations, it must be held that by failing to subject to VAT tolls collected for the use of toll roads and toll bridges as consideration for the service supplied to users, when that service is not provided by a body governed by public law within the meaning of Article 4(5) of the Sixth Directive, Ireland has failed to fulfil its obligations under Articles 2 and 4 of that directive. The second claim 59 The Commission observes that the Community rules on the collection of VAT own resources are contained in Regulation No 1553/89, which replaced with effect from 1 January 1989 Regulation No 2892/77, as amended. 60 Where a taxable person carries out a transaction falling within Articles 2 and 4 of the Sixth Directive, the ultimate consumer of that supply of goods or services is liable to VAT, and the provisions relating to the payment of VAT own resources are correspondingly applicable to the Member State in which the VAT was collected. 61 The Commission submits that where the Sixth Directive has been breached and the basis of assessment of VAT own resources thereby reduced it must be credited with the amount of own resources attributable to the tax which should have been collected, or suffer financial disadvantage which must be made good out of the gross domestic product. Such breaches therefore cause financial damage to the other Member States and consequently subvert the principle of equality. 62 As regards interest for late payment the Commission notes that the Court has held that the default interest provided for by Article 11 of Regulation No 1552/89 is payable in respect of any delay, regardless of the reason for the delay in making the entry in the Commission's account (see, for example, Case 54/87 Commission v Italy [1989] ECR 385, paragraph 12). 63 The Commission considers that it gave the Irish Government sufficient time to remedy the infringement and drew its attention to the fact that, from 31 March 1988, interest for late payment was due for the amounts of VAT own resources which had not been paid by Ireland as a result of its failure to levy VAT on road tolls. 64 It must be observed that under Article 1 of Regulation No 1553/89 VAT own resources are calculated by applying the uniform rate to the base determined in accordance with that regulation and that under Article 2(1) of the regulation that base is determined from the taxable transactions referred to in Article 2 of the Sixth Directive. 65 Since VAT was not levied on the tolls collected as consideration for the use of certain roads in Ireland, the corresponding amounts were not taken into account in determining the VAT own resources base, with the result that Ireland has thereby also breached the rules relating to the system of the Community's own resources. 66 Moreover, the interest for late payment claimed by the Commission has its basis in Article 11 of Regulation No 1552/89. As the Commission rightly pointed out, the default interest is payable regardless of the reason for the delay in making the entry in the Commission's account (see, in particular, Commission v Italy, cited above, paragraph 12). 67 The Irish Government objects, however, that Article 9 of Regulation No 1553/89 and Article 11 of Regulation No 1552/89 entitle the Commission to require additional payments and interest for late payment only if the infringement of Community legislation results in the payment of an insufficient amount by way of the Communities' own resources. That is not the case here. 68 First, Ireland's contribution to the Communities' own resources was reduced from 1988 pursuant to Council Decision 88/376/EEC, Euratom of 24 June 1988 on the system of the Communities' own resources (OJ 1988 L 185, p. 24), and Council Decision 94/728/EC, Euratom of 31 October 1994 on the system of the European Communities' own resources (OJ 1994 L 293, p. 9), and the resulting total amount paid each year. Second, while for the years 1985 to 1987 there was a shortfall in Ireland's contribution to the Communities' own resources of IEP 39 686, Ireland seeks to set off against that sum the overpayment of its contribution in 1984, which, it claims, amounts to IEP 90 820, leaving a final balance of IEP 51 134 due to Ireland. 69 In that regard, it is sufficient to note that whilst, as the Commission conceded at the hearing, the financial consequences of the correct application of the Sixth Directive must be assessed when this judgment is enforced, those consequences cannot, in any event, affect the finding made in paragraph 65 of this judgment that Ireland did not comply with the rules relating to the system of the Communities' own resources in connection with the tolls collected as consideration for providing access to certain roads. 70 However, it is necessary to consider whether the extent of Ireland's obligation to make retrospective payments where appropriate under the rules relating to the Communities' own resources is affected by the fact that over seven years elapsed between the notification of the reasoned opinion and the bringing of this action. 71 Despite the absence of a limitation period for the recovery of VAT in either the Sixth Directive (Case C-85/97 SFI v Belgian State [1998] ECR I-7447, paragraph 25) or in the legislation relating to the Communities' own resources, the fundamental requirement of legal certainty may have the effect of preventing the Commission from indefinitely delaying, in the course of a procedure for failure to fulfil obligations seeking the retrospective payment of own resources, the decision to bring proceedings (see, mutatis mutandis, Case 57/69 ACNA v Commission [1972] ECR 933, paragraph 32). 72 In that regard, it should be borne in mind that, under Article 7(1) of Regulation No 1553/89, the Member States must send the Commission a statement of the total amount of the VAT own resources base for the previous calendar year, to which the uniform rate referred to in Article 1 is to be applied in order for VAT own resources to be determined. 73 Under Article 9(1) of Regulation No 1553/89, any corrections, for whatever reason, to the statements referred to in Article 7(1) for previous financial years are to be made in agreement between the Commission and the Member State concerned. If the Member State does not give its agreement, the Commission, after re-examining the matter, is to take whatever measures it considers necessary for correct application of that regulation. 74 Article 9(2) of that regulation provides: No further corrections may be made to the annual statement referred to in Article 7(1) after 31 July of the fourth year following the financial year concerned, unless they concern points previously notified either by the Commission or by the Member State concerned. 75 That provision does not refer to the situation in which the procedure for failure to fulfil obligations under Article 169 of the Treaty has been initiated, but demonstrates none the less the requirements pertaining to legal certainty in budgetary matters by ruling out any correction after four budgetary years have elapsed. 76 It is clear that the same considerations of legal certainty justify the application by analogy of the rule laid down by that provision where the Commission decides to initiate the procedure for failure to fulfil obligations in order to seek retrospective payment of VAT own resources. 77 Accordingly the Commission, which did not bring this action until 21 October 1997, can seek retrospective payment of VAT own resources with interest for late payment only as from the 1994 budgetary year. 78 Having regard to all the foregoing considerations, it must be held that by failing to make available to the Commission as VAT own resources the amounts corresponding to the VAT which should have been levied on tolls collected for the use of toll roads and toll bridges, together with interest for late payment, Ireland has failed to fulfil its obligations under Regulations Nos 1553/89 and 1552/89. Decision on costs Costs 79 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. As the Commission has applied for an order for costs against Ireland and the latter has been unsuccessful in the main, Ireland must be ordered to bear the costs. Operative part On those grounds, THE COURT hereby: 1. Declares that by failing to subject to value added tax tolls collected for the use of toll roads and toll bridges as consideration for the service supplied to users, when that service is not provided by a body governed by public law within the meaning of Article 4(5) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment, and by failing to make available to the Commission of the European Communities as own resources accruing from value added tax the amounts corresponding to the tax which should have been levied on those tolls together with interest for late payment, Ireland has failed to fulfil its obligations under Articles 2 and 4 of that directive and under Council Regulation (EEC, Euratom) No 1553/89 of 29 May 1989 on the definitive uniform arrangements for the collection of own resources accruing from value added tax and Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the Communities' own resources. 2. Orders Ireland to bear the costs.

civil appellate jurisdiction civil appeal number 718 of 1968. appeal under s. 116-a of the representation of the people act 1951 from the judgment and order dated numberember 17 1967 of the mysore high companyrt in election petition number 7 of 1967. v. gupte shyamala pappu s. s. javali and vineet kumar for the appellant. lily thomas for respondent number 1. the judgment of the companyrt was delivered by bhargava j. this appeal under section ii 6a of the repre- sentation of the peoples act number 43 of 1951 hereinafter referred to as the act has been filed by one of the unsuccessful candidates for election to the mysore legislative assembly from number 152 bhadravati companystituency against the judgment of the high companyrt of mysore dismissing his election petition for setting aside the election of the successful candidate respondent number 1. after the numberination papers had been filed the scrutiny of the numberination papers took place on the 21st january 1967 and five numberination papers were declared as valid. they were the numberination papers of the appellant respondent number 1 and respondents number. 2 to 4. the polling for the companystituency took place on 15th february 1967 and after the companynting of votes the results were declared on 22nd february 1967. respondent number 1 received 15862 votes while the appellant received 13380 votes. the other three candidates respondents 2 to 4 were also unsuccessful having received much smaller number of votes. on 5th april 1957 the appellant filed the election petition challenging the election of respondent number 1 on a number of grounds out of which we need mention only one single ground as the appeal in this companyrt is confined to that ground alone. it was pleaded that respondent number 1 was disqualified under article 191 1 a of the companystitution from being chosen as a member of the legislative assembly because he was holding an office of profit under the government of the state of mysore on the date of scrutiny. this ground as well as other grounds taken by the appellant for challenging the validity of the election of respondent number 1 were all rejected by the high court and the election petition was dismissed. companyse- quently the appellant has companye up in this appeal to this court. though in this appeal a number of grounds were raised mr. s. v. gupte companynsel for the appellant companyfined the case to this sole ground of disqualification of respondent number 1 on the date of scrutiny. the facts relevant for deciding this issue may number be stated. on the date of scrutiny respondent number 1 was employed as superintendent safety engineering department in the factory run by the mysore iron steel works limited bhadravati. his salary was more than rs. 500 per mensem. the past history of the service of respondent number 1 was that he was appointed in the year 1936 in the mysore iron steel works bhadravati which was started by the government of mysore and was being managed by the government as its own concern. he companytinued to be a servant of the government of mysore when in the year 1962 a private limited companypany was registered under the name of mysore iron steel limited bhadravati hereinafter referred to as the companypany under the indian companypanies act 1956 and this companypany took over the mysore iron steel works from the government. res- pondent number 1 had first joined service as a daily worker in 1936 but was promoted as chargeman asstt. foreman foreman and thereafter as assistant superintendent which was the post held by him in the year 1962 at the time when the concern was taken over by the companypany. subsequently he was promoted as superintendent in the year 1964 and was working on that post at the time of the election in 1967. it was also the companymon case of the parties that the shares of the company were held cent per cent by the mysore government though some of the shares were shown in the names of some of the officers in the service of the mysore government. under the articles of association of the companypany the first directors of the companypany were the minister-in-charge of the industries portfolio in the mysore government the secre- taries to the mysore government in the finance department and in the companymerce and industries department the managing director of the mysore iron steel limited and the chief conservator of forests of the mysore government. the governumber of mysore was entitled to appoint all or a majority of the members of the board of directors so long as the government of mysore held number less than 51 per cent of the total paid-up capital of the companypany or so long as the governumber companytinued to be interested in any fiduciary capacity. the board of directors companyld also companyopt one or more individuals as directors. thus the state government had companysiderable companytrol in appointment of directors of the company as well as in the appointment of the managing director who was to be appointed by the governumber from amongst the directors numberinated by him. the governumber was also entitled to appoint from amongst the numberinated directors a chairman and vice-chairman of the board of directors. even the secretary of the companypany had to be appointed by the board of directors after obtaining approval of the governumber. in respect of other employees of the company recruitment and service companyditions had to be in accordance with the rules which may be prescribed by the governumber from time to time. when the companycern was taken over from the government by the companypany the services of respondent number 1 were number terminated and he was companytinued in the same post by the companypany which he was holding when the companycern was being run by the government. there was numberfresh contract entered into between him and the companypany. on these facts two alternative companytentions were raised by mr. gupte to urge that respondent number 1 was disqualified under art. 191 1 a of the companystitution. the first argument was that respondent number 1 when initially appointed to a post in the mysore iron steel works in 1936 was a government servant and even after that companycern was taken over by the company he companytinued to be in the service of the mysore government. in the alternative the second companytention was that even if respondent number 1 ceased to be a government servant he still companytinued to hold an office of profit under the government of mysore though technically he was in the employment of the companypany. so far as the first point is companycerned reliance is placed primarily on the circumstance that then the companycern was taken over by the companypany from the government there were no specific agreements terminating the government service of respondent number 1 or bringing into existence a relationship of master and servant between the companypany and respondent number that circumstance by itself cannumber lead to the conclusion that respondent number 1 companytinued to be in government service. when the undertaking was taken over by the companypany as a going companycern the employees working in the undertaking were also taken over and since in law the company has to be treated as an entity distinct and separate from the government the employees as a result of the transfer of the undertaking became employees of the companypany and ceased to be employees of the government. this position is very clear at least in the case of those employees who were companyered by the definition of workmen under the industrial disputes act in whose-cases on the transfer of the undertaking the provisions of section 25ff of that act would apply. respondent number 1 was a workman at the time of the transfer of the undertaking in the year 1962 because he was holding the post of an assistant superintendent and was drawing a salary below rs. 500 per mensem. as a workman he would under s. 25ff of the industrial disputes act become an employee of the new employer viz. the companypany which took over the undertaking from the mysore government which was the previous employer. in view of this provision of law there was in fact numberneed for any specific companytract being entered into between the mysore government and respondent number 1 terminating his government service number was there any need for a fresh companytract being entered into between the companypany and respondent number 1 to make him an employee of the companypany. 8sup.c.1/69-9 this position is further clarified by the circumstance that after the undertaking was taken over by the companypany the em- ployees who were workmen were numberlonger governed by the mysore civil service regulations. their companyditions of service were determined by the standing orders of the company which were certified under the industrial employment standing orders act 1946. these standing orders even referred to certain employees as lent officers. the reference was obviously to persons who companytinued to be in the government service but whose services were lent to the company. it was companyceded in the present case that respondent number 1 was number a lent officer as envisaged by that expression used in the standing orders. respondent number 1 further came to be governed by the works service rules. it is true that under the articles of association the governumber had the power to lay down conditions of service of the employees of the companypany but that cannumber mean that the employees of the companypany companytinued to be in the service of the government. reliance in this connection was also placed on behalf of the appellant on the fact that the name of respondent number 1 appeared in the mysore civil list under the heading iron and steel. limited bhadravati from which an inference was sought to be drawn that respondent number 1 must have companytinued in government service as otherwise his name would number have been included in the civil list. the mere inclusion in the civil list of the name of a person cannumber be held to prove that that person is in the service of the government unless evidence is tendered to show the circumstances under which the name was included in the civil list and to exclude the possibility of names of persons other than those in government service being included in the civil list. no such evidence was given in this case. on the other hand the same civil list shows that even the names of certain employees of the universities in the state are also included in it and on the face of it university employees companyld number be held to be in government service. the civil list relied upon clearly is number companyfined to names of persons in mysore government service only so that this piece of evidence relied on by the appellant also does number establish that respondent number 1 companytinued to be in government service after the undertaking was taken over by the companypany. finally there is the circumstance that it is number shown that after the undertaking was taken over by the companypany respondent number 1 companytinued to hold a lien on any government post. in fact the post which he was holding while the concern was being run by the mysore government ceased to be a government post on the transfer of the undertaking to the company and became a post under the companypany so that respondent number 1 ceased to be in government service by continuing in that post. the first companytention raised on behalf of the appellant therefore fails. on the second companytention that even if respondent number 1 was number holding a government post he must be held to be holding an office of profit under the government mr. gupte relied on the principles laid down by this companyrt in gurugobinda basu v. sankari prasad ghosal and others 1 . the companyrt in that case brought out the distinction between an office of profit under the government and a post in the service of the government by stating we agree with the high companyrt that for holding an office of profit under the government one need number be in the service of government and there need be number relationship of master and servant between them. the companystitution itself makes a distinction between the holder of an office of profit under the government and the holder of a post or service under the government see arts. 309 and 314. the constitution has also made a distinction between the holder of an office of profit under the government and the holder of an office of profit under a local or other authority subject to the companytrol of government see art. 58 2 and 66- 4 . the companyrt then proceeded to companysider the earlier decision in the case of maulana abdul shakur v. rikhab chand and anr. 1 and held - it is clear from the aforesaid observations that in maulana abdul shakurs case 2 the factors which were held to be decisive were a the power of the government to appoint a person to an office of profit or to companytinue him in that office or revoke his appointment at their discretion and b payment from out of government revenues though it was pointed out that payment from a source other than government revenues was number always a decisive factor. after this reference to maulana abdul shakurs case 2 the court proceeded to apply the principles to the facts of the case before it. in that case the question was whether the appellant was holding an office of profit under the government of india. it was pointed out that the appointment of the appellant as also his companytinuance in office rested solely with the government of india in respect of the two companypanies for which he was employed as an auditor. his remuneration was also fixed by the government. the companyrt assumed for the purposes of the appeal that the two companypanies were statutory bodies distinct from government but numbered the fact that at the same time they were government companypanies within the meaning of the indian companies act. emphasis was laid on the circumstance that in the performance of his functions the appellant was controlled by the companyptroller 1 1 964 4 s.c.r. 31 1. 2 1958 s.c.r 387 and auditor-general who himself was undoubtedly holder of an office of profit under the government though there were safeguards in the companystitution as to the tenure of his office and removability therefrom. under art. 148 of the constitution the companyptroller auditor-general was appointed by the president and he companyld be removed from office in like manner and on the like grounds as a judge of the supreme companyrt. me salary and other companyditions of service of the companyptroller auditor-general were to be such as might be determined by parliament by law and until they were so determined they were to be as specified in the second schedule to the companystitution. other provisions relating to the companytroller and auditor-general were also taken numberice of and an inference was drawn from these provisions that the companyptroller and auditor-general is himself a holder of an office of profit under the government of i ndia being appointed by the president and his administrative powers are such as may be prescribed by the rules made by the president subject to the provisions of the companystitution and of any law made by parliament. the court then held- therefore if we look at the matter from the point of view of substance rather than of form it appears to us that the appellant as the holder of an office of profit in the two government companypanies the durgapur projects ltd. and the hindustan steel limited is really under the government of india he is appointed by the government of india he is removable from office by the government of india he performs functions for two government companies under the companytrol of the companyptroller and auditor-general who himself is appointed by the president and whose administrative powers may be companytrolled by rules made by the president. thereafter the companyrt proceeded to hold- in view of these decisions we cannumber accede to the submission of mr. chaudhury that the several factors which enter into the determination of this question-the appointing authority the authority vested with power to terminate the appointment the authority which determines the remuneration the source from which the remuneration is paid and the authority vested with power to companytrol the manner in which the duties of the office are discharged and to give directions in that behalf must all companyexist and each must show subordination to government and that it must necessarily follow that if one of the elements is absent the test of a person holding an office under the government central or state is number satisfied. me cases we have referred to specifically point out that the circumstance that the source from which the remuneration is paid is number from public revenue is a neutral factor number decisive of the question. as we have said earlier whether stress will be laid on one factor or the other will depend on the facts of each case. however we have numberhesitation in saying that where the several elements the power to appoint the power to dismiss the power to companytrol and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered. mr. gupte from these views expressed by the companyrt sought to draw the inference that the primary companysideration for determining whether a person holds an office of profit under a government is the amount of companytrol which the government exercises over that officer. in the present case he relied on the circumstance that all the shares of the companypany are number only owned by the mysore government but the directors of the companypany are appointed by the government a minister was one of the first directors of the companypany the appointment of the secretary to the companypany is subject to approval of the government and even in the general working of the companypany government has the power to issue directions to the directors which must be carried out by them. it was urged that respondent number 1 was directly under the companytrol of the managing director who is himself appointed by the government and may even be a lent officer holding a permanent. post under the government. respondent number 1 thus must. be held to be working under the companytrol of the government exercised through the managing director. we are unable to accept the proposition that the mere fact that the government had companytrol over the managing director and other directors as well as the power of issuing directions relating to the working of the companypany can lead to the inference that every employee of thecompanypany is under the companytrol of the government. the power of appointment and dismissal of respondent number 1 vested in the managing director of the companypany and number in the government. even the directions for the day-to-day work to be performed by respondent number 1 companyld only be issued by the managing director of the companypany and number by the government. the indirect companytrol of the government which might arise because of the power of the government to appoint the managing director and to issue directions to the companypany in its general working does number bring respondent number 1 directly under the companytrol of the government. in gurugobinda basus case 1 the position was quite different. in that case the appellant was appointed by 1 19644s.c.311 the government and was liable to be dismissed by the govern- ment. his day-to-day working was companytrolled by the comptroller and auditor-general who was a servant of the government and was number in any way an office-bearer of the two companypanies companycerned. in fact the companyrt had no hesitation in holding that the appellant in that case was holding an office of profit under the government because the companyrt found that the several elements which existed were the power to appoint the power to dismiss the power to control and give directions as to the manner in which the duties of the office are to be performed arid the power to determine the question of remuneration. ar these elements being present the companyrt did number find any difficulty in finding that the appellant was holding an office of profit under the government. in the case before us the position is quite different. the power to appoint and dismiss respondent number 1 does number vest in the government or in any government servant. the power to companytrol and give directions as to the manner in which the duties of the office are to be performed by respondent number 1 also does number vest in the government but in an officer of the companypany. even the power to determine the question of remuneration payable to respondent number 1 is number vested in the government which can only lay down rules relating to the companyditions of service of the employees of the companypany. we are unable to agree that in these circumstances the indirect companytrol exercisable by the government because of its power to appoint the directors and to give general directions to the company can be held to make the post of superintendent safety engineering department an office of profit under the government. in this companynection a companyparison between arts. 58 2 and 66 4 and arts. 102 1 and 191 1 a of the companystitution is of significant help. in arts. 58 2 and 66 4 dealing with eligibility for election as president or vice-president of india the companystitution lays down that a person shall number be eligible for election if he holds any office of profit under the government of india or the government of any state or under any local or other authority subject to the companytrol of any of the said governments. in articles 102 1 a and 191 1 a dealing with membership of either house of parliament or state legislature the disqualification arises only if the person holds any office of profit under the government of india or the government of any state other than an office declared by parliament or state legislature by law number to disqualify its holder. thus in the case of election as president or vice-president the disqualification arises even if the candidate is holding an office of profit under a local or any other authority under the companytrol of the central government or the state government whereas in the case of a candidate for election as a member of any of the legislatures numbersuch disqualification is laid down by the companystitution if the office of profit is held under a local or any other authority under the companytrol of the governments and number directly under any of the governments. this clearly indicates that in the case of eligibility for election as a member of a legislature the holding of an office of profit under a companyporate body like a local authority does number bring about disqualification even if that local authority be under the companytrol of the govern- ment. the mere companytrol of the government over the authority having the power to appoint dismiss or companytrol the working of the officer employed by such authority does number disqualify that officer from being a candidate for election as a member of the legislature in the manner in which such disqualification companyes into existence for being elected as the president or the vice-president. the companypany in the present case numberdoubt did companye under the companytrol of the government and respondent number 1 was holding an office of profit under the companypany but in view of the distinction indicated above it is clear that the disqualification laid down under art. 191 1 a of the companystitution was number intended to apply to the holder of such an office of profit. it also appears to us that it was in view of this limited application of the disqualification laid down in arts. 102 1 a and 191 1 a of the companystitution that parliament made an additional provision in section 10 of the act by laying down that a person shall be disqualified if and for so long as he is a managing agent manager or secretary of any companypany or companyporation other than a companyoperative society in the capital of which the appropriate government has number less than twenty-five per cent share. it is to be numbered that the parliament in enacting this section limited the disqualification to a person holding the office of a managing agent manager or secretary of a companypany and number to other employees of the companypany. this provision thus gives two indications as to the scope of the disqualification laid down in arts. 102 1 a and 191 1 a of the companystitution. one is that the holding of an office in a companypany in the capital of which the government has number less than 25 per cent share is number companyered by the disqualifications laid down in arts. 102 1 a and 191 1 a as otherwise this provision would be redundant. the second is that even parliament when passing the act did number companysider it necessary to disqualify every person holding an office of profit under a government companypany. but limited the disqualification to persons holding the office of managing agent manager or secretary of the companypany. the fact that the entire share capital in the companypany in the case before us is owned by the government does number in our opinion make any difference. under the articles of association it is clear that though initially all shares were held by the government it is possible that private citizens may also hold shares in the companypany. in fact there are provisions indicating that shares held by certain shareholders can pass by succession to members of their family or can even be transferred by gift to them. the articles of association lay down that the companypany shall be a private limited companypany within the meaning of the indian companypanies act 1956 and though the shares in the capital of the companypany are under the companytrol of the board of directors they have been given the liberty to allot grant option over or otherwise dispose of the shares at such time and to such persons and in such manner and upon such terms as they may think proper. under this power the directors can allot shares to private individuals. it is under art. 34 of the articles of association that a shareholder is given the power by way of gift or for or without any pecuniary companysideration to transfer any share in the capital of the companypany to the wife or husband of such member or to a son daughter father mother grandson grand-daughter brother sister nephew or niece of such member or the wife or husband of any person standing in such relationship to the transferring member. devolution of shares on sequent to the death of a member on his heirs is also recognised by the articles of association. in these circumstances the principles which will apply to the companypany will be on a par with those applicable to other government companypanies or companypanies in which the government holds more than 25 per cent of the share capital. the company cannumber therefore be treated as either being equivalent to the government or to be an agent of the government so that the companytrol exercised by its directors or the managing director over respondent number 1 cannumber be held to be companytrol exercised by the government. mr. gupte in this companynection also urged that we should pierce the veil of the companypany being a separate juristic and legal entity apart from the government which owns all the shares in the companypany and hold that in fact the companypany should be equated with the government of mysore itself .in our opinion in the present case numberquestion of piercing the veil can arise in view of the provisions of section 10 of the act which specifically deals with disqualification for membership of persons holding offices under a companypany in which a government holds shares. that section limits the scone of disqualification to holders of three particular offices only and in companypanies in which the share holding of the government is number less than 25 per cent. this provi- sion clearly indicates that for purposes of determining disqualification for candidature to a legislature it would number be appropriate to attempt to lift the veil and equate a company with the government merely because the share-capital of the companypany is companytributed by the government.

This civil appeal arises out of an order passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in Suo Motu Contempt Case No.974 of 1999 dated 19th February, 2002. By the impugned order, the High Court held that the appellants have companymitted act of companytempt under the provisions of Contempt of Courts Act, 1971, read with Article 215 of the Constitution of India and sentenced each of them to one months simple imprisonment. However, in the interest of justice, the High Court has observed that the sentence shall remain suspended for a period of one year. It further observed that if, during the period of one year, the companytemnors are punished again in a companytempt proceeding, the order sentencing them shall become operative automatically however, if they are number companyvicted for companytempt during the period of one year, the sentence of imprisonment awarded against them shall number be carried out. This Court, while entertaining the special leave petition, granted an interim order in favour of the appellants. That interim order is still in operation. 2/- - 2 - At the time of hearing of the civil appeal, the companytemnors have filed affidavits. In that affidavits they have offered unconditional apology for having written the companytroversial news items in one of the newspapers. The companytemnors are advocates and they were also journalists at the relevant point of time. Taking into companysideration the unconditional apology offered by them, in our opinion, the sentence of imprisonment imposed on the appellants by the High Court requires to be set aside.

JUDGMENT OF THE COURT (Second Chamber) 27 March 2014 ( *1 ) ‛Request for a preliminary ruling — Charter of Fundamental Rights of the European Union — Article 47 — Right to an effective remedy — Judicial fees and deposits required for lodging appeals in employment law cases — Failure to implement European Union law — Scope of European Union law — Lack of jurisdiction of the Court’ In Case C‑265/13, REQUEST for a preliminary ruling under Article 267 TFEU from the Juzgado de lo Social No 2 de Terrassa (Spain), made by decision of 3 May 2013, received at the Court on 15 May 2013, in the proceedings Emiliano Torralbo Marcos v Korota SA, Fondo de Garantía Salarial, THE COURT (Second Chamber), composed of R. Silva de Lapuerta, President of the Chamber, K. Lenaerts (Rapporteur), Vice-President of the Court, J.L. da Cruz Vilaça, J.-C. Bonichot and A. Arabadjiev, Judges, Advocate General: N. Jääskinen, Registrar: A. Calot Escobar, having regard to the written procedure, after considering the observations submitted on behalf of: — the Spanish Government, by S. Centeno Huerta, acting as Agent, — the European Commission, by I. Martínez del Peral and H. Krämer, acting as Agents, having decided, after hearing the Advocate General, to proceed to judgment without an Opinion, gives the following Judgment This request for a preliminary ruling concerns the interpretation of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’). The request has been made in proceedings between Mr Torralbo Marcos and Korota SA (‘Korota’) and the Wages Guarantee Fund (‘the Fogasa’) concerning payment of the compensation due to Mr Torralbo Marco following his dismissal by Korota, which is subject to court-supervised administration proceedings. Legal context European Union law Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer (OJ 2008 L 283, p. 36) provides, in Article 1(1): ‘This Directive shall apply to employees’ claims arising from contracts of employment or employment relationships and existing against employers who are in a state of insolvency within the meaning of Article 2(1).’ Under Article 2(1) of that directive: ‘For the purposes of this Directive, an employer shall be deemed to be in a state of insolvency where a request has been made for the opening of collective proceedings based on insolvency of the employer, as provided for under the laws, regulations and administrative provisions of a Member State, and involving the partial or total divestment of the employer’s assets and the appointment of a liquidator or a person performing a similar task, and the authority which is competent pursuant to the said provisions has: (a) either decided to open the proceedings, or (b) established that the employer’s undertaking or business has been definitively closed down and that the available assets are insufficient to warrant the opening of the proceedings.’ Under the first paragraph of Article 3 of the directive: ‘Member States shall take the measures necessary to ensure that guarantee institutions guarantee, subject to Article 4, payment of employees’ outstanding claims resulting from contracts of employment or employment relationships, including, where provided for by national law, severance pay on termination of employment relationships.’ Spanish law Article 2 of Law 1/1996 of 10 January 1996 on legal aid (Ley 1/1996, de 10 de enero 1996, de asistencia jurídica gratuita) of 10 January 1996 (BOE No 11, 12 January 1996, p. 793; ‘Law 1/1996’), entitled ‘Scope ratione personae’, provides: ‘The following persons shall be entitled to legal aid, on the terms and within the ambit of this law and of the relevant treaties and international conventions [Or. 9] to which Spain is a party: … (d) additionally, in employment cases, workers and beneficiaries of the social security system, both for the purpose of representation in court proceedings and for the purpose of bringing actions to enforce their employment rights in insolvency proceedings.’ Article 6 of Law 1/1996, entitled ‘Substantive content of the right’, is worded as follows: ‘The right to legal aid includes the following benefits: … 5. Exemption from the payment of judicial fees and from the payment of deposits required for lodging appeals.’ Under the heading ‘Ambit of the fee in respect of the exercise of judicial powers in civil, administrative and employment matters’, Article 1 of Law No 10/2012 of 20 November 2012 regulating certain fees relating to the administration of justice and to the National Institute of Toxicology and Forensic Science (Ley 10/2012, de 20 de noviembre 2012, por la que se regulan determinadas tasas en el ámbito de la Administración de Justicia y del Instituto Nacional de Toxicología y Ciencias Forenses, BOE No 280, 21 November 2012, p. 80820; ‘Law 10/2012’), provides: ‘The fee in respect of the exercise of judicial powers in civil, administrative and employment matters is a State fee and shall be chargeable in the same way throughout the [Or. 4] national territory in the circumstances referred to herein. ...’ Article 2 of that Law, entitled ‘Event giving rise to the fee’, reads as follows: ‘The fee shall be chargeable upon the exercise of judicial powers ensuing from the following procedural steps: ... (f) The lodging of appeals (recursos de suplicación) and appeals on a point of law in employment cases.’ Article 3 of that Law, entitled ‘Person liable to pay the fee’, provides, in paragraph 1 thereof: ‘Any person who seeks the exercise of judicial powers and takes the step constituting the chargeable event shall be liable to pay the fee.’ Article 4(2) and (3) of that Law, which deals with the exemption from the fee, states: ‘2. The following persons are in any event exempt from paying the fee: (a) Persons entitled to receive legal aid who can show that they meet the conditions to do so in accordance with the legislation applicable. … 3. In employment cases, self-employed and employed workers shall be exempt from paying 60% of the amount of the fee payable in respect of lodging appeals and appeals on a point of law.’ Article 5(3) of Law 10/2012, dealing with payment of the fee, provides: ‘In employment cases, the fee shall become due at the time the appeal or the appeal on a point of law is lodged.’ The basis of assessment is defined in Article 6 of that Law. Article 7 thereof, which concerns the determination of the amount of the fee, sets it, in principle, at EUR 500 for lodging an appeal in ‘suplicación’ in employment law. A sum corresponding to 0.1% of the amount of the basis of assessment is added to that amount with a ceiling of EUR 2 000 when the person liable to pay the fee is a natural person. Article 8 of that Law deals with the system for ‘[s]elf-assessment’ and payment of the fee. The dispute in the main proceedings and the questions referred for a preliminary ruling Korota has been subject to court-supervised administration proceedings since 16 June 2008. On 16 June 2010, the Juzgado de lo Mercantil No 4 de Barcelona (Commercial Court 4, Barcelona), issued a judgment, the operative part of which states: ‘The court endorses the arrangement proposed by Korota on 9 April 2010 and accepted by the creditors, and requires Korota to report to the court every six months concerning the company’s compliance with this arrangement. The insolvency administration shall be discontinued as from the date of the judgment.’ A conciliation settlement between Mr Torralbo Marcos and Korota, confirmed by the Registry of the referring court on 25 June 2012 (‘the conciliation settlement’) states: ‘1. [Korota] reaffirms the reasons for the dismissal and, for the purposes of reaching a settlement only, acknowledges that the dismissal was unfair and offers the sum of EUR 14 090 as compensation, together with EUR 992.66 in lieu of notice, together with EUR 6 563 as net amounts claimed in this litigation. 2. [Mr Torralbo Marcos accepts those sums and the parties agree that the employment contract between them shall be deemed to have been terminated with effect from 27 February 2012.’ …’ On 3 October 2012, Mr Torralbo Marcos applied to the referring court for enforcement of the conciliation settlement on the ground that Korota had failed to meet its obligations with its terms. On 13 November 2012 the referring court ordered the enforcement of the conciliation settlement against Korota. On the same day, however, it stayed the enforcement proceedings on the ground that Korota was insolvent and no assets belonging to it had been seized before the insolvency procedure. By a decision of the same date of the Registry of the referring court, Mr Torralbo Marcos was informed that he could appear before the competent Juzgado de lo Mercantil to enforce his rights against Korota. Mr Torralbo Marcos lodged an appeal against that order on the grounds that, the Juzgado de lo Mercantil No 4 de Barcelona having endorsed the arrangement with creditors and ordered that the insolvency administration be discontinued, enforcement must proceed in accordance with Article 239 of the Law governing employment courts (Ley Reguladora de la Jurisdicción Social). By order of 3 January 2013, the referring court dismissed the appeal, holding that the order of 13 November 2012 remained effective in the absence of any order bringing the insolvency proceedings to an end. Mr Torralbo Marcos indicated his intention of lodging an appeal (recurso de suplicación) against the order of 3 January 2013 before the Tribunal Superior de Justicia de Cataluña (High Court of Justice, Catalonia). Since he had not supplied a certificate from the tax administration to prove payment of the judicial fees required under Law 10/2012, Mr Torralbo Marcos was requested, by a decision of 13 March 2013, to produce that certificate within five days. On 22 March 2013, Mr Torralbo Marcos lodged an appeal (recurso de reposición) against that decision, arguing, essentially, that he was not liable to pay the judicial fees because, firstly, he should be granted legal aid in his capacity as a worker and beneficiary of the social security scheme, in accordance with Article 2(d) of Law 1/1996 and, secondly, Law 10/2012 was incompatible with Article 47 of the Charter in that it constitutes a disproportionate obstacle, contrary to the fundamental right to an effective remedy guaranteed by that article. The referring court asks whether national legislation, such as that at issue in the main proceedings, is consistent with Article 47 of the Charter to where it requires employees to pay a judicial fee for lodging an appeal in enforcement proceedings with a view to obtaining a legal declaration of the insolvency of the employer in order to allow access to the competent guarantee institution, in accordance with Directive 2008/94. In those circumstances, the Juzgado de lo Social No 2 de Terrassa (Labour Court No 2, Terrassa) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Are Articles 1, 2(f), 3(1), 4(2)(a), 4(3), 5(3), 6, 7 and 8(1) and 8(2) of [Law 10/2012] contrary to Article 47 of the Charter of Fundamental Rights of the European Union in that they do not, firstly, permit a national court to adjust judicial fees or to assess reasons of proportionality (relating to the basis for charging the fees on the part of the State or to their amount as constituting an obstacle to obtaining an effective remedy) for the purposes of exemption; secondly, have regard to the principle of effectiveness in the application of provisions of Union law; or, thirdly, assess the importance of the proceedings to the parties in the light of the circumstances when payment of judicial fees is a prerequisite to obtaining leave to proceed with the appeal lodged? (2) Are Articles 1, 2(f), 3(1), 4(2)(a), 4(3), 5(3), 6, 7 and 8(1) and 8(2) of [Law 10/2012] contrary to Article 47 of the Charter of Fundamental Rights of the European Union in that the latter applies to special procedures, as in the case of an employment court or tribunal, in which Union law is commonly applied as a fundamental aspect of balanced economic and social development in the [European Union]? (3) In connection with the foregoing questions, is it open to a court such as the referring court to refrain from applying legislation such as the legislation at issue which does not permit a national court, firstly, to adjust judicial fees or to assess reasons of proportionality (relating to the basis for charging the fees on the part of the State or to their amount as constituting an obstacle to obtaining an effective remedy) for the purposes of exemption; secondly, to have regard to the principle of effectiveness in the application of provisions of Union law; or, thirdly, assess the importance of the proceedings to the parties in the light of the circumstances when payment of judicial fees is a prerequisite to obtaining leave to proceed with the appeal in ‘suplicación’ lodged?’ The jurisdiction of the Court of Justice According to the established case‑law of the Court, in the context of a request for a preliminary ruling under Article 267 TFEU, the Court may interpret Union law only within the limits of the powers conferred upon it (see Case C‑400/10 PPU McB EU:C:2010:582, paragraph 51, and orders in Case C‑14/13 Cholakova EU:C:2013:374, paragraph 21, and Case C‑371/13 Schuster & Co Ecologic EU:C:2013:748, paragraph 14). In this regard, it should be recalled that the Charter’s scope so far as concerns action of the Member States is defined in Article 51(1) thereof, according to which the provisions of the Charter are addressed to Member States only when they are implementing European Union law (Case C‑617/10 Åkerberg Fransson EU:C:2013:105, paragraph 17). Article 51(1) of the Charter confirms the Court’s settled case-law, which states that the fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by European Union law, but not outside such situations (see Åkerberg Fransson EU:C:2013:105, paragraph 19, and the order in Case C‑258/13 Sociedade Agrícola e Imobiliária da Quinta de S. Paio, EU:C:2013:810, paragraph 19). Where a legal situation does not fall within the scope of Union law, the Court has no jurisdiction to rule on it and any Charter provisions relied upon cannot, of themselves, form the basis for such jurisdiction (see, to that effect, Åkerberg Fransson EU:C:2013:105, paragraph 22; and the orders in Sociedade Agrícola e Imobiliária da Quinta de S. Paio EU:C:2013:810, paragraph 20; Joined Cases C‑614/12 and C‑10/13 Dutka and Sajtos EU:C:2014:30, paragraph 15; and Case C‑332/13 Weigl EU:C:2014:31, paragraph 14). In consequence, it is necessary to consider whether the legal situation which gave rise to the main proceedings falls within the scope of European Union law. In the context of the present request for a preliminary ruling, the national legislation at issue in the main proceedings governs, in general, certain fees connected with the administration of justice. It is not intended to implement provisions of European Union law. In addition, European Union law does not contain any specific rules in that area or any which are likely to affect that national legislation. Furthermore, the objective of the main proceedings does not concern the interpretation or application of a rule of Union law other than those set out in the Charter (see, by analogy, the order in Sociedade Agrícola e Imobiliária da Quinta de S. Paio EU:C:2013:810, paragraph 21). In addition, unlike the matter which gave rise to the judgment in Case C‑279/09 DEB EU:C:2010:811, referred to by the referring court, which concerned an application for legal aid in proceedings involving State responsibility brought under European Union law, it is apparent from the order for reference that the judicial fees and deposits required for lodging appeals in the main proceedings concern the lodging of an appeal in ‘suplicación’ against the order of 3 January 2013, by which the referring court rejecting the application for enforcement of the conciliation settlement, brought by Mr Torralbo Marcos on the basis of national law, namely Article 239 of the Law governing employment courts. The referring court does indeed state that the final objective of the legal steps taken by Mr Torralbo Marcos is to obtain the intervention of the Fogasa in Korota’s insolvency, in accordance with Article 3 of Directive 2008/94. However, it must be noted that, at the present stage of the main proceedings, the situation at issue does not fall within the scope of that directive or, in general, of the scope of European Union law. As the European Commission has noted, it follows from the terms of Article 2(1) of Directive 2008/94 that whether or not an employer must be deemed to be in a state of insolvency, for the purposes of that directive, is a matter of the national law and of a decision or finding of the competent national authority. Although it is true that, on the basis of the information in the order for reference, Korota was made subject to court-supervised administration proceedings in June 2008, that order does not, however, contain any concrete information permitting the view to be taken that the undertaking is, at the present stage of the main proceedings, insolvent as regards the relevant provisions of Spanish law. On the contrary, it follows from the statement of the referring court, namely that the purpose of the appeal lodged by Mr Torralbo Marcos seeking the enforcement of the conciliation settlement is to have a legal finding of Korota’s insolvency, that that undertaking is not, at this stage, deemed to be insolvent under Spanish law. The fact that, by the steps he has taken, Mr Torralbo Marcos is seeking, according to the statements of the referring court, to obtain such a declaration of insolvency in order to benefit from the Fogasa’s intervention in accordance with Article 3 of Directive 2008/94 is not sufficient to allow the view to be taken that the situation at issue in the main proceedings, at their present stage, falls within the scope of the directive and, consequently, of European Union law. It must also be pointed out that, according to the information supplied by the referring court, in its order of 3 January 2013, which has been the subject of the appeal in ‘suplicación’ brought by Mr Torralbo Marcos, that court refused to grant his application for enforcement of the conciliation settlement on the ground, in essence, that that enforcement must be pursued on the basis of a decision of the competent commercial court, before which Mr Torralbo Marcos was requested to pursue his claim. That order does not prejudice the question of Korota’s insolvency, nor any right Mr Torralbo Marcos may have to have the competent guarantee institution pay the unpaid social debt of the undertaking, in accordance with Directive 2008/94, should Korota be declared insolvent pursuant to the relevant national provisions. It follows from all those considerations that the legal situation which gave rise to the main proceedings does not fall within the scope of European Union law. The Court therefore has no jurisdiction to answer the questions referred by the Juzgado de lo Social No 2 de Terrassa. Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Second Chamber) hereby rules: The Court of Justice of the European Union has no jurisdiction to answer the questions referred for a preliminary ruling by the Juzgado de la Social No 2 de Terrassa (Spain). [Signatures] ( *1 ) Language of the case: Spanish.

Leave granted. Challenge in this appeal is to the final judgment and order dated 23rd October, 2008, delivered by the High Court of the Judicature at Bombay in Criminal Appeal No.431 of 2003. By the impugned judgment, the High Court has upheld the companyviction of the appellant for an offence punishable under Section 302 of the Indian Penal Code, 1860 for short the IPC . The prosecution version in nutshell is as follows The appellant, an agricultural labourer was residing in a one room tenement near the fields of his employer with his family, companyprising his wife Rukhmabai - the deceased two daughters Jyoti and Deepa son Santosh and mother. According to the prosecution the appellant was in the habit of beating his wife over petty matters after companysuming liquor. On the fateful day i.e. 2nd June, 2002, the appellant and his wife visited town Yaolkhed in district Akola. They returned to the house in a drunken companydition. The appellant questioned his wife as to why she had companysumed liquor, which led to a verbal duel between them. The appellant got angry, picked up an axe and assaulted her with the handle of the axe. The incident happened in presence of the two daughters, who were present in the room. The daughters went to inform their maternal grandparents about the occurrence. Rukhmabai succumbed to her injuries on the same day at 5.00 p.m. The appellant went to the police station and lodged a report that his wife had died due to intoxication on account of excessive drinking of liquor. However, another report was lodged with the police station by a neighbour of the parents of the deceased against the appellant for having companymitted the murder of his wife. During the companyrse of investigation, the handle of the axe was got recovered by the appellant along with his bloodstained shirt and a piece of sari. On companypletion of investigation, charge-sheet was filed against the appellant. The case was companymitted to the Sessions Court. Charge for an offence punishable under Section 302 IPC was framed. The appellant pleaded number guilty and claimed trial. The prosecution, in order to establish the guilt of the appellant, examined as many as 13 witnesses. One of the daughters of the appellant was also examined as eye-witness but she did number support the case of the prosecution. The Trial Court on the basis of circumstantial evidence, came to the companyclusion that the appellant had companymitted the murder of his wife and thus, companyvicted him for an offence punishable under Section 302 IPC. The appellant was sentenced to undergo rigorous imprisonment for life and to pay a fine of Rs.500/- with default stipulation. Appellants appeal having been dismissed by the High Court, he is before us in this appeal. We have heard learned companynsel for the parties. Learned companynsel for the appellant submits that both the companyrts below were in error in holding the appellant guilty of an offence punishable under Section 302 IPC. It is urged that the sole eye-witness, namely, Deepa, the daughter of the appellant, has number supported the case of the prosecution and there is numberother evidence on record to bring home an offence under Section 302 IPC against the appellant. Learned companynsel has pleaded that even if the prosecution version is accepted in its entirety, a case under Section 302 IPC is number made out against the appellant because the occurrence took place in the companyrse of a sudden quarrel in the heat of passion and, therefore, Exception 4 to Section 300 is clearly attracted. According to the learned companynsel, at best, the case would fall either under Section 302 Part II or Part I of the IPC and, therefore, the appeal deserves to be allowed to that extent. Learned companynsel for the State, on the other hand, supported the decisions of the companyrt below. It was submitted that both the companyrts have rightly found the appellant guilty of murdering his wife and numberinterference in the case is called for. Having heard the learned companynsel and perused the material on record, in our opinion, the appeal deserves to be partly allowed. As numbered above, even according to the prosecution, there used to be frequent quarrels between the appellant and his deceased wife. On the date of occurrence, finding his wife to be in an inebriated companydition, he got infuriated and in the heat of passion, assaulted her with wooden handle of the axe. According to the medical evidence of Dr. Rehman Khan PW-11 , who had companyducted autopsy over the body of the deceased, the cause of the death was due to haemorrhagic shock caused by haemorrhage due to fracture of left shaft femur. In his opinion, the injury which proved to be fatal, was possible by the handle of an axe. He admitted that other injuries sustained by the deceased were number sufficient in the ordinary companyrse of nature to cause death but clarified that haemorrhagic shock was caused because of companylection of blood in thorarid cavity and fracture of shaft femur. Taking into account all these factors and in view of the totality of facts and circumstances of the case, in our opinion, the appellant has companymitted an offence punishable under Section 304 Part I of the IPC and number the offence punishable under Section 302 IPC.

Case T-138/03 É. R. and Others v Council of the European Union and Commission of the European Communities (Common agricultural policy – Animal health – Bovine spongiform encephalopathy (‘mad cow disease’) – New variant Creutzfeldt-Jakob disease – Action for damages – Non-contractual liability – Community liability in the absence of unlawful conduct of its institutions – Damage – Causal link – Procedural defects – Parallel national proceedings – Limitation period – Inadmissibility) Judgment of the Court of First Instance (First Chamber), 13 December 2006 Summary of the Judgment 1. Procedure – Application initiating proceedings – Formal requirements (Statute of the Court of Justice, Art. 21; Rules of Procedure of the Court of First Instance, Art. 44(1)(c)) 2. Actions for damages – Autonomous form of action – Exhaustion of national rights of action – Exception – Impossibility of obtaining compensation before a national court (Arts 235 EC and 288, second para., EC) 3. Actions for damages – Limitation period – Point from which time starts to run (Statute of the Court of Justice, Art. 46) 4. Non-contractual liability – Conditions (Art. 288, second para., EC) 5. Non-contractual liability – Conditions (Art. 288, second para., EC) 6. Non-contractual liability – Conditions (Art. 288, second para., EC) 1. Under Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, every application must state the subject-matter of the dispute and contain a brief statement of the pleas in law on which it is based. In order to guarantee legal certainty and sound administration of justice it is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself. In order to satisfy those requirements an application seeking compensation for damage caused by a Community institution must state the evidence from which the conduct which the applicant attributes to the institution can be identified, the reasons for which the applicant considers that there is a causal link between the conduct and the damage which he claims to have suffered, and the nature and extent of that damage. (see para. 34) 2. The action for damages under Article 235 EC and the second paragraph of Article 288 EC was established as an autonomous remedy with a particular function to fulfil within the system of remedies, whose exercise is subject to conditions imposed in view of its specific objective. It must however be appraised with regard to the entire system for the judicial protection of the individual and its admissibility may thus, in some cases, be subject to the prior exhaustion of national remedies that are available for obtaining annulment of a decision of a national authority. In order for this to be the case, it is a necessary precondition that those national remedies give effective protection to the individuals concerned and that they are capable of leading to compensation for the damage alleged. That is not the case where, first, compensation for the damage alleged by the applicants cannot be obtained, even in part, through the annulment of one or more specific measures of a national authority, and, second, the action for damages brought by the applicants is based on allegedly unlawful conduct of the Council and the Commission. Given in particular that the Community judicature has exclusive jurisdiction under Article 288 EC to hear actions seeking compensation for damage attributable to the Community, remedies available under national law cannot in such a case automatically guarantee effective protection of the applicants’ rights, that is to say in particular compensation for all the damage alleged by them. Where the same damage is the subject of two actions for compensation, one against a Member State before a national court and the other against the Community before the Community judicature, it may prove necessary, before deciding on the amount of the damage for which the Community will be held liable, to wait until the national court has given judgment on any liability on the part of the Member State, in order to avoid the applicant’s being insufficiently or excessively compensated because of the different assessment of two different courts. That question does not however concern the admissibility of the action brought before the Community judicature, but merely, where relevant, the final decision on the amount of the compensation it should grant. (see paras 40-42) 3. The five-year limitation period under Article 46 of the Statute of the Court of Justice for proceedings against the Community in matters arising from non-contractual liability cannot begin, however, before all the requirements governing the obligation to make good the damage are satisfied and, in particular, in cases where liability stems from legislative measures, before the injurious effects of the measures have been produced. Where the victim could have known only belatedly of the event giving rise to the damage, the limitation period cannot begin for that person before he could have become aware of it. (see para. 49) 4. Non-contractual liability of the Community for the unlawful acts of its institutions and servants, for the purposes of the second paragraph of Article 288 EC, depends on fulfilment of a set of conditions, namely: the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between that conduct and the damaged complained of. As regards the first of those conditions, the case-law requires there to be a sufficiently serious breach of a rule of law intended to confer rights on individuals. So far as concerns the requirement that the breach must be sufficiently serious, the decisive test for determining whether that requirement is met is whether the Community institution concerned has manifestly and gravely disregarded the limits on its discretion. Where that institution has only a considerably reduced or even no discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach. Where one of those conditions is not satisfied the action must be dismissed in its entirety and it is unnecessary to examine the other conditions. (see paras 99-101) 5. There is a causal link for the purposes of the second paragraph of Article 288 EC where there is a definite and direct causal nexus between the fault committed by the institution concerned and the injury pleaded, the burden of proof of which rests on the applicants. In an area such as that of animal and human health, the existence of such a link must be established from an analysis of the conduct that could be required of the Community institutions on the basis of the state of scientific knowledge at the time. Moreover, in cases where the conduct which allegedly causes the damage pleaded consists in refraining from taking action, it is particularly necessary to be certain that that damage was actually caused by the inaction complained of and could not have been caused by conduct separate from that alleged against those institutions. (see paras 103, 133-134) 6. When damage is caused by conduct of the Community institutions not shown to be unlawful, the Community can incur non-contractual liability if the conditions as to sustaining actual damage, to the causal link between that damage and the conduct of the Community institutions and to the unusual and special nature of the damage in question are all met. (see para. 153) JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber) 13 December 2006 (*) (Common agricultural policy – Animal health – Bovine spongiform encephalopathy (‘mad cow disease’) – New variant Creutzfeldt-Jakob disease – Action for damages – Non-contractual liability – Community liability in the absence of unlawful conduct of its institutions – Damage – Causal link – Procedural defects – Parallel national proceedings – Limitation period – Inadmissibility) In Case T‑138/03, É. R., O. O., J. R., A. R., B. P. R., residing in Vaulx-en-Velin (France), T. D., J. D., D. D., V. D., residing in Palaiseau (France), D. E., É. E., residing in Ozoir-la-Ferrière (France), C. R., residing in Vichy (France), H. R., M. S. R., I. R., B. R., M. R., residing in Pau (France), C. S., residing in Paris (France), represented by F. Honnorat, lawyer, applicants, v Council of the European Union, represented initially by M. Balta and F. Ruggeri Laderchi, and subsequently by M. Balta and F. Florindo Gijón, acting as Agents, and Commission of the European Communities, represented initially by D. Booss and G. Berscheid, and subsequently by G. Berscheid and T. van Rijn, acting as Agents, defendants, APPLICATION for compensation under Article 235 EC and the second paragraph of Article 288 EC for damage allegedly suffered by the applicants as a consequence of the infection and subsequent death of members of their families who developed a new variant of Creutzfeldt-Jakob disease linked to the appearance and spread within Europe of bovine spongiform encephalopathy, for which the Council and the Commission are alleged to be liable, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber), composed of R. García-Valdecasas, President, J.D. Cooke and I. Labucka, Judges, Registrar: J. Palacio González, Principal Administrator, having regard to the written procedure and further to the hearing on 16 February 2006, gives the following Judgment Facts I – Outbreak of bovine spongiform encephalopathy and new variant Creutzfeldt-Jakob disease, and Community and national measures to combat those diseases 1 Bovine spongiform encephalopathy (‘BSE’), or ‘mad cow disease’, is one of a group of diseases known as transmissible spongiform encephalopathies, which are characterised by brain degeneration and a sponge-like appearance of the nerve cells under microscopic analysis. These diseases are preceded by a silent incubation period, during which the infected, apparently healthy, subjects show no clinical sign of the disease. The probable origin of BSE was a change in the preparation of cattle feed, which contained proteins derived from sheep infected with scrapie. Transmission of the disease came about mainly through the ingestion of feed, in particular meat-and-bone meal, containing the infective agent that had not been eliminated. 2 BSE was detected for the first time in the United Kingdom in 1986. The epizootic disease developed rapidly in that country, rising from 442 cases at the end of 1987 to a maximum annual incidence of nearly 37 000 cases in 1992. Since the early 1990s cases of BSE have been recorded in other Member States. 3 In July 1988 the United Kingdom decided to prohibit the sale of feed for ruminants containing proteins derived from ruminants and to prohibit breeders from feeding ruminants with such feed (the ‘ruminant feed ban’ contained in the Bovine Spongiform Encephalopathy Order 1988, SI 1988/1039, and subsequently amended). 4 The Community institutions have also, since July 1989, adopted provisions to deal with BSE. Most of these measures were taken on the basis of Council Directive 89/662/EEC of 11 December 1989 concerning veterinary checks in intra-Community trade with a view to the completion of the internal market (OJ 1989 L 395, p. 13) and Council Directive 90/425/EEC of 26 June 1990 concerning veterinary and zootechnical checks applicable in intra-Community trade in certain live animals and products with a view to the completion of the internal market (OJ 1990 L 224, p. 29), which allow the Commission to take protective measures where there is a risk to animals or to human health. 5 Thus, Commission Decision 89/469/EEC of 28 July 1989 concerning certain protection measures relating to BSE in the United Kingdom (OJ 1989 L 225, p. 51) introduced a number of restrictions on intra-Community trade in bovine animals born in the United Kingdom before July 1988. That decision was amended by Commission Decision 90/59/EEC of 7 February 1990 (OJ 1990 L 41, p. 23), which extended the ban on exporting bovine animals from the United Kingdom to include any bovine animal over the age of six months. Commission Decision 90/261/EEC of 8 June 1990 amending Decision 89/469 and Decision 90/200/EEC concerning additional requirements for some tissues and organs with respect to BSE (OJ 1990 L 46, p. 29) provided that observance of that ban was to be guaranteed by the affixation to the animals of a special mark and by the use of a system of computer records in order to enable animals to be identified. Furthermore, Commission Decision 90/134/EEC of 6 March 1990 (OJ 1990 L 76, p. 23) added BSE to the list of diseases notifiable under Council Directive 82/894/EEC of 21 December 1982 on the notification of animal diseases within the Community (OJ 1982 L 378, p. 58). 6 Commission Decision 90/200/EEC of 9 April 1990 concerning additional requirements for some tissues and organs with respect to BSE (OJ 1990 L 105, p. 24) introduced a series of measures designed to limit intra-Community trade between the United Kingdom and other Member States in certain tissues and organs – brain, spinal cord, tonsils, thymus, spleen, intestines – derived from bovine animals aged more than six months at slaughter. It also prohibited sending other tissues and organs for uses other than human consumption, and provided that any bovine animal which showed clinical suspicion of BSE was to be slaughtered separately and its brain was to be examined for evidence of the disease. If BSE was confirmed, the decision required the animal’s carcass and offal to be destroyed. Commission Decision 92/290/EEC of 14 May 1992 concerning certain protection measures relating to bovine embryos in respect of BSE in the United Kingdom (OJ 1992 L 152, p. 37) required all the Member States to ensure that no embryos of the bovine species derived from females in which BSE was suspected or confirmed were sent to other Member States. As regards the United Kingdom, that decision prohibited the export of embryos derived from animals born before 18 July 1988 and required the adoption of the measures necessary in order to identify the donor animals. 7 Commission Decision 94/381/EC of 27 June 1994 concerning certain protection measures with regard to BSE and the feeding of mammalian derived protein (OJ 1994 L 172, p. 23) prohibited the feeding of mammalian derived protein to ruminants throughout the Community; however, Member States which enforced a system that made it possible to distinguish between animal protein from ruminant and non-ruminant species could be authorised by the Commission to permit the feeding to ruminants of protein from other mammalian species. 8 In 1995 the Creutzfeldt-Jakob Disease (‘CJD’) Surveillance Unit in Edinburgh (United Kingdom) identified 10 cases of CJD. This incurable, fatal neurological disease attacks humans and belongs to the family of human spongiform encephalopathies. The cases identified displayed a form that was sufficiently different from classic CJD to be described as new variant CJD (‘nvCJD’). The patients were all young (19 to 41 years old, 29 years old on average), they had suffered from the disease for a relatively long period (13 months on average), and their disease was of a clinical type that differed from classic CJD and displayed completely new histological features that were discovered at autopsy. 9 In a statement which it issued on 20 March 1996, the Spongiform Encephalopathy Advisory Committee (‘the SEAC’), an independent scientific body which is responsible for advising the United Kingdom Government on BSE, referred to these 10 cases of nvCJD, noting that ‘although there [was] no direct evidence of a link … the most likely explanation at [that stage was] that these cases [were] linked to exposure to BSE before the introduction of the [specified bovine offal] ban in 1989’. 10 On 27 March 1996 the Commission adopted Decision 96/239/EC on emergency measures to protect against BSE (OJ 1996 L 78, p. 47), which prohibited the export of any bovine animal and any meat of bovine animals or products obtained from them from the territory of the United Kingdom to other Member States or third countries. That decision concerned in particular: (i) live bovine animals, their semen and embryos; (ii) meat of bovine animals slaughtered in the United Kingdom; (iii) products obtained from bovine animals slaughtered in the United Kingdom which were liable to enter the animal feed or human food chain, and materials destined for use in medicinal products, cosmetics or pharmaceutical products; and (iv) mammalian derived meat-and-bone meal. 11 The European Parliament set up a temporary committee of inquiry into BSE on 18 July 1996. On 7 February 1997 that committee adopted a report on alleged contraventions or maladministration in the implementation of Community law in relation to BSE, without prejudice to the jurisdiction of the Community and national courts. The report pointed to poor management of the BSE crisis by the Commission, the Council and the United Kingdom authorities and criticised the operation of the Community committees responsible for veterinary and animal health matters. 12 Commission Decision 97/534/EC of 30 July 1997 on the prohibition of the use of material presenting risks as regards transmissible spongiform encephalopathies (OJ 1997 L 216, p. 95) prohibited the use of what was known as ‘specified risk material’ (‘SRM’), namely, first, the skull, including the brain and eyes, tonsils and spinal chord of bovine animals aged over 12 months, and of ovine and caprine animals which were aged over 12 months or had a permanent incisor tooth erupted through the gum and, secondly, the spleens of ovine and caprine animals. From the entry into force of that decision, the use of SRM for any purpose was prohibited, as was the use of the vertebral column of bovine, ovine or caprine animals for the production of mechanically recovered meat. In addition, SRM was to be subject to special treatment with a view to its destruction and was to be incinerated, without prejudice to further action Member States might take in relation to animals slaughtered on their own territory. The date initially laid down for the entry into force of that decision, 1 January 1998, was successively postponed until 30 June 2000. 13 On 29 June 2000, however, the Commission adopted Decision 2000/418/EC regulating the use of material presenting risks as regards transmissible spongiform encephalopathies and amending Decision 94/474/EC (OJ 2000 L 158, p. 76); the latter decision, concerning certain protection measures relating to BSE and repealing Decisions 89/469 and 90/200, had been adopted by the Commission on 27 July 1994 (OJ 1994 L 194, p. 96). Decision 2000/418 repealed and replaced Decision 97/534 and finally regulated the use of SRM, by defining the materials from bovine, ovine and caprine animals that were to be removed and destroyed after 1 October 2000, under a special process designed to ensure that BSE was not transmitted. That decision also prohibited the use of bones of the head and vertebral columns of such animals in certain cases and the use of certain slaughter techniques. 14 On 4 December 2000 the Council adopted Decision 2000/766/EC concerning certain protection measures with regard to transmissible spongiform encephalopathies and the feeding of animal protein (OJ 2000 L 306, p. 32), which entered into force on 1 January 2001 and required the Member States to prohibit the feeding of processed animal proteins to farmed animals kept, fattened or bred for the production of food. 15 On 13 September 2001 the Court of Auditors adopted Special Report No 14/2001 on BSE (OJ 2001 C 324, p. 1). In that report the Court of Auditors carried out a review of the BSE measures introduced and implemented by the European Union in order to identify and manage the risk of BSE occurring, being propagated and posing a risk to human and animal health. The Court of Auditors found in particular that the Commission’s BSE strategy was generally sound and based on available scientific knowledge, but its effectiveness had been hampered by inadequate implementation by the Member States and by a lack of effective measures available to the Commission to enforce corrective action on Member States. II – Particular circumstances of the applicants and proceedings instituted before the French administrative and judicial authorities 16 The applicants brought this action in their capacity as indirect victims and heirs of five persons who died of nvCJD in France between 1996 and 2002. 17 É. R., O. O., J. R., A. R. and B. P. R. are, respectively, the father, mother and three brothers of H. E. R., who died on 4 January 1996 aged 27 years. 18 T. D., J. D., D. D. and V. D. are, respectively, the mother, brothers and sister of L. D., who died on 4 February 2000 aged 36 years. 19 D. E. and É. E. are the parents of A. E., who died on 25 April 2001 aged 19 years. They are acting also as the statutory representatives of their minor daughter J. E., sister of A. E. 20 C. R. is the widow of F. R., who died on 10 February 2002 aged 36 years. She is acting also as the statutory representative of D. R., their minor child. H. R., M. S. R., I. R., B. R. and M. R. are, respectively, the father, mother and sisters of F. R. 21 C. S. is the widower of S. C. S., who died on 14 December 2002 aged 32 years. He is also acting as statutory representative of their minor children, M. S., S. S. S. and A. S. 22 The applicants have brought actions before the French administrative courts for the award of damages against the authorities of that State for their allegedly unlawful conduct in failing to adopt appropriate measures to prevent the risks presented by BSE. On 5 October 2005 the Tribunal administratif de Paris (Administrative Court, Paris, France) dismissed the applicants’ claims, finding that the dates on which the victims were infected could have been prior to May 1988, the time to which the French Republic’s failure to act pleaded by the applicants went back. The applicants appealed against those judgments to the Cour administrative d’appel de Paris (Administrative Court of Appeal, Paris). Furthermore, they made a civil party complaint in the context of a criminal investigation conducted by the Vice-President responsible for investigation at the Tribunal de grande instance de Paris (Regional Court, Paris) concerning a charge of manslaughter of the persons infected with nvCJD. 23 Following commitments made by the French Ministry of Health, the Family and People with Disabilities in letters dated 25 February and 7 July 2004, ‘solidarity allowances’ were granted to the applicants by the French Minister for the Interior in June 2004 and January 2005. Those compensation payments were made in respect of the damage suffered by the victims and their heirs as a result of nvCJD and were awarded following the advice of the Committee for Compensation of Victims of Iatrogenic Creutzfeldt-Jakob Disease following Growth Hormone Treatment, whose remit had been extended to include assessment of the harm suffered by persons infected with nvCJD. The total amount of the compensation payments was EUR 1 431 000. Procedure and forms of order sought 24 The applicants brought the present action by application lodged at the Registry of the Court of First Instance on 24 April 2003. 25 By letter lodged at the Registry of the Court of First Instance on 22 May 2003, C. S. applied for legal aid for himself and for his three minor children, on whose behalf he had brought the action as their statutory representative. By order of 9 February 2004 of the President of the Fifth Chamber, the Court of First Instance granted them legal aid. 26 In their pleadings the defendants asked for the present proceedings to be stayed until the outcome was known of the actions for damages brought by the applicants, with the exception of the family of H. E. R., against the French authorities before the courts of that Member State. They stated that those actions were based on the same facts and allegations and related to the same damage as that in the present case. By letter of 25 October 2003, the applicants made known their objection to that request for the proceedings to be stayed. As the applicants had objected to the request and it was not covered by any of the situations provided for in the third paragraph of Article 54 of the Statute of the Court of Justice or in Article 77 of the Rules of Procedure of the Court of First Instance, the Court did not grant the request. 27 Upon hearing the report of the Judge‑Rapporteur, the Court of First Instance (First Chamber) decided to open the oral procedure. By way of measures of organisation of procedure, the Court put some questions to the parties and asked them to produce certain documents. The parties complied with those requests within the time‑limit laid down. 28 The parties presented oral argument and their replies to the questions from the Court at the hearing in open court on 16 February 2006. 29 The applicants claim that the Court should: – declare the action admissible; – order the Council and the Commission jointly and severally to pay compensation totalling EUR 3 780 733.71, together with compensatory interest at a rate of 10% from the respective dates of death of the persons concerned and default interest from the date on which interlocutory judgment is delivered; – in any event, reserve EUR 1 in respect of compensation for each case of damage identified in order to preserve the applicants’ interest in bringing proceedings; – order the Council and the Commission to pay the costs. 30 The Council and the Commission contend that the Court should: – dismiss the action as inadmissible; – in the alternative, dismiss the claims as unfounded; – order the applicants to pay the costs. Admissibility 31 The Commission and the Council, the defendants, rely on three pleas of inadmissibility. The first plea alleges failure to make clear the basic legal and factual particulars on which the action is based. The second plea alleges failure to exhaust national remedies and a link with national proceedings. The third plea alleges expiry of the limitation period. I – The first plea of inadmissibility: failure to make clear the basic legal and factual particulars on which the action is based A – Arguments of the parties 32 The defendants point out that, under Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, every application must state the subject-matter of the dispute and contain a brief statement of the pleas in law on which it is based. An application seeking compensation for damage allegedly caused by a Community institution must state the evidence from which the conduct complained of can be identified, the causal link between that conduct and the damage claimed, and the nature and extent of that damage. In the present case, the application does not make it possible to identify unambiguously the unlawful conduct claimed, due in particular to confusion between the unlawful conduct the applicants have alleged against the Council and that alleged against the Commission, and also that which is attributed to the French authorities. Furthermore, according to the Commission, the application lacks particulars as to when the first clinical signs of the disease appeared, which means it is not possible to determine either the date from which the five-year limitation period runs or, on the basis of that date, the relevance for each of the persons who have died of the acts or omissions alleged. The Council also states that the applicants have not adduced any objective evidence establishing a link between the infection of their relatives and the conduct complained of. Lastly, there is no information at all in the application regarding the method of calculation used to quantify the alleged damage, or any supporting documents or objective data that would enable such damage to be assessed. 33 The applicants contend that the objections put forward by the defendants relate to the merits of the applicants’ claims and not to the admissibility of the action. They argue that the conduct complained of, the nature and extent of the damage claimed and the causal link identified have been described with sufficient precision. B – Findings of the Court 34 Under Article 21 of the Statute of the Court of Justice and Article 44(1)(c) of the Rules of Procedure of the Court of First Instance, every application must state the subject-matter of the dispute and contain a brief statement of the pleas in law on which it is based. In order to guarantee legal certainty and sound administration of justice, it is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself (orders in Case T‑85/92 De Hoe v Commission [1993] ECR II‑523, paragraph 20, and in Case T‑56/92 Koelman v Commission [1993] ECR II‑1267, paragraph 21). According to settled case-law, in order to satisfy those requirements an application seeking compensation for damage caused by a Community institution must state the evidence from which the conduct which the applicant attributes to the institution can be identified, the reasons for which the applicant considers that there is a causal link between the conduct and the damage which he claims to have suffered, and the nature and extent of that damage (see, to that effect, Case T‑387/94 Asia Motor France and Others v Commission [1996] ECR II‑961, paragraph 107, and the order in Case T‑53/96 Syndicat des producteurs de viande bovine and Others v Commission [1996] ECR II‑1579, paragraph 22). 35 In the present case, the application does meet the abovementioned requirements. First, the applicants set out at length and in detail the actions and failures to act of which they accuse the defendant institutions and the principles which those institutions allegedly infringed (see, in particular, paragraphs 96 to 204 of the application). Second, the applicants quantify very precisely the amounts of compensation claimed by each of them (see paragraphs 230 to 244 of the application). They also define the ‘damage due to infection’ which they claim, giving examples of compensation awarded by French courts on that basis (see paragraphs 226 to 228 of the application), and describe the non-material damage which they allege they suffered (see paragraph 229 of the application). Third, the applicants set out the reasons why they consider that there is a causal link between the conduct which they attribute to the Council and the Commission and the damage they consider they have suffered. Thus, they observe that the existence of a link between BSE and nvCJD has been established by medical, scientific and epidemiological arguments (see paragraphs 248 to 254 of the application) and attribute to the defendant institutions responsibility for the infection of their relatives, in particular due to their alleged failures to act in managing the BSE crisis (see paragraphs 256 to 268 of the application). 36 The conclusion must therefore be drawn that the conditions laid down in Article 21 of the Statute of the Court of Justice and in Article 44(1)(c) of the Rules of Procedure of the Court of First Instance are met in this case. 37 This plea of inadmissibility must therefore be dismissed. II – The second plea of inadmissibility: failure to exhaust national remedies and a link with national proceedings A – Arguments of the parties 38 The defendants submit that where national authorities are required to implement Community legislation individuals must use the remedies available before the national courts if those remedies are able to provide protection for their rights (Case 81/86 De Boer Buizen v Council and Commission [1987] ECR 3677, paragraph 9). They state that actions for damages relating to the same facts and the same damage and seeking the same compensation as in the present case have been brought by the applicants, with the exception of the family of H. E. R., before the Administrative Court, Paris, against the French authorities. The present action is therefore premature and hence inadmissible. There is also a risk of conflicting judgments and the possibility that the applicants may be compensated twice for one and the same instance of damage. In any event, the action is manifestly inadmissible as regards the damage arising both from the measures adopted by the national authorities in the exercise of their powers and from allegedly inadequate monitoring on the part of the Community institutions of the application of Community law by the Member States (order in Case T‑201/96 Smanor and Others v Commission [1997] ECR II‑1081, paragraphs 30 and 31). 39 The applicants point out that the Community judicature has exclusive jurisdiction to hear actions seeking compensation for damage attributable to institutions of the European Union. They add that the Court of First Instance has the power to obtain at any time evidence that would be of use to it in reaching its decision, such as documents relating to national proceedings. This ensures that the applicants cannot obtain compensation twice for the same damage. B – Findings of the Court 40 According to settled case-law, the action for damages under Article 235 EC and the second paragraph of Article 288 EC was established as an autonomous remedy with a particular function to fulfil within the system of remedies, whose exercise is subject to conditions imposed in view of its specific objective (Joined Cases T‑481/93 and T‑484/93 Exporteurs in Levende Varkens and Others v Commission [1995] ECR II‑2941, paragraph 69). It is correct, however, that an action for damages must be appraised with regard to the entire system for the judicial protection of the individual and its admissibility may thus, in some cases, be subject to the prior exhaustion of national remedies that are available for obtaining annulment of a decision of a national authority. In order for this to be the case, it is a necessary precondition that those national remedies give effective protection to the individuals concerned and that they are capable of leading to compensation for the damage alleged (Case 175/84 Krohn v Commission [1986] ECR 753, paragraph 27, and De Boer Buizen v Council and Commission, paragraph 9). 41 However, this is not the situation in the present case. First, compensation for the damage alleged by the applicants cannot be obtained, even in part, through the annulment of one or more specific measures of a national authority. Second, the action for damages brought by the applicants is based on allegedly unlawful conduct of the Council and the Commission. Given in particular that the Community judicature has exclusive jurisdiction under Article 288 EC to hear actions seeking compensation for damage attributable to the Community, remedies available under national law cannot automatically in this case guarantee effective protection of the applicants’ rights, that is to say in particular compensation for all the damage alleged by them (see, to that effect, Case C‑282/90 Vreugdenhil v Commission [1992] ECR I‑1937, paragraph 14; Case C‑55/90 Cato v Commission [1992] ECR I-2533, paragraph 17; Case T-167/94 Nölle v Council and Commission [1995] ECR II-2589, paragraphs 41 and 42; Exporteurs in Levende Varkens and Others v Commission, paragraph 72; and Case T-210/00 Biret et Cie v Council [2002] ECR II-47, paragraphs 37 and 38). 42 Moreover, it should be noted that the Court has held that, where the same damage is the subject of two actions for compensation, one against a Member State before a national court and the other against the Community before the Community judicature, it may prove necessary, before deciding on the amount of the damage for which the Community will be held liable, to wait until the national court has given judgment on any liability on the part of the Member State, in order to avoid the applicant’s being insufficiently or excessively compensated because of the different assessment of two different courts (see, to that effect, Joined Cases 5/66, 7/66 and 13/66 to 24/66 Kampffmeyer and Others v EEC Commission [1967] ECR 245, at 266, and Case 30/66 Becher v Commission [1967] ECR 285, at 300). In any event, that question does not concern the admissibility of the action brought before the Community judicature, but merely, where relevant, the final decision on the amount of the compensation it should grant. 43 Lastly, as regards the arguments by which the Council and the Commission contend that the alleged damage has arisen from actions by the national authorities in the exercise of their powers and from inadequate monitoring on the part of the Community institutions of the application of Community law by the Member States, suffice it to state that those arguments are not capable of resulting in the inadmissibility of the present action. They should be analysed, if appropriate, as part of the consideration either of the unlawful conduct alleged against the defendants or of the damage claimed by the applicants. 44 The second plea of inadmissibility must therefore also be dismissed. III – The third plea of inadmissibility: expiry of the limitation period A – Arguments of the parties 45 The defendants point out that, under Article 46 of the Statute of the Court of Justice, proceedings against the Community in matters arising from non-contractual liability are to be barred after a period of five years from the occurrence of the event giving rise thereto. In the present case, that period began to run from the date on which the first symptoms of the disease appeared, the point in time at which the harm suffered personally by the victims and the alleged indirect damage suffered by their relatives arose. 46 The defendants observe that H. E. R. died on 4 January 1996 and that the clinical signs of his disease had already appeared by August 1994. They point out that the probable link between nvCJD and BSE had been revealed by the publication of the SEAC statement of 20 March 1996 and had been widely publicised in the press. They conclude that the action brought by the family of H. E. R. is time‑barred by a considerable period. The defendants also express doubts with regard to whether the actions brought by the families of L. D., A. E. and F. R. are out of time, since the precise date on which the signs of the disease from which their relative died first appeared cannot be identified from the application. The burden of proving that those first symptoms did not appear more than five years before the application was lodged lies with the applicants. 47 The applicants contend that the limitation period for bringing an action for damages cannot begin to run from the date on which the first symptoms of the disease appeared. They maintain that the diagnostic criteria for nvCJD can be established with certainty only by findings made post mortem and that the first signs of the disease are an insufficient basis for a presumed diagnosis. 48 The applicants point out that the death of H. E. R. and the subsequent autopsy which confirmed the diagnosis of nvCJD took place before that disease had been officially described by scientific experts, and thus before the identity of the pathogen of BSE and nvCJD was known with a reasonable level of certainty. Indeed, until the adoption of the opinion of the Scientific Steering Committee (‘the SSC’) of 10 December 1999, H. E. R.’s family did not have the evidence needed in order to ascertain the event that had given rise to the damage sustained. That opinion signalled the existence of a scientific consensus on the identity of the pathogen linking BSE and nvCJD, whereas up to that time the link between the two diseases was merely a ‘plausible hypothesis’. Moreover, the judicial expert report which established the certainty of the diagnosis was not officially notified to H. E. R.’s family until 13 November 2003. As regards the other victims, their medical expert reports show that the diagnosis of nvCJD was not mentioned earlier than five years before the application was lodged. B – Findings of the Court 49 Under Article 46 of the Statute of the Court of Justice, proceedings against the Community in matters arising from non-contractual liability are to be barred after a period of five years from the occurrence of the event giving rise thereto. That period cannot begin, however, before all the requirements governing the obligation to make good the damage are satisfied and, in particular, in cases where liability stems from legislative measures, before the injurious effects of the measures have been produced (Joined Cases 256/80, 257/80, 265/80, 267/80 and 5/81 Birra Wührer and Others v Council and Commission [1982] ECR 85, paragraph 10, and Biret et Cie v Council, paragraph 41). Lastly, where the victim could have known only belatedly of the event giving rise to the damage, the limitation period cannot begin for that person before he could have become aware of it (see, to that effect, Case 145/83 Adams v Commission [1985] ECR 3539, paragraph 50). 50 In the present case, contrary to what the defendants contend, it is not appropriate to rely, as against the applicants, on the moment when the first clinical symptoms characteristic of the disease suffered by their relatives appeared as the beginning of the limitation period for their action. First, the injurious effects in question are linked both to the infection with nvCJD and to the death of the persons infected with that disease. Before the victims’ deaths, therefore, that damage cannot be regarded as having fully materialised. Secondly, there is no dispute that at the material time in this case a diagnosis of nvCJD was particularly difficult to establish and could often not be fully confirmed until after the patient’s death. The Court holds therefore that in the present case the limitation period is not to begin before the respective dates of the death of each of the victims or, if it is later, of the establishment of a definite diagnosis of nvCJD. 51 So far as the families of L. D., A. E. and F. R. are concerned, the deaths of their relatives infected with nvCJD did not occur earlier than five years before the application was lodged. L. D. died on 4 February 2000, A. E. on 25 April 2001 and F. R. on 10 February 2002. In addition, it is clear from the judicial expert reports drawn up in respect of each of those victims at the request of the Regional Court, Paris, and the Administrative Court, Paris, dated 1 October 2002, 13 April, 20 May and 6 June 2003 and 29 January 2004, that in none of the cases was even a preliminary diagnosis of nvCJD established earlier than five years before the application was lodged. 52 On the other hand, H. E. R. died on 4 January 1996, that is to say, over seven years before the application was lodged in this case. The applicants deny, however, that the action brought by H. E. R.’s family is time‑barred, arguing, first, that the judicial expert report which established a definite diagnosis was not officially notified to the family until 13 November 2003 and, second, that a scientific consensus on the identity of the pathogen linking BSE and nvCJD did not exist before the adoption of the SSC opinion of 10 December 1999. These arguments cannot, however, be upheld. 53 First, although the judicial expert report of 2 July 2003, drawn up by two experts at the request of the first investigating judge at the Regional Court, Paris, was not notified to H. E. R.’s parents until 13 November 2003, the fact remains that that report was drafted on the basis of H. E. R.’s medical file. It is clear from that file that on 23 November 1995 a cerebral biopsy indicated a preliminary diagnosis of spongiform encephalopathy in the patient. That diagnosis was supported by further tests in November 1995. The autopsy on H. E. R.’s brain confirmed that he had been infected with ‘Creutzfeldt-Jakob spongiform encephalopathy’. Lastly, it is also clear from the file, and was moreover acknowledged by the applicants at the hearing, that H. E. R.’s family was informed in 1996 of the confirmation of that diagnosis. 54 Secondly, it is generally accepted that it was the SEAC statement of March 1996 which established, on a scientific basis, a probable link between BSE and nvCJD. More particularly, as a result of being broadcast by the media, that statement marked the start of the general public’s awareness of the risks associated with BSE and the link between that disease and nvCJD. The information contained in the SEAC statement significantly altered the perception among consumers of the danger which that disease represented for human health (Case C‑180/96 United Kingdom v Commission [1998] ECR I‑2265, paragraphs 52 and 53, and Case T‑149/96 Coldiretti and Others v Council and Commission [1998] ECR II‑3841, paragraph 109). On the other hand, the SSC opinion of 10 December 1999 on the human exposure risk via food with respect to BSE does not appear to have the same significance in the context of scientific research in this field, as it is limited rather to taking stock of further research conducted in order to assess and clarify the risk presented by BSE to human health. In any event, the SSC opinion of 10 December 1999 certainly did not have media coverage and an impact on public opinion comparable to those of the SEAC statement of 1996. Hence, the applicants’ view that it was only following the adoption of the SSC opinion of 10 December 1999 that H. E. R.’s family could reasonably have been aware of the probable cause of H. E. R.’s disease should be rejected. 55 In the light of all the above considerations, it must be concluded that, as regards compensation for the damage arising from the infection and death of H. E. R., the present action was brought after the limitation period for bringing proceedings had expired. 56 Consequently, the right of action of É. R., O. O., J. R., A. R. and B. P. R. must be declared time-barred. This third plea of inadmissibility must be dismissed as to the remainder. Substance 57 The applicants’ main criticism of the Commission and the Council is that they infringed a higher rule of law protecting individuals, by failing to ensure a high level of health protection for consumers. In the alternative, they contend that in view of the unusual and special nature of the damage in question compensation for that damage should be provided by the Community institutions even if there is no fault on their part. I – Non-contractual liability of the Community for unlawful conduct of the defendant institutions A – Arguments of the parties 58 The applicants contend that the Council and the Commission persistently and deliberately favoured the interests of traders on the market in beef and veal to the detriment of the health of consumers when they assessed and managed the risks linked to BSE. There were wrongful omissions on the part of those institutions in carrying out their duties and obligations in the area of animal and human health and they adopted insufficient, incorrect, inadequate or belated standards and measures to deal with the risks resulting from BSE and nvCJD. The Council and the Commission should therefore be held liable for the infection of members of the applicants’ families with nvCJD, but that liability is not exclusive. 59 The defendants point out that, as regards the Community’s non-contractual liability, a right to reparation is conferred where three conditions are met: the rule of law infringed must be intended to protect individuals and the breach must be sufficiently serious; the existence of damage must be established; and, lastly, there must be a direct causal link between the breach which is the responsibility of the Community and the damage sustained by the injured parties (Joined Cases T‑94/00, T‑110/00 and T‑159/00 Rica Foods and Others v Commission [2002] ECR II‑4677, paragraphs 250 and 251, and Exporteurs in Levende Varkens and Others v Commission, paragraphs 81 and 91). They deny that those three conditions are all met in the present case and state that the burden of proof lies with the applicants. 1. The unlawful conduct alleged against the Council and the Commission 60 The applicants contend that it was first and foremost for the Council and the Commission to adopt appropriate decisions in order to avoid the risks linked to the spread of BSE. They note that, under the third subparagraph of Article 129(1) of the EC Treaty (now, after amendment, the first subparagraph of Article 152(1) EC) and according to settled case-law, health protection requirements must be taken into account by those institutions in the implementation both of the common agricultural policy (Case C‑146/91 KYDEP v Council and Commission [1994] ECR I‑4199, paragraph 61) and of the principle of free movement of goods (order in Case T‑76/96 R The National Farmers’ Union and Others v Commission [1996] ECR II‑815). 61 The applicants accept that, in matters concerning the common agricultural policy, the Community institutions enjoy a broad discretion regarding definition of the objectives to be pursued and choice of the appropriate means of action, and hence when determining the level of risk deemed unacceptable for society. The Community judicature must, however, review whether the exercise of such discretion by those institutions is vitiated by a manifest error or a misuse of powers (Case 98/78 Racke [1979] ECR 69, paragraph 5, and Joined Cases C‑267/88 to C‑285/88 Wuidart and Others [1990] ECR I‑435, paragraph 14). 62 The applicants observe that, under Article 130r(2) of the EC Treaty (now, after amendment, Article 174(2) EC), the precautionary principle is one of the principles on which Community policy on the environment is based. That principle also applies where the Community institutions take, in the framework of the common agricultural policy, measures to protect human health (United Kingdom v Commission, paragraph 100, and Case C‑157/96 National Farmers’ Union and Others [1998] ECR I‑2211, paragraph 64). Where there is scientific uncertainty as to the existence or extent of risks to human health, the Community institutions may take protective measures without having to wait until the reality and the seriousness of those risks become fully apparent (United Kingdom v Commission, paragraph 99; National Farmers’ Union and Others, paragraph 63; and Case T‑199/96 Bergaderm and Goupil v Commission [1998] ECR II‑2805, paragraph 66). 63 The defendants observe that public health protection measures mainly fall within the competence of the Member States, which are required to adopt all measures regarded as necessary, both on the basis of Article 30 EC, in areas where there has been no harmonisation at Community level, and on the basis of the various safeguard clauses laid down in Community legislation, in areas where there has been harmonisation. The defendants refer in particular in that regard to Directives 89/662 and 90/425. The Member States are also responsible for implementing Community measures and monitoring their application by individuals and undertakings. Only an act or omission which falls solely within the competence of the Community institutions may form the subject of an action for damages against those institutions. 64 The Commission contends furthermore that, even before the precautionary principle was established by case-law in the 1990s, that principle had guided its actions in the management of the ‘mad cow crisis’. It notes that the probable link between nvCJD and BSE was not announced until 1996 and that before that time scientists considered that the risk to humans was minimal. However, the Commission did not restrict itself to measures intended solely to protect animal health, but from 1989 onwards adopted measures in the area of public health. Although those measures may now appear inadequate, the Commission’s action should be judged in the light of the imperfect knowledge available at that time. 65 As regards the unlawful conduct specifically alleged against the Council and the Commission, the applicants contend, first, that the defendant institutions committed manifest errors of assessment in managing the risks linked to BSE. Second, they criticise the Council and the Commission for a misuse of powers. Third, they claim infringement of the principles of protection of legitimate expectations and of sound administration. a) The complaint alleging manifest errors of assessment in the management of the BSE crisis 66 The applicants contend that the defendants adopted the relevant measures with regard to the risks linked to BSE with significant delay when compared with the measures taken by the United Kingdom authorities, which prohibited the use of meat-and-bone meal in ruminant feed in July 1988. 67 The Commission denies this alleged delay in the adoption of appropriate measures. It points out that the legality of a measure must be assessed on the basis of the factual and legal situation which existed at the time when it was adopted (Joined Cases 15/76 and 16/76 France v Commission [1979] ECR 321, paragraph 7) and hence cannot depend on retrospective assessment of its efficacy. 68 First, the applicants criticise the delay in adopting the first Community measures to combat BSE. The first bans on the export of certain live bovine animals from the United Kingdom were not imposed until 28 July 1989, under Decision 89/469. The notification of cases of BSE did not become compulsory until 6 March 1990, under Decision 90/134. Lastly, it was not until 9 April 1990 that Decision 90/200 prohibited the export from the United Kingdom of certain bovine tissues and organs. 69 The Commission replies that it adopted the first measures against BSE only a few months after the publication by the United Kingdom Ministry of Agriculture, Fisheries and Food in February 1989 of the report of the Working Party on BSE (the Southwood Report). 70 Second, the applicants criticise the way in which the defendants managed objective risk factors such as the consumption of meal imported from the United Kingdom or the possibility of recycling the infective agent by the use of processed animal waste in the manufacture of animal feed. They point out that the measures introduced by the United Kingdom authorities in 1988 did not prevent United Kingdom producers from legally exporting such meal to other Member States. However, the Community did not prohibit the feeding of meat-and-bone meal derived from mammalian tissues to ruminants until July 1994, with the adoption of Decision 94/381. The delay in adopting these measures resulted in the development of an epidemic, illustrated by the first five cases of BSE declared in France in 1991. Lastly, the applicants contend that, even after the ban on feeding mammalian derived protein to ruminants, European livestock remained exposed to the risk of the spread of BSE due to cross-contamination in the animal feed manufacture and distribution chains. 71 The Commission points out that in 1989 and 1990 the veterinary committees had not recommended the adoption of Community legislation banning meat-and-bone meal. Faced with the refusal by Member States in 1989 to take measures that went beyond what the opinions of the scientific committees advocated, the Commission had been forced to relinquish a ban on such meal, but it requested Member States to introduce unilateral bans. 72 Third, the applicants criticise the defendant institutions for their delay in introducing an embargo on all bovine animals and bovine products originating in the United Kingdom. That embargo was not imposed until 27 March 1996, with the adoption of Decision 96/239. 73 The Commission replies that between 1989 and 1996 there was no scientific opinion advocating such an embargo. In the light of the discovery of a possible link between BSE and nvCJD, revealed by the SEAC statement of 20 March 1996, the Commission immediately decided to reassess the risk. Thus, on 22 March 1996 it assembled the Scientific Veterinary Committee (ScVC) and on 25 March 1996 it convened the Standing Veterinary Committee (SVC). Following the latter’s recommendation, on 27 March 1996 the Commission adopted Decision 96/239. 74 Fourth, the applicants complain of the delay in imposing the ban on the use of SRM. As a result of the opposition of several Member States, both in the SVC and in the Council, the entry into force of Decision 97/534, scheduled for 1 January 1998, was postponed on several occasions, and the ban on SRM did not take effect until 1 October 2000, following the adoption of Decision 2000/418. That ban constituted the main measure for the protection of human health because consumption of SRM was the direct source of infection with nvCJD. 75 The Commission maintains that, contrary to what the applicants assert, Decision 2000/418 was not the first Community measure concerning a ban on SRM. Decision 90/200 had already imposed a ban on exports from the United Kingdom of material such as brain, spinal cord, thymus, tonsils, spleen and intestines. The Commission contends that during the period from 1989 to 1996 it took all the measures advocated in the opinions of the scientific committees regarding withdrawal of SRM (previously called ‘specified bovine offal’ or ‘SBO’). 76 Fifth, the applicants contend that although the defendant institutions rapidly became certain that BSE had spread to other European countries besides the United Kingdom and were aware of the significance of an evaluation of the future epidemiological status of the Member States, it was not until it issued its opinion of 23 January 1998, amended on 20 February 1998, that the SSC recommended that an assessment should be made of the geographical risk represented by BSE. 77 The Commission challenges the view that such an evaluation of the future epidemiological status of the Member States was essential from 1990. In any event, Decision 90/134 imposed an obligation on all Member States to notify any outbreak of BSE, which made it possible to monitor the development of the epidemic in the different countries. b) The complaint alleging misuse of powers 78 The applicants state that on several occasions the Commission threatened Member States with judicial proceedings in order to dissuade them from adopting unilateral protection measures against risks linked to BSE, although Article 36 of the EC Treaty (now Article 30 EC) permits them to adopt such measures. They refer particularly to the Commission’s opposition to the adoption by France in 1990 of a temporary suspension of imports of live bovine animals and derived products from the United Kingdom, and to the introduction by France in 1992 of temporary measures prohibiting the offering for sale of food supplements and baby food containing tissues, apart from muscular tissues, of bovine and ovine origin. Those demands reflected the concern not to reveal the risk of occurrence of BSE in France and to conceal the inadequacy of the Community measures in this field, and constitute a misuse of powers. 79 The defendants point out that there is a misuse of powers where a Community institution adopts a measure with the exclusive or main purpose of achieving an end other than that stated or evading a procedure specifically prescribed by the Treaty for dealing with the circumstances of the case (Case C‑84/94 United Kingdom v Council [1996] ECR I‑5755, paragraph 69). As the functioning of the internal market, the stability of agricultural markets and the assurance of a fair income to farmers are objectives legitimately pursued by the Community within the framework of the powers accorded to it by the Treaty, the applicants’ complaints cannot disclose a misuse of powers. c) The complaint alleging infringement of the principles of protection of legitimate expectations and of sound administration 80 The applicants contend that the defendants have infringed the legitimate expectations of European consumers in that, in order to prevent the broadcasting of the effects of BSE from causing a collapse in the market in bovine meat, they favoured a policy of opaqueness and lack of transparency and failed to put in place a system of ‘risk education’. The applicants also complain that the Community scientific opinions lack independence and transparency. They observe in that regard that the report of the European Parliament’s committee of inquiry of 7 February 1997 strongly criticised the preponderance of United Kingdom representatives on the ScVC. Lastly, they criticise the Commission for not carrying out any BSE inspections until 1994. 81 The defendants recall that, in the absence of specific assurances given by the administration, no one may claim a breach of the principle of the protection of legitimate expectations (Case T‑521/93 Atlanta and Others v EC [1996] ECR II‑1707, paragraph 57). The failure to observe such assurances has not even been put forward in this case, however. As for the alleged absence of Community BSE inspections between 1990 and 1994, the Commission states that its task consists merely of monitoring the inspection activity of the Member States. 2. The existence of damage 82 The applicants rely, first, on the existence of ‘damage due to infection’, namely personal non-economic harm covering all the physiological, physical and psychological problems and suffering endured by each of the victims of the disease, which were exceptional in this case. This damage due to infection has been evaluated by the French courts, in cases of iatrogenic infection (that is to say, infection caused by medical treatment) with CJD following the injection of growth hormones, at EUR 340 000. The applicants complain, secondly, of non-material damage, stating that the suffering of their relatives infected with the disease, the uncertainty of the diagnosis and the possibility of being infected themselves have had an exceptional impact on them. They seek compensation, thirdly, for material damage, as a result both of the losses sustained and of the loss of earnings suffered as a result of their relatives’ disease. Lastly, they claim compensatory interest at a rate of 10% from the respective dates of death of the victims and default interest from the date on which interlocutory judgment is delivered. 83 In particular, the following claims for compensation are set out in respect of the infection and death of L. D.: an amount of EUR 457 347.05 should go to the victim’s heirs as compensation for damage due to infection; EUR 45 734.71 for the victim’s mother in respect of non-material damage resulting from that infection; EUR 30 489.80 for each of the victim’s brothers and for her sister in respect of their non-material damage. 84 In the case of A. E., the following claims for compensation are set out: a sum of EUR 457 347.05 should go to the victim’s heirs as compensation for damage due to infection; a sum of EUR 76 224.51 for each of his parents as compensation for the non-material damage resulting from that infection; a sum of EUR 76 224.51 also to her parents, as the statutory representatives of their minor daughter, in respect of the non-material damage suffered by her as the result of the infection of her older brother. 85 As regards F. R., the following claims for compensation are set out: an amount of EUR 457 347 should go to the victim’s heirs as compensation for damage due to infection; an amount of EUR 76 224.51 for the victim’s widow, in respect of non-material damage resulting from that infection; also to the victim’s widow, as statutory representative of her minor son, an amount of EUR 76 224.51 as compensation for non-material damage and the same amount for the material damage suffered by him; an amount of EUR 45 735 for each of the victim’s parents in respect of non-material damage resulting from the infection; an amount of EUR 30 489 for each of the victim’s three sisters as compensation for non-material damage. 86 Lastly, as for S. C. S., the following claims for compensation are set out: a sum of EUR 457 347 for the victim’s widower, as her heir and statutory representative of their minor children, by way of compensation for damage due to infection; a sum of EUR 76 224.51 in respect of the widower’s own non-material damage resulting from the infection of his dead wife; also, in his capacity as statutory representative of his three minor children, a sum of EUR 76 224.51 for each of them as compensation for the non-material damage suffered by them and the same sums in respect of their material damage. 87 The defendants contend that the application provides scarcely any explanation of how the compensation for the damage has been calculated. The defendants also observe that in order to assess the material damage suffered as the result of a disease it is necessary to take into account the costs in connection with care and assistance for the patients, the loss of income for the duration of the disease, the material damage deriving directly from the death and the material loss due to loss of earnings that is suffered by the persons who are financially dependent on the victim. However, the application contains no such information. Moreover, the defendants contend that the non-material damage sustained by the patients’ relatives is not damage that can be compensated (Joined Cases 169/83 and 136/84 Leussink and Others v Commission [1986] ECR 2801, paragraph 22) and dispute that a victim’s own non-material damage is transmissible to his heirs. Lastly, the defendant institutions dispute application of the 10% interest rate claimed by the applicants. 88 In addition, the Commission contends that in this case liability for the damage claimed lies mainly with the Member States and maintains that any sum of compensation that may be decided upon should be reduced in consequence. 3. The existence of a causal link 89 The applicants contend that today the link between BSE and nvCJD is established both on medical or scientific grounds and on epidemiological grounds. They also note that in the present case medical expert reports establish a definite diagnosis of nvCJD for each of the victims who died. 90 The applicants point out that BSE was described for the first time in the United Kingdom in November 1986 and state that the authorities in that country identified nvCJD on 20 March 1996. There have been 163 000 cases of BSE and over 150 cases of nvCJD in the United Kingdom. In France, BSE appeared in 1991 with the declaration of five cases in animals which had not been imported from the United Kingdom but whose infection was linked to the consumption of meat meal from the United Kingdom. France has experienced the highest incidence of BSE among continental countries, with a total of 679 cases as at 29 August 2002, and had recorded six definite or likely cases of nvCJD up to 2002. 91 The applicants state that, when determining the period during which consumers were exposed to the risk of BSE, it is necessary to take into account this trend in the incidence of the bovine disease in different European countries, the trend in the movement of bovine animals and bovine products from the United Kingdom, and the development of the rules for protecting the health of consumers over the period concerned. The first preventive measures in respect of BSE were adopted in the United Kingdom in 1989. Those measures gave rise to a sharp increase in imports of meat-and-bone meal from the United Kingdom to France. Although the incidence of BSE subsequently fell in the United Kingdom, the disease made its appearance in continental Europe, in particular in France, from 1991 onwards. In 1996 a Community embargo on bovine animals and bovine products originating in the United Kingdom was adopted and, in France, specified risk offal was withdrawn from the food chain, although its withdrawal did not take effect at Community level until 2000. Meanwhile, France had imported 48 000 tonnes of offal from the United Kingdom from 1988 to 1996, as compared with 3 180 tonnes from 1978 to 1987. The applicants contend, on the basis of those statements, that the main exposure of French consumers to the risk of BSE took place in the period from July 1988 to 1996, since the adoption of protective measures in the United Kingdom and the fall in the risk of exposure in that country had been accompanied by an increase in the risk of exposure in the other countries of the Community, due to the inertia of the national and Community authorities. 92 The applicants state more specifically that several scientific opinions concluded that it was appropriate and expedient to withdraw SRM from the food chain in order to protect human health. The applicants also challenge the argument that the damage results from the activity of operators who engaged in unlawful trading in bovine products, since it is clear from the scientific opinions and medical expert reports that the victims in question became infected by the ingestion of contaminated tissues before they were banned in France in April 1996, and hence before the general embargo on the marketing of bovine animals and bovine products originating in the United Kingdom. 93 Lastly, the applicants state that they do not hold the Commission and the Council exclusively liable for the infection of their relatives. They contend that the French authorities did not adopt the measures needed in order to prevent the exposure of French consumers to the risk of BSE. However, the fact that a Member State has acted wrongfully does not mean that the Community has not contributed to the occurrence of the damage. In such a case, the victim can put the Member State’s liability at issue before the national courts and that of the Community before the Community judicature (Kampffmeyer and Others v EEC Commission). 94 The defendants contend that the applicants have not substantiated the existence of a direct causal link between the conduct alleged against them and the damage claimed. 95 The defendants contend that it cannot be established conclusively from the medical reports provided by the applicants that the victims in the present case were infected with the BSE pathogen via food. Nor have the applicants provided evidence, or offered to provide evidence, on the precise nature of the products which were the vector for the pathogen, or on the eating habits of the deceased persons. In particular, they have not stated whether the infection was caused by French products or by products imported from the United Kingdom. In view of the extremely small number of cases of BSE recorded outside the United Kingdom, in particular in France (between 1988 and 1996, 25 cases were confirmed in France compared with 167 875 cases detected in the United Kingdom), it is statistically very unlikely that French victims contracted the infection following consumption of French meat coming from animals infected with BSE. It is more logical to assume that the victims consumed, in France or elsewhere, meat originating in the United Kingdom from animals infected during the 1980s. 96 The defendants consider that no direct causal link can be accepted in the present case due to the scientific uncertainty still surrounding the research into BSE, nvCJD and the link between those two diseases. According to the SSC opinion of 10 December 1999, those uncertainties concern in particular the maximum period of incubation – or latency – of nvCJD, which may be from one year to over 25 years, the minimum infective dose, the precise nature of the infective agent and the distribution of the infectivity among the various tissues of an infected animal or human being. 97 The defendants maintain that, due in particular to the length of the incubation period of nvCJD, it is not possible to identify the date on which the deceased persons could have been infected (see, in that connection, the report of the BSE Subgroup of the ScVC of 7 November 1995). The impossibility of determining the exact date of infection means it is not possible to investigate whether the defendant institutions were in a position to take appropriate protection measures at that time. 98 The Commission observes moreover that, as is clear from Special Report No 14/2001 of the Court of Auditors, some Member States displayed reluctance to transpose the Community measures into their national law, thereby delaying the implementation of effective protection for public and animal health, and did not fully monitor the application of Community rules. B – Findings of the Court 99 It is settled case-law that non-contractual liability of the Community for the unlawful acts of its institutions and servants, for the purposes of the second paragraph of Article 288 EC, depends on fulfilment of a set of conditions, namely: the unlawfulness of the conduct alleged against the institutions, the fact of damage and the existence of a causal link between that conduct and the damaged complained of (Case 26/81 Oleifici Mediterranei v EEC [1982] ECR 3057, paragraph 16; Case T‑175/94 International Procurement Services v Commission [1996] ECR II‑729, paragraph 44; Case T‑336/94 Efisol v Commission [1996] ECR II‑1343, paragraph 30; and Case T‑267/94 Oleifici Italiani v Commission [1997] ECR II‑1239, paragraph 20). 100 As regards the first of those conditions, the case-law requires there to be a sufficiently serious breach of a rule of law intended to confer rights on individuals (Case C‑352/98 P Bergaderm and Goupil v Commission [2000] ECR I‑5291, paragraph 42). So far as concerns the requirement that the breach must be sufficiently serious, the decisive test for determining whether that requirement is met is whether the Community institution concerned has manifestly and gravely disregarded the limits on its discretion. Where that institution has only a considerably reduced or even no discretion, the mere infringement of Community law may be sufficient to establish the existence of a sufficiently serious breach (Case C‑312/00 P Commission v Camar and Tico [2002] ECR I‑11355, paragraph 54, and Joined Cases T‑198/95, T‑171/96, T‑230/97, T‑174/98 and T‑225/99 Comafrica and Dole Fresh Fruit Europe v Commission [2001] ECR II‑1975, paragraph 134). 101 Where one of those conditions is not satisfied the action must be dismissed in its entirety and it is unnecessary to examine the other conditions (KYDEP v Council and Commission, paragraphs 19 and 81, and Case T‑170/00 Förde-Reederei v Council and Commission [2002] ECR II‑515, paragraph 37). 102 In this case, it is necessary to examine, first, whether there is a causal link between the allegedly unlawful conduct of the defendant institutions and the damage pleaded by the applicants. 103 It is settled case-law that there is a causal link for the purposes of the second paragraph of Article 288 EC where there is a definite and direct causal nexus between the fault committed by the institution concerned and the injury pleaded, the burden of proof of which rests on the applicants (Case 253/84 GAEC de la Ségaude v Council and Commission [1987] ECR 123, paragraph 20; Joined Cases C‑363/88 and C‑364/88 Finsider and Others v Commission [1992] ECR I‑359, paragraph 25; and Coldiretti and Others v Council and Commission, paragraph 101). 104 In this case, the unlawful conduct alleged by the applicants against the Council and the Commission consists essentially of wrongful omissions in carrying out their obligations in the area of animal and human health, and of the adoption of insufficient, incorrect, inadequate or belated standards and measures to deal with the risks resulting from BSE and nvCJD. The applicants assert that the damage sustained originates directly from the infection of their family members with nvCJD and the deaths of those family members from that disease. They contend that the Council and the Commission must be considered liable, although not exclusively, for that infection. 105 It is therefore necessary to consider whether the applicants have adduced evidence or indicia proving, first, that their relatives were infected with nvCJD and that the infection was the result of consuming meat from bovine animals infected with BSE and, second, that the actions and omissions alleged against the defendants can be regarded as being at the origin of their relatives’ infection. 106 As regards the first question, namely the cause of death of the members of the applicants’ families, it should be stated from the outset that it is clear from the two sets of medical expert reports produced by the applicants – first, the reports dated 1 October 2002, and 13 April, 20 May and 6 June 2003 prepared at the request of the Regional Court, Paris, and, second, the reports dated 29 January 2004 prepared at the request of the Administrative Court, Paris – that in the case of each of the victims the diagnosis of nvCJD was established beyond doubt, with the express exclusion of any alternative diagnosis. Those reports also conclude that the most likely route of infection for those cases of nvCJD was orally, by infected food. Thus, the possibility of iatrogenic CJD (that is to say, CJD caused by medical treatment) has been dismissed. Those reports confirm more specifically that they were infections transmitted to humans from BSE. 107 Also, it appears to be generally accepted now in scientific circles that nvCJD results from infection by the BSE agent. The defendants themselves have accepted that it has been scientifically proved that BSE and nvCJD have certain physical, chemical and biological characteristics in common. In addition, the SSC opinion of 10 December 1999 on the human exposure risk via food with respect to BSE (see paragraph 48 above) states that scientific evidence indicates that BSE and nvCJD are most likely caused by the same agent and infers from this that human victims probably became infected as a result of consuming BSE‑contaminated material orally. Lastly, it is stated in the preamble to Decision 2000/418 that ‘[e]vidence is accumulating that the agent causing BSE is identical to that causing [nvCJD]’. 108 In the light of all the above considerations, it has been satisfactorily established that the applicants’ relatives died of nvCJD and that this disease was caused by the consumption of meat from bovine animals infected with BSE. 109 As regards the second question, namely whether the actions and omissions alleged against the defendants may be regarded as being at the origin of the infection of the applicants’ family members who have died, the applicants maintain in essence that the Council and the Commission did not adopt, at the right time, the appropriate measures necessary in order to deal with the risks that the BSE crisis posed for public health. Those institutions are therefore responsible for not preventing the spread of BSE – which was passed on from livestock in the United Kingdom, where it first appeared, to livestock in other Member States – and not preventing it from being transmitted to humans in the form of nvCJD. 110 In order to examine this question, it is necessary to consider first of all the dates on which the victims became infected and the incubation period of the disease and then to investigate the possible existence of a causal link between the damage established and the various instances of purportedly unlawful conduct specifically alleged against the Council and the Commission. 111 It is important to note, in any event, that the possibility of BSE being transmitted to humans was not scientifically established until March 1996 when the SEAC issued its statement referring to a probable link between BSE and nvCJD. As the defendants point out, their action must be judged in the light of the state of scientific knowledge and the degree of care and caution that could be required at the relevant time. 1. The dates on which the victims became infected and the incubation period of the disease 112 It is clear from the documents before the Court that the dates on which the members of the applicants’ families became infected cannot be established accurately. The applicants contend in that regard that the main exposure of French consumers to the risk of BSE was during the period from July 1988 – when the United Kingdom authorities introduced the first protective measures against BSE – until March or April 1996 – when the Community imposed an embargo on bovine products and meat-and-bone meal originating in the United Kingdom and France prohibited the consumption of specified risk offal (see paragraph 91 above). In particular, the applicants have stated that their relatives became infected no later than 1996 (see paragraph 92 above). It should also be noted that the reports of the experts commissioned by the Regional Court, Paris, and by the Administrative Court, Paris, after finding that the dates on which the members of the applicants’ families who died had became infected could not be established accurately, placed the likely dates of infection between 1980 and 1996. 113 In that regard, it is to be observed that nvCJD has a long incubation period. The SSC opinion of 10 December 1999 on the human exposure risk via food with respect to BSE (see paragraph 48 above), whilst stating that this period is unknown, also states that it may be from a few years to more than 25 years. The applicants themselves have observed that transmissible spongiform encephalopathies have a long latency period in an infected individual, which may be as long as 30 years in humans (see paragraph 103 of the application). Lastly, the expert reports prepared at the request of the Regional Court, Paris, and of the Administrative Court, Paris, state that ‘[c]linical data and modelling relating to the length of incubation suggest a period of 15 to 20 years between exposure to the BSE agent and the appearance of the new variant in humans’; they also state that, ‘whatever the form of [CJD] and whatever its origin, it is a disease which has a very long incubation period (a number of years)’, that ‘this incubation period varies in length according to the particular case’ and that ‘the variant linked to [BSE] has not escaped this adaptive characteristic of the disease’. Lastly, it should be noted that BSE, which is at the origin of infection with nvCJD, also has an incubation period in bovine animals which may extend to several years. According to the SSC opinion of 10 December 1999, the incubation period of BSE is five years on average, and in the majority of cases is between four and six years. 114 On the basis of the above findings, it is to be concluded that in the present case the members of the applicants’ families infected with nvCJD could have become infected by the agent of that disease not only between 1988 and 1996, as the applicants contend, but even before 1988. It should be noted, first, that it is generally accepted that the possibility of BSE being transmitted to humans was not scientifically recognised until 1996. Second, as the SSC opinion of 10 December 1999 (see paragraph 48 above) states, BSE is a new disease which first appeared in the United Kingdom probably between 1980 and 1985 but was not identified and described until November 1986. The infection of the victims at issue may therefore well have occurred at a time when the risks associated with BSE, in particular those to human health, were largely unknown in scientific circles. 115 More specifically, as the infection may have occurred before 1988 it cannot be considered established that the purportedly unlawful conduct which the applicants allege against the Council and the Commission, all of which took place after that date, is necessarily and directly at the origin of the damage claimed. 2. The existence of a causal link between the damage pleaded and the conduct alleged against the Council and the Commission 116 The applicants’ two fundamental criticisms regarding the management of BSE and nvCJD by the Council and the Commission concern, first, their alleged delay in banning the feeding of meat-and-bone meal to livestock, which, according to the applicants, led to the spread of BSE outside the United Kingdom, and, second, their alleged delay in withdrawing SRM from the food chain, which was at the origin of the infection of the human victims with nvCJD. Moreover, the applicants identify other conduct of the defendants which constitutes a manifest error of assessment and also allege that the defendants misused their powers and infringed the principles of the protection of legitimate expectations and of sound administration. a) The alleged delay in banning meat-and-bone meal 117 The applicants contend that BSE spread in continental Europe, especially in France, particularly as a result of the use in livestock feed of contaminated meat-and-bone meal imported from the United Kingdom. They observe that the authorities in that country prohibited the feeding of ruminants with meal derived from ruminants in 1988, but they did not prohibit the export of such meal to other Member States. That gave rise to a significant increase in imports of contaminated meal from the United Kingdom to France, the consumption of which by French cattle led to the appearance of BSE in that country. The applicants state that the defendants did not prohibit the feeding of meat-and-bone meal derived from mammalian tissues to ruminants until June 1994, with the adoption of Decision 94/381. The partial ban on the use of meat-and-bone meal imposed by the decision did not, moreover, prevent the exposure of bovine animals to the infective agent as a result of cross-contamination. At the hearing, the applicants explained that, as human exposure to nvCJD was linked to the spread of BSE, that allegedly unlawful conduct of the defendants in their management of the bovine disease had repercussions with regard to risks to human health. 118 It should be stated at the outset that, even though the precise origin of BSE does not appear to be fully known, scientific work carried out on that disease shows that – apart from the small number of cases (fewer than 10%) caused by maternal transmission – BSE most likely results from the ingestion of meat-and-bone meal containing the infective agent. As stated in Decision 94/381, the origin of BSE in cattle is considered to be ruminant protein which contained the scrapie agent, and, later on, the BSE agent, and which had not been sufficiently processed to inactivate the infective agents. It follows that, in order to combat the spread of the disease, it was necessary, in particular, to prevent tissues liable to contain the BSE agent from being introduced into the animal feed chain. 119 Although in July 1988 the United Kingdom authorities prohibited breeders established in their territory from feeding ruminants with meat-and-bone meal containing proteins derived from ruminants, the defendants initially did not adopt similar measures at Community level. As the applicants point out, the defendants did not prohibit the feeding of mammalian derived protein to ruminants throughout the Community until June 1994, with the adoption of Decision 94/381. Furthermore, the export of meat-and-bone meal from the United Kingdom to other Member States was not expressly prohibited until 1996, by Decision 96/239. 120 It is true that at that time the characteristics of the disease, and more specifically the causes of its transmission, were not fully known. Also, before 1994 the incidence of BSE in countries other than the United Kingdom – and to a much lesser extent Ireland – was considerably limited. Between 1988 and 1994, BSE had been detected in continental Europe only in Germany (4 cases), in Denmark (1 case), in France (10 cases), in Italy (2 cases) and in Portugal (18 cases). 121 It should be noted, in any event, that, as is clear from the answer given by the Commission in September 1996 to questions from the Parliament’s committee of inquiry, by 1991 all the Member States had already adopted national measures prohibiting the import of meat-and-bone meal from the United Kingdom, following the Commission’s recommendations in that regard. 122 Also, in 1989 and 1990, seven Member States adopted measures prohibiting the feeding of protein derived from mammalian tissues to ruminants. In particular, the French Republic prohibited the feeding of mammalian derived protein to bovine animals in July 1990. Under Article 1 of the Order of 24 July 1990 prohibiting the use of certain proteins of animal origin in the feeding of, and manufacture of feed for, animals of the bovine species (JORF of 11 August 1990, p. 9837), as amended by Article 1 of the Order of 26 September 1990 (JORF of 7 October 1990, p. 12162), ‘[t]he use of bone meal and proteins of animal origin, except for protein from milk products, poultry, egg products, fish or marine animals where they have been collected, processed and stored separately, is prohibited for the feeding of animals of the bovine species or the manufacture of feed for such animals’. 123 Moreover, from 1994 onwards the defendants progressively put in place a strategy designed specifically to prevent, throughout the Community, tissues liable to contain the BSE agent from being introduced into the animal feed chain. It is appropriate to highlight from among those measures Decision 94/381, which prohibited the feeding of mammalian derived protein to ruminants throughout the Community, with, however, the possibility of authorising on a case-by-case basis the application of systems enabling protein from ruminants to be distinguished from that of non-ruminants. 124 The applicants contend, however, that those provisions were inadequate, in particular because Decision 94/381 prohibited the feeding of mammalian derived protein only to ruminants, and therefore not to other livestock – pigs and poultry in particular. In their view, that partial ban later proved to be a source of cross-contamination and, hence, contributed to the spread of BSE. 125 It should be noted in that regard that the total ban on feeding animal protein to all livestock did not apply throughout the Community until Decision 2000/766, which entered into force on 1 January 2001. It is to be observed, in any event, that the adoption of that decision was needed due to systematic failures in the implementation of Community rules on meat-and-bone meal in several Member States (see recitals 4 and 5 in the preamble to Decision 2000/766). 126 As is clear from Special Report No 14/2001 of the Court of Auditors (paragraph 31), a certain level of contamination was tolerated by most Member States, including the French Republic, despite the fact that Community legislation did not allow any such tolerance. In addition, the inspections carried out by the Commission’s Food and Veterinary Office (FVO) in 1998 to 2000 found weaknesses in the control of trade in such meal in the majority of Member States. There is also evidence from the FVO inspections that the agro-feed industry did not do enough to avoid contamination of cattle feed by meat-and-bone meal, and that feed containing meat-and-bone meal was not always correctly labelled, including in France. These failures contributed to farmers inadvertently using potentially infective feed for their cattle (see Special Report No 14/2001 of the Court of Auditors, paragraph 33). 127 Consequently, the conclusion must be drawn that it has not been demonstrated that the defendants’ management of the issues linked to the feeding of meat-and-bone meal to livestock, including ruminants, was a determining cause of the spread of BSE outside the United Kingdom, in particular in France, and hence of the infection of members of the applicants’ families with nvCJD. In the light, in particular, both of the measures adopted by several Member States, including France, prohibiting the import of meat-and-bone meal from the United Kingdom and the feeding of protein derived from mammalian tissues to ruminants, and of the shortcomings of the national authorities and private operators in the application of Community rules, the Court does not consider that it has been established that if the Commission and the Council had adopted – or had adopted earlier – the measures which the applicants criticise them for not having taken, the damage alleged would not have occurred. A fortiori, it has not been established that the conduct identified by the applicants in that regard may constitute the definite and direct cause of the infection of members of the applicants’ families with nvCJD. b) The alleged delay in banning the use of SRM 128 The applicants contend in essence that banning the use of SRM is the most significant of the measures for protection against the risk which nvCJD poses to human health, since such material is the main source of infection for humans. They observe that although several scientific opinions had, from 1989, advocated the need for that measure the defendants adopted it only very belatedly. Indeed, the ban on the use of any type of SRM was not decided upon until 1997, with the adoption of Decision 97/534. The applicants add that the entry into force of that decision, which was to have taken place on 1 January 1998, was successively delayed by the Commission and the Council by almost three years. The ban did not therefore enter into force throughout the Community until 1 October 2000, following the adoption of Decision 2000/418. 129 It should be noted at the outset that, contrary to what the applicants appear to claim, the opinion of the ScVC of 27 November 1989 concluded that at the time there was no evidence that animal spongiform encephalopathies were transmissible to man, although it did state that the possibility of a slight risk to human health from tissues with a significant level of infectivity could not be excluded. In those circumstances, the ScVC merely recommended excluding from the human food chain specified bovine offal (namely brain, spinal cord, thymus, tonsils, spleen and intestines) from animals coming from countries where BSE was widespread. 130 Until 1989 cases of BSE had been identified only in the United Kingdom. Subsequently, between 1989 and 1996, the vast majority of cases of BSE were also detected in that country. In fact, the United Kingdom recorded 165 402 cases of BSE over that period. Ireland recorded only 189 cases. Finally, only 25 cases of BSE were identified in France in that period, and the other Member States of continental Europe also had very few cases (64 cases in Portugal, 4 cases in Germany, 2 cases in Italy and 1 case in Denmark). 131 From 1989 the defendants adopted an initial series of measures to prevent the spread of BSE from the United Kingdom, introducing in particular certain restrictions on intra-Community trade in bovine animals from that country (see in particular Decisions 89/469, 90/59 and 90/261). Also, in April 1990 the Commission adopted Decision 90/200, which prohibited the sending from the United Kingdom – the only country where BSE was widespread at that time – of brain, spinal cord, thymus, tonsils, spleen and intestines derived from bovine animals aged more than six months at slaughter. 132 The applicants criticise the defendants, however, for not adopting at that time a general ban on the use of SRM throughout the Community and consider that this inaction was at the origin of the infection of their relatives. 133 In an area such as that of animal and human health, the existence of a causal link between conduct and damage must be established from an analysis of the conduct that could be required of the institutions on the basis of the state of scientific knowledge at the time. Until March 1996 the possibility of BSE being transmitted to humans had not been scientifically established (see paragraphs 8, 9 and 111 above). Also, before October 1996 the Community scientific and veterinary committees did not suggest the introduction of a general ban on the use of SRM throughout the Community, as measures in respect of such material were regarded as necessary only in the United Kingdom. Therefore, before 1996 the defendants cannot be criticised for not imposing a total ban on the use of SRM throughout the Community. 134 It should also be noted that in order for a causal link to exist the conduct complained of must be the definite and direct cause of the alleged damage and that in cases such as the present one, where the conduct which allegedly causes the damage pleaded consists in refraining from taking action, it is particularly necessary to be certain that that damage was actually caused by the inaction complained of and could not have been caused by conduct separate from that alleged against the defendant institutions. 135 In the present case, the Court considers that there is no such certainty. 136 It is not possible to conclude with adequate certainty that even if the defendant institutions had adopted a total ban on the use of SRM earlier the members of the applicants’ families would still not have become infected. In particular, in the present case the regulatory measures to be adopted by the defendant institutions depended particularly for their effectiveness on action by the Member States, which have not always been rigorous enough in ensuring that the veterinary rules have been strictly applied (see paragraph 144 below). 137 It should also be noted, as stated in the SSC opinion of 10 December 1999 (see paragraph 48 above), that although SRM appears to be by far the main source of nvCJD infection, the ‘ideal’ level of protection of consumers from the disease would require a total absence of animals infected with BSE from the human food chain, the removal of SRM constituting only ‘the second level of protection’. The SSC points out that neither the minimum dose of material contaminated with BSE inducing human infection nor the distribution of the infection within the different tissues of an animal is fully known, and concludes that any human exposure to the infective agent should therefore be avoided. 138 In the light of the above, the Court finds that even though a total ban at an early stage on the consumption and use of SRM throughout the Community, applied rigorously and effectively in all Member States, could, had it been decided upon sooner, have reduced the risk of infection of European consumers with nvCJD, it is not, however, possible to conclude with adequate certainty that in the present case the adoption of such a ban by the defendant institutions would have prevented the members of the applicants’ families from becoming infected. In any event, in view in particular of the likely dates on which they became infected and the respective incubation periods of BSE and nvCJD (see paragraphs 112 to 114 above), in order to have been capable of being effective in the present case such a measure would have had to have been adopted not only well before 1996 – the year in which the transmissibility of BSE to humans became scientifically recognised – but even before 1990 – the year in which the first case of BSE was detected in continental Europe – not to say before 1986 – the year in which the disease BSE was identified and described for the first time in the United Kingdom. As was concluded in paragraph 133 above, the defendants cannot be criticised for not imposing a total ban on the use of SRM throughout the Community before 1996. 139 Lastly, as regards the delays in adopting measures concerning the use of SRM alleged against the defendant institutions between 1997 and 2000, those criticisms are not relevant for the purposes of the present case. According to the applicants themselves, their relatives became infected with nvCJD no later than 1996 (see paragraph 92 above). Also, the reports of the experts commissioned by the Regional Court, Paris, and by the Administrative Court, Paris, found that the members of the applicants’ families who had died most likely became infected before 1996 (see paragraph 112 above). Consequently, the defendants’ alleged unlawful conduct which took place after 1996 cannot be considered to have caused the damage pleaded in the present case. 140 In the light of the above considerations, the Court holds that the conduct which the applicants allege against the defendant institutions concerning the ban on SRM cannot be regarded as a definite and direct cause of the damage pleaded in this case. c) Other conduct alleged against the Council and the Commission 141 Besides the alleged unlawful conduct concerning the management of meal and SRM, considered above, the applicants make several other criticisms of the defendants’ action to combat BSE and nvCJD. In particular, they consider that the defendants committed manifest errors of assessment in the management of risks associated with those diseases. Also, the applicants allege that the defendants misused their powers in that, in order to protect the interests of the beef and veal sector and the market in beef and veal, those institutions tried to dissuade Member States from adopting unilateral protective measures in the light of the risks presented by BSE. Lastly, the applicants allege infringement of the principles of the protection of legitimate expectations and of sound administration, as a result in particular of disorganisation in the Commission departments, failures and inadequacies of the Community veterinary checks relating to BSE, and defects in the monitoring of veterinary checks by the Member States. 142 It must be found that the applicants have by no means established a causal nexus existing specifically between this alleged unlawful conduct and the damage pleaded in this case, which resulted, as stated, from the infection with nvCJD and subsequent deaths of members of their families. 143 It should also be noted that responsibility for the actual monitoring of the application of veterinary legislation lies principally with the Member States. With regard, in particular, to the veterinary checks applicable in intra-Community trade, it is clear from Directives 89/662 and 90/425 that such checks are the responsibility first and foremost of the authorities of the Member State of dispatch and, to a lesser extent, of those of the State of destination. Specifically, in the event of the outbreak in their territory of a zoonosis or a disease likely to constitute a serious hazard to animals or human health, Member States must immediately implement the control or precautionary measures laid down by Community legislation and adopt any other appropriate measure. 144 It should also be noted that, as stated in Special Report No 14/2001 of the Court of Auditors, FVO inspections since 1996 reveal that most Member States have not been rigorous enough in ensuring that BSE measures have been adequately implemented in their territory. According to the Court of Auditors, this poor implementation by Member States of the Community legislation would have contributed to preventing BSE from being eradicated, and to the spread of the disease. Account should also be taken of the responsibility of some private economic operators for the spread of the disease. Thus, the report of the Court of Auditors found that the agro-feed industry had not been rigorous enough in implementing the Community BSE legislation. 145 In the light of the above, the Court holds that the applicants have not shown that these allegedly unlawful actions can be considered to be a definite and direct cause of the infection of their relatives with nvCJD. 3. Conclusion 146 In the light of the foregoing, the Court does not consider that it has been established that the allegedly unlawful actions and omissions of the Council and the Commission can be considered to be a definite and direct cause of the infection – which is at the origin of the damage pleaded in this case – of the members of the applicants’ families who have died in France of nvCJD. It has thus not been shown in the circumstances of this case that if those institutions had adopted – or had adopted earlier – the measures which the applicants criticise them for not adopting, the damage in question would not have occurred. 147 Consequently, it must be concluded that no causal link has been established between the damage pleaded and the allegedly unlawful conduct of the Community institutions. 148 Hence the applicants’ claims in respect of non-contractual Community liability for unlawful conduct of the defendant institutions must be rejected as unfounded and there is no need to rule on whether the other conditions for such liability are met in this case, that is to say, whether the conduct alleged against the defendant institutions is unlawful and whether there is actual damage. II – Non-contractual liability of the Community in the absence of unlawful conduct on the part of the defendant institutions A – Arguments of the parties 149 The applicants point out that French law recognises, in addition to a legal regime of fault-based liability, a fundamental right of victims to compensation for damage they have suffered by the charging of the cost to the public authorities. This regime is founded on the constitutional values of equality and solidarity. In that context, the French legislature established, in 1991, a special fund to provide compensation for persons infected with the human immunodeficiency virus following injections of blood products and, in 1993, an independent committee to provide compensation for victims of an iatrogenic form of CJD linked to the injection of growth hormones. 150 The applicants observe that Community case-law has not rejected the principle of the Community having strict liability (Case T‑113/96 Dubois et Fils v Council and Commission [1998] ECR II‑125). They maintain, on the basis of the constitutional traditions common to the Member States and of fundamental rights, which the Community institutions are bound to observe, that where the principle of equality is breached in an usual and special way it is legitimate to place the cost of compensation for the damage on the Community. The applicants accept that it would be desirable for the provision of compensation on the basis of the principle of solidarity to be decided by the ‘political’ institutions, but contend that it is also possible to recognise the Community judicature as having that power. They observe that the European Parliament, in a resolution of 19 November 1997, requested the Commission and the Member States concerned to grant the financial resources needed in order to demonstrate their solidarity with the families of victims of nvCJD. 151 The applicants state that as a result of the infection of their relatives with the BSE pathogen and of their relatives’ deaths from nvCJD, they suffered damage of exceptional intensity having an exceptional impact on them. Moreover, due to the failure to identify the infective agent and the difficulty in establishing the precise date and the source of the infection, they cannot base their actions for damages on national or Community rules concerning manufacturers’ and distributors’ liability. It would therefore be fair if they could place the cost of their compensation on the Community institutions. 152 The defendants point out that the Community can incur non-contractual liability in the absence of unlawful conduct only where three strict conditions are all met, namely actual damage must be suffered, a causal link must exist and the damage in question must be unusual and special (Case C‑237/98 P Dorsch Consult v Council and Commission [2000] ECR I‑4549, paragraphs 17 to 19). In the present case, the condition concerning the causal link is not met. Furthermore, the non-material damage suffered by family members must be excluded and the sums sought in respect of material damage are unsubstantiated and disproportionate. The Commission also contends that the applicants have not established that the damage was unusual and special, stating that, although it is true that death is particularly serious damage, the fact remains that the applicants have not adduced evidence that the victims were exposed to a particular risk that differed from that to which other consumers of bovine products would have been exposed. B – Findings of the Court 153 The second paragraph of Article 288 EC bases the obligation which it imposes on the Community to make good any damage caused by its institutions on the ‘general principles common to the laws of the Member States’ and therefore does not restrict the ambit of those principles solely to the rules governing non-contractual liability of the Community for unlawful conduct of its institutions. National laws on non-contractual liability allow individuals, albeit to varying degrees, in specific fields and in accordance with differing rules, to obtain compensation in legal proceedings for certain kinds of damage, even in the absence of unlawful action by the perpetrator of the damage (Case T‑69/00 FIAMM and FIAMM Technologies v Council and Commission [2005] ECR II‑5393, paragraphs 158 and 159, and Case T‑383/00 Beamglow v Parliament and Others [2005] ECR II‑5459, paragraphs 172 and 173). When damage is caused by conduct of the Community institutions not shown to be unlawful, the Community can incur non-contractual liability if the conditions as to sustaining actual damage, to the causal link between that damage and the conduct of the Community institutions and to the unusual and special nature of the damage in question are all met (Dorsch Consult v Council and Commission, paragraph 19; FIAMM and FIAMM Technologies v Council and Commission, paragraph 160; and Beamglow v Parliament and Others, paragraph 174). 154 It has been held that in the present case no causal link has been established between the conduct of the defendants described by the applicants and the damage alleged by the latter. It is therefore necessary to reject as unfounded the applicants’ claims relating to non-contractual liability of the Community in the absence of unlawful conduct on the part of the defendants, and there is no need to rule on whether the other conditions for such liability are met in this case, namely whether there is actual damage and whether the damage is unusual and special. 155 It should moreover be observed that the Court has no jurisdiction, in the absence of a finding that Community institutions are non-contractually liable, to rule on the award of compensation to victims of a disease, on the basis in particular of an alleged principle of solidarity. It should be noted, in any event, that in the present case ‘solidarity allowances’ were granted to the applicants by the French Government in June 2004 and in January 2005 on grounds of the damage sustained by the victims and their heirs as a result of the disease nvCJD. The compensation in question includes sums in respect of the damage suffered by each of the victims and also sums in respect of the damage suffered by each of the members of their families. 156 In the light of the above, the applicants’ claims relating to non-contractual liability of the Community in the absence of unlawful conduct on the part of the defendants must be rejected. 157 The action must therefore be dismissed in its entirety. Costs 158 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. However, under Article 87(3), where each party succeeds on some and fails on other heads, or where the circumstances are exceptional, the Court of First Instance may order that the costs be shared or that each party bear its own costs. 159 In view of the circumstances of the present case, in particular the fact that the Commission and the Council have for the most part been unsuccessful in their claims on the admissibility of the action, the Commission and the Council must be ordered to bear the costs arising from the pleas relating to admissibility, which the Court sets at one quarter of the total costs. The applicants will bear three quarters of the costs. On those grounds, THE COURT OF FIRST INSTANCE (First Chamber) hereby: 1. Dismisses the action as inadmissible as regards É. R., O. O., J. R., A. R. and B. P. R; 2. Dismisses the remainder of the action as unfounded; 3. Orders the applicants to bear three quarters of the costs and the Council and the Commission to bear one quarter of the costs. García-Valdecasas Cooke Labucka Delivered in open court in Luxembourg on 13 December 2006. E. Coulon J.D. Cooke Registrar President Table of contents Facts I – Outbreak of bovine spongiform encephalopathy and new variant Creutzfeldt-Jakob disease, and Community and national measures to combat those diseases II – Particular circumstances of the applicants and proceedings instituted before the French administrative and judicial authorities Procedure and forms of order sought Admissibility I – The first plea of inadmissibility: failure to make clear the basic legal and factual particulars on which the action is based A – Arguments of the parties B – Findings of the Court II – The second plea of inadmissibility: failure to exhaust national remedies and a link with national proceedings A – Arguments of the parties B – Findings of the Court III – The third plea of inadmissibility: expiry of the limitation period A – Arguments of the parties B – Findings of the Court Substance I – Non-contractual liability of the Community for unlawful conduct of the defendant institutions A – Arguments of the parties 1. The unlawful conduct alleged against the Council and the Commission a) The complaint alleging manifest errors of assessment in the management of the BSE crisis b) The complaint alleging misuse of powers c) The complaint alleging infringement of the principles of protection of legitimate expectations and of sound administration 2. The existence of damage 3. The existence of a causal link B – Findings of the Court 1. The dates on which the victims became infected and the incubation period of the disease 2. The existence of a causal link between the damage pleaded and the conduct alleged against the Council and the Commission a) The alleged delay in banning meat-and-bone meal b) The alleged delay in banning the use of SRM c) Other conduct alleged against the Council and the Commission 3. Conclusion II – Non-contractual liability of the Community in the absence of unlawful conduct on the part of the defendant institutions A – Arguments of the parties B – Findings of the Court Costs * Language of the case: French.

The Judgment of the Court was delivered by N. RAY, J.- This special leave petition is directed against the judgment of the High Court of Himachal Pradesh at Simla in Civil Review No. 10 of 1991 passed on December 13, 199 1. On the said special leave application numberice was issued limited to the extent, namely, whether the petitioners are entitled to the pro rata quantity of resin supplied for distribution. It may be stated here that the review application being Review No. 10 of 1991 was filed by the petitioners in the Himachal Pradesh High Court in companynection with the judgment dated April 10, 1991 passed by the said High Court in Civil Writ Petition No. 57 of 1979. By the aforesaid order dated April 10, 1991, the High Court partly allowed the writ petition moved by the petitioners. The petitioners filed the writ petition in the High Court inter alia companytending that despite solemn assurance given by the Government of Himachal Pradesh to the petitioners that they would be supplied 750 metric tonnes of resin if they would establish a factory at Himachal Pradesh where such resin would be required for manufacturing purpose, the State Government failed and neglected to supply such quantity of resin to the petitioners when the petitioners had in fact established such factory by incurring substantial expenses. Such companytention of the petitioners was, however, opposed by the State of Himachal Pradesh and it was inter alia companytended that there was numbersuch solemn assurance to supply 750 metric tonnes of resin to the petitioners annually for a period of ten years from 1972 as companytended but it was decided that such supply should be made subject to the availability of resin. It was companytended by the State Government that as gradually the production of resin declined and it was number possible even to meet the requirement of the establishments of the Forest Corporation of the Government of Himachal Pradesh, it was number possible for the State Government to supply 750 metric From the Judgment and Order dated December 13, 1991 of the Himachal Pradesh High Court in C.R. No. 10 of 1991 tonnes of resin to the petitioners and the Government also had number been able to supply the desired quantity of resin to other producers and there had been cut in supply of resin to other producers and manufacturing units of the State. It may also be stated here that on the allegation that the petitioners failed and neglected to lift resin offered to them by the Government of Himachal Pradesh, the petitioners unit at Himachal Pradesh was de-registered and such action of deregistration was also challenged by the petitioners in the writ proceedings. As aforesaid, the High Court in disposing of the writ proceedings allowed the writ petition in part inter alia quashing the order of de-registration of the petitioners unit and the High Court also directed to take proper decision for issuing genuineness certificate to the petitioners for the purpose of claiming exemption of taxes. The High Court also gave a direction that the respondents would supply to the petitioners in future the raw material, namely, the resin subject to the availability of such resin. Being aggrieved by the latter direction of the High Court to supply resin subject to the availability and number accepting the case of the petitioners that 750 tonnes was to besupplied to the petitioners, a review application was filed by the petitioners for taking numbere of a particular document which according to the petitioners companyld number be made available at the time of hearing and the companytents of the said document had clearly supported the case of the petitioners that there was a solemn assurance to supply 750 tonnes of resin to the petitioners. Such review application was, however, rejected by the High Court by numbering that the companymunication sought to be relied upon by the petitioners in support of the application had already been taken numbere of and the writ petition was disposed of on companysideration of such document. As already stated, the special leave application was filed against the rejection of the review application and the limited numberice as indicated hereinbefore was issued by this Court. A companynter-affidavit has been filed on behalf of the respondents in the special leave application and it has been specifically stated in such companynter-affidavit that there has been steady decrease in the production of resin and it has been stated that in the year 1972-73 when 16.75 lakh blazes were available for tapping from the Government forests then subject to availability, 750 tonnes of resin was decided to be supplied to the petitioners. But in the year 1990 the total number of blazes for tapping were only about 15.58 lakhs which were hardly sufficient to meet the demand of even the factories run by the Forest Corporation of the Government of Himachal Pradesh. It has been further stated that as a matter of fact, the resin from the Government forests tapped by the Forest Corporation, is at present being used by the factories of Forest Corporation at Nahan and Bilaspur. It has also been companytended that at numberpoint of time, there was any such firm assurance given to the petitioners that 750 tonnes of resin was to be supplied to the petitioners every year. It was made clear that the intended supply of 750 tonnes was subject to the availability and as a matter of fact when lesser quantities had been supplied to the petitioners on earlier occasions, the petitioners had number raised such companytention that there was such solemn assurance to supply 750 tonnes without any companydition imposed. It was only at a later stage, the petitioners started making such companytentions. Be that as it may, at the time of hearing the special leave petition on the basis of the limited numberice issued by this Court, the learned companynsel appearing for the respondents has categorically submitted that pursuant to the orders of the High Court, the petitioners unit has been registered and certificate of genuineness has also been issued to the petitioners. The respondents in terms of the direction given by the High Court are prepared to supply to the petitioners along with other allottees, the resin on the basis of availability of the stock on pro rata basis and there is numberintention of the respondents to take any vindictive attitude against the petitioners and to discriminate the petitioners in any manner. The learned companynsel for the petitioners, however, has submitted before us that if on the basis of the availability of stock position of the resin, supply to the petitioners and other similarly circumstanced units are made on uniform basis, the petitioners, in the facts and circumstances as prevalent, may number have any legitimate grievance. But the petitioners are apprehending trouble because the petitioners are being treated as a new unit and if the petitioners are treated as a new unit which the respondents improperly had intended to do, the petitioners will be given lesser quantity of resin even if the principle of pro rata distribution is adhered to because in that event, the new unit will be entitled to get lesser quantity even on the existing principle of pro rata distribution. Such companytention has, however, been disputed by the learned companynsel for the respondents. It appears to us that there cannot be any occasion to treat the petitioners as a new unit. In the facts and circumstances of the case, it is quite apparent that the petitioners have failed to get any direction from the High Court that the petitioners are entitled to receive supply of 750 tonnes on the basis of assurances given to them irrespective of stock position of resin. But the High Court has specifically directed that the petitioners are entitled to get pro rata distribution along with other allottees on the basis of the availability of the stock and the action of de-registering the petitioners has been struck down by the High Court.

Mr Justice Burton : There are at present two pending proceedings between the same parties, the history and nature of which are fully described in the judgment of Walker J in the Commercial Court on 14 August 2009 after a hearing on 15 to 16 June 2009, to which I respectfully refer. There were before him two applications, brought by the Defendant in what he called the London claim, Sebastian Holdings Inc ("SHI"), a company incorporated under the laws of the Turks and Caicos Islands, of which the sole shareholder and director is Mr Alexander Vik, against the Claimant in the London claim, Deutsche Bank AG ("DB"), a global investment bank incorporated under the laws of Germany, with its headquarters in Frankfurt and substantial offices throughout the world including New York, London and Geneva. Walker J dealt with the first of those two applications, being an application for a declaration that the English court has no jurisdiction to try the London claim. This application was resolved by Walker J, who concluded that the application failed, because there was such jurisdiction, by reference to the existence of jurisdiction clauses, to which I shall refer. Consideration of the second application, an alternative claim for a stay of the London claim on grounds of forum non conveniens and lis alibi pendens - by reference to the New York proceedings already instituted between the same parties, in which SHI is Claimant and DB Defendant, referred to by Walker J as the New York claim - was adjourned, to be dealt with once the Learned Judge had given his decision on the question as to whether the English court had jurisdiction, and it is that application which has now been restored before me. As Walker J described, the New York claim was in fact commenced slightly under two months before the London claim, although at a time when the parties were already clearly in dispute. Walker J summarises the content of the two claims, respectively in paragraphs 37 to 38 of his judgment as to the New York claim and paragraph 39 in relation to the London claim, and no issue has been taken as to the accuracy of such summary. SHI issued the two applications to which I have referred, by an Application Notice in the Commercial Court dated 4 March 2009, which resulted in the hearing before Walker J on 15 to 16 June and his judgment on 14 August. The parallel motions in the New York proceedings were issued by the respective parties on 23 and 24 February 2009, on the part of SHI seeking an order from the New York court to restrain DB from continuing with the London claim, and on the part of DB seeking dismissal of the New York proceedings on various grounds, or a stay of the New York claim on the grounds of forum non conveniens and lis alibi pendens. I am informed that the New York court heard argument on the parties' respective motions on 30 April 2009, and no decision or judgment has yet been forthcoming. I have heard argument on this stay application by SHI on 17 to 19 November 2009, and now give my decision. Since 14 August 2009, SHI has made an application for permission to appeal Walker J's judgment (after refusal by the Learned Judge) to the Court of Appeal. This was refused on paper, but with detailed reasons, by Sir Richard Buxton on 22 October 2009, and such application is to be renewed by way of an oral hearing before the Court of Appeal on 3 December 2009. The submissions before me have therefore been required to be upon the basis of an acceptance by SHI of Walker J's conclusion that the entirety of the proceedings in the London claim falls within the jurisdiction of the Commercial Court. Mr David Foxton QC, who has appeared, before me, as he did before Walker J, on behalf of DB, pointed out, with some justification, that some at least of the submissions in the skeleton argument prepared for this application by Mr Tim Lord QC and Mr Jasbir Dhillon (who have similarly appeared before me, as before Walker J) could be said to have strayed outside that position (see in particular paragraph 12 of that skeleton). However the oral submissions before me were, on both sides, inevitably upon that basis, pending, and subject to the possibility of, a successful appeal by SHI if permission were to be granted. Similarly, I have had to decide this case upon the basis that, by virtue of the delay since 30 April 2009, it is not known whether the New York court will decide to stay the New York claim. In SHI's skeleton, to which I have referred, the case for a stay of the London claim was put upon two alternative bases. The first was the traditional basis that, notwithstanding the fact that the English court has jurisdiction, the New York court, in which proceedings have already been issued, is the clearly more appropriate forum. The second basis was by reference to a case that there should be a stay of some part of the London claim, if not of all of it, on what was called the 'case management' basis. This arises from a line of authority which appears to have commenced in Reichhold Norway ASA and another v Goldman Sachs International (a Firm) [2000] 1 WLR 173 CA and further discussed in National Westminster Bank v Utrecht-America Finance Company [2001] 3 AER 733 CA and CNA Insurance Co Ltd v Office Depot International (UK) Ltd [2007] Lloyd's Rep IR 89. Its particular genesis was in paragraphs 79 of the judgment of Walker J, in which he left open the possibility of such case management considerations in this case. In oral submissions however, Mr Lord QC did not pursue that alternative case at this stage, while reserving the argument that such a position might arise later in these proceedings if: i) no stay of the London claim were ordered on his main, forum non conveniens, ground; ii) there were no order in New York staying or dismissing the New York claim; iii) absent any such order, or any agreement between the parties otherwise, the two actions continued in parallel; and iv) aspects of the London claim could be severed and identified as being more conveniently tried in New York, if that were a feasible proposition: but he accepted that he was not in any position to suggest any such severance at this stage. Mr Foxton QC does not accept that any stay/severance on case management grounds would be arguable either in law (see for example CNA Insurance (supra) at paragraph 94) or on the facts in this case. Walker J described, in paragraph 35 of his judgment, the seven agreements mainly in issue between the parties, four of them under the heading "Equities Agreements", MNA, EPBA, EIMA and LFOA, and three of them under the heading "FX Agreements", AMA, FXPBA and the FX Pledge Agreement. For the purposes of the argument before me, the last of those agreements has not been material. This judgment is enabled to be considerably more concise than it would otherwise have been by virtue of my grateful adoption of the content of Walker J's judgment, to which I refer. By reference to it, and to the submissions before me, it is apparent that there are, as between DB and SHI, three areas of dispute, all of which have been found by Walker J to fall within the jurisdiction of the English courts: i) As asserted by DB, a claim in respect of SHI's trading in equities, as a client of DB London. This is governed by one or more of the four Equities Agreements described above, all of which are subject to English law. The equities trading was carried out in London. Mr Said, to whom specific reference is made in relation to the FX trading, had no involvement in equities trading. The account was handled in London, and the transactions were entered into, or, at any rate, recorded, in London. A claim is made by DB in the London proceedings in respect of the sum allegedly due on SHI's equities account of US$125,523,086. Mr Lord was unable to submit that there are no disputes about the nature or content of the equities trading or as to the quantum of the sum claimed. ii) A dispute about SHI's FX trading, as a client of DB New York. There are, as set out above, two relevant agreements relating to FX trading, which are described by Walker J in his judgment. The AMA (a close relative to the EIMA, because both of them substantially incorporate the terms of the Master Agreement of ISDA [the International Swap Dealers Association Inc]) is governed by English law, and the FXPBA is governed by New York law. The trading of the FX account was, as described by Walker J, carried out in New York, or at any rate in New Jersey, and on the instruction of Mr Said on behalf of SHI, who was based in Connecticut. Although the relevant trading was carried out or initiated in what Mr Lord has called the New York metropolitan area (so as to subsume the parts of the different states of New Jersey and Connecticut local to New York City into the same geographical area), the accounts were, as DB describes, kept and recorded by DB's London office in London. DB claims, in the London proceedings, US$120,650,166, which is claimed to be the deficit on the FX account, said by DB to be arrived at in the manner described in the London claim, as summarised by Walker J, in particular at paragraphs 39(3) to (10) of his judgment. SHI does not presently identify any specific issues about the content of individual FX transactions (which DB in any event asserts to have been carried out under the terms of the AMA, not the FXPBA). Their complaints are substantial, and revolve around the case that, although Mr Said had some authority to carry out and instruct FX transactions, there was an express limit on the FX transactions by reference to an alleged oral agreement (evidenced in emails) that SHI's maximum exposure in connection with the FX trading, to be conducted by Mr Said, was limited to US$35m (the "Collateral Limitation Agreement"). DB submits that the existence and validity of any such oral agreement must be tested against the clauses of the AMA (governed, as stated above, by English law) which included (by Clause 9(a) and (b)) an entire agreement clause and a no amendment or waiver clause. SHI asserts that the existence of the trading very substantially in excess of that US$35m exposure was deliberately disguised by the publication of false information on DB's website. As I have indicated, the evidence is that FX accounts were recorded and kept in London: there is no evidence as to where the website is compiled. iii) There is then the concatenation of consequences of the alleged over-trading on the FX accounts, the alleged breach of the Collateral Limitation Agreement, and the alleged fraudulent concealment. They include the closing out of positions both in the equities and FX accounts, and the transfer of substantial sums from the equities account to cover the purported shortfall on the FX accounts. This is summarised in paragraph 37 of an affidavit sworn by Mr Vik in the New York proceedings on 19 February 2009 as follows: "After the purported margin calls and the alleged deficiencies in mid October 2008 … the Bank engaged in activities which amount to nothing more than wrongfully converting assets of [SHI] in its accounts of the Bank in London and Geneva, closing trades and then still claiming that almost $250 million is owed by SHI to the Bank." SHI would assert that there would be no liability on the equities account, because there should not have been a close out and transfer to meet alleged debts on the FX account. DB denies that there was any breach of contract or duty and asserts an entitlement to transfer sums from the equities account to the FX account pursuant to the terms of the EPBA, both governed by English law. The question is whether the whole English proceedings, embracing these three areas of dispute, should be stayed on the grounds that New York is a more convenient forum. As described by Walker J, there are the following (material) jurisdiction provisions in the seven agreements referred to in paragraph 7 above: i) As to the equities agreements, EPBA has a provision for the exclusive jurisdiction of the English courts, as does MNA (which also includes a clause to the effect that the parties will not object to proceedings in the English courts on the basis that such court is an inconvenient forum, which I shall call an "FNC [forum non conveniens] waiver clause". LFOA provides for the non-exclusive jurisdiction of the English courts and also an FNC waiver clause. EIMA also provides for the non-exclusive jurisdiction of the English courts, coupled with what Walker J referred to as an "other jurisdiction acceptance" clause, i.e. underlining the non-exclusive jurisdiction of the English courts by confirming the availability of other relevant jurisdictions – but of course the FNC waiver would not apply to any other jurisdiction than the English courts. ii) As to the FX agreements, the AMA provided for the non-exclusive jurisdiction of the English courts, with the FNC waiver clause, and, like the EIMA, included the other jurisdiction acceptance clause. The FXPBA provided for the non-exclusive jurisdiction of the courts of and in New York with no FNC waiver clause, nor the other jurisdiction acceptance clause). There are thus, in the series of inter-related agreements governing the dealings between the parties, five jurisdiction clauses providing for the English courts (two exclusive, two non-exclusive with FNC waivers) and one (non-exclusive) jurisdiction clause providing for the New York courts. As set out in paragraph 4 above, Walker J has concluded that all three aspects of the disputes between the parties, set out in paragraph 8 above, fall within the English jurisdiction clauses referred to above. So far as the New York courts are concerned, on the face of the present pleadings, only the second and third aspects of the disputes are presently included. Mr Lord submits, or asserts, that the first aspect, namely that any disputes as to the substantive content of the equities trading and (subject to resolution of the third aspect of the dispute) any balance due on the equities account, would also fall within the jurisdiction of the New York court, even if not within the terms of the FXPBA, but Mr Foxton does not accept this, and there is presently no evidence in this regard. Mr Lord's submissions in support of his stay application can be summarised as follows: i) The Court should not play the 'numbers game' in relation to counting up jurisdiction clauses. The substantial dispute is that of SHI, relating to FX trading and its handling, and can and should be resolved in the New York claim. The centre of gravity is in New York and revolves around the FXPBA, and even if the disputes relate to or fall to be decided under the AMA, the AMA provision is for non-exclusive jurisdiction of the London courts, and the New York proceedings, albeit stalled since 30 April 2009, have been commenced and, as a matter of fact, were commenced first. The balance of the disputes should and, he asserts, can, all be heard and dealt with in the New York proceedings. ii) Even if consideration must be given to the exclusive jurisdiction clauses within MNA and EPBA and the waiver of FNC in the EIMA, MNA and LFOA, there are nevertheless, by reference to the relevant authorities, to which I will turn, strong or exceptional or overwhelming reasons or grounds by reference to the interests of justice, namely the multiple and conflicting jurisdiction clauses, and, as above, the existence of the centre of gravity of the dispute in New York, where there is an existing lis. iii) New York is the clearly more appropriate forum, by reference to the location of the witnesses in relation to the FX dispute. By virtue of the findings of Walker J, the matters in the London claim fall within a jurisdiction clause or jurisdiction clauses, which bring into play Article 23 of Council Regulations (EC) 44/2001 ("the Regulations"). There is a live dispute between the parties as to whether, in any event, a defendant has any entitlement to rely on an application based upon forum non conveniens to seek to persuade the English court to decline such jurisdiction. This argument arises by reference to the considerable judicial and academic discussion stemming from the decision of the European Court in Owusu v Jackson & Others [2005] ECR I-1383, [2005] QB 801, in which the European Court concluded that where a court - in that case England and Wales - had jurisdiction under Article 2 of the Regulations, by reference to the defendant's domicile, there was no room for the application of the Anglo-Irish concept of stay on grounds of forum non conveniens, so that the English court could not divest itself of its jurisdiction. The Owusu point is relied upon by Mr Foxton so as to preclude SHI from pursuing its stay application, even if it be otherwise well-founded. I shall address the Owusu point later. Stay at Common Law There have been so many authorities relating to the question of forum non conveniens in recent years (a positive bible of some 38 of the leading authorities has been put before me), that I do not consider that there is any need to recite them all, nor the propositions which arise or can be derived from them, once again in this judgment. I will limit myself to seeking to address (by reference to them) two questions (i) the hierarchy of jurisdiction clauses (ii) the import of the decision in the House of Lords in Donohue v Armco Inc and Others [2002] 1 Lloyd's Rep 425 HL. As to the 'hierarchy', it is clear that the most 'stringent' form of jurisdiction clause is the exclusive jurisdiction clause. This has a positive and a negative impact. It prescribes one jurisdiction (or sometimes one of two, dependent upon specified circumstances), in which the parties must then litigate, often providing for methods of service and even for specific courts within the jurisdiction. As to the negative impact, it renders it a breach of contract for a party to issue proceedings against the other in any other jurisdiction than the agreed exclusive jurisdiction. The next most stringent clause is a non-exclusive jurisdiction clause with a waiver of FNC. This will normally provide for one (or possibly more than one) jurisdiction in which a party may be sued by the other party, and there is a waiver of FNC, which means that the non-exclusive jurisdiction so chosen is elevated above others, because, with regard to that jurisdiction, but not as to any others, the parties agree not to assert that to be sued there would be inconvenient, oppressive or expensive. If a party then issues proceedings in the chosen, but non-exclusive, jurisdiction, and the other party then asserts forum non conveniens, that party is in breach of contract in doing so. The lowest in the hierarchy is the non-exclusive jurisdiction. This may be accompanied by an other jurisdiction acceptance clause. This addition would seem only to make explicit what would, in any event, be implicit from the very fact that the chosen jurisdiction is not exclusive (and there is no FNC waiver), namely that (i) proceedings may be issued by a party without being in breach of contract in another jurisdiction (ii) there may thus even be parallel proceedings, inconvenient, expensive and burdensome though that may be, and giving rise to a risk of inconsistent judgments. Bingham LJ in Du Pont v Agnew [1987] 2 Lloyd's Rep 585 at 589 emphasised that the policy of the law must be to favour the litigation of issues once only. In The El Amria [1981] 2 Lloyd's Rep 119 at 128-9, Brandon LJ referred to the need to keep in mind the "potential disaster" of the risk of inconsistent decisions on the same issues inherent in a multiplicity of proceedings. However, in Royal Bank of Canada v Coöperative Centrale Raiffeisen Boerenleenbank BA [2004] 2 AER (Comm) 847 at paragraph 21, Evans Lombe J, with whom Thorpe LJ agreed, referred to an other jurisdiction acceptance clause, as, in his view, showing that the parties "must have had in contemplation the possibility of virtually simultaneous trials, with all the additional burdens which the judge describes, since such is an obvious possible consequence of permitting parallel proceedings in the absence of provision in the jurisdiction clause, or elsewhere in the agreement, for the means of avoiding those consequences". In Highland Crusader Offshore Partners LP and others v Deutsche Bank AG [2009] EWCA Civ 725 when overturning my grant of an injunction in the Commercial Court ([2009] 2 Lloyd's Rep 61), Toulson LJ, with whom Carnwath and Goldring LJJ agreed, stated, in terms, in paragraph 64 of his judgment, that "a non-exclusive jurisdiction clause self-evidently leaves open the possibility that there may be another appropriate jurisdiction". Gross J in Import Export Metro Ltd v CSAV [2003] 1 Lloyd's Rep 405 at 412 stated that "while a multiplicity of proceedings is, in general, undesirable and very likely to some extent inconvenient, the gravity of the risks to which it gives rise and the weight to be given to this factor will turn on the facts of the individual case". The ordinary rules at common law, where there is a straightforward clash of jurisdictions with no relevant jurisdiction clause affecting the issues, are found in the seminal decision of the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460. On an application for a stay based upon forum non conveniens, the first and major test is, the burden being upon the defendant seeking the stay, to show that there is a clearly more appropriate forum. It is, however, clear that that position is fundamentally affected where there are jurisdiction clauses. It was perhaps in question prior to Donohue whether a stay application on grounds of forum non conveniens was ever appropriate by way of challenge to the jurisdiction of the English court, where that jurisdiction was based upon an exclusive jurisdiction clause, with the court enforcing that exclusive jurisdiction clause effectively as a matter of contract between the parties. The decision in Donohue however made it clear that there could be a stay in the interests of justice, and thus, in a given set of facts, no enforcement of the contractual obligation; but only where there were "strong reasons for not giving effect to the exclusive jurisdiction clause" (paragraphs 24, 36 of Lord Bingham's speech at 433, 436): in that case Lord Scott found "very strong reasons indeed" (paragraph 75). The examples that are given by Lord Bingham, at paragraph 27, are "where the interests of parties other than the parties bound by the exclusive jurisdiction clause are involved, or grounds of claim not the subject of the clause are part of the relevant dispute so that there is a risk of parallel proceedings and inconsistent decisions". See also the examples of 'strong cause', which include what might be termed (within Spiliada) juridical disadvantages, given by Brandon LJ in The El Amria at 123-124. If even an exclusive jurisdiction clause will not trump a stay application, then at least a similar approach must follow in respect of a stay application brought on forum non conveniens grounds in breach of an FNC waiver clause. Lord Collins of Mapesbury in UBS AG v HSH Nordbank AG [2009] 2 Lloyd's Rep 272 at paragraph 101 set out a brief history in this regard. He pointed out that: "In National Westminster Bank plc v Utrecht-America Finance Co [[2001] 3 AER 733] at paragraph 23, Clarke LJ thought [an FNC waiver clause] was "fatal" to any forum non conveniens case, whereas in Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [[2003] 2 Lloyd's Rep 571] at para 36 Waller LJ did not treat such an agreement as decisive, but thought that it underlined the point that the jurisdiction agreement would be overridden only in exceptional circumstances." In Bank of New York Mellon v GV Films [2009] EWHC 2338 (Comm) Field J, dealing with an exclusive jurisdiction clause coupled with an FNC waiver clause, concluded that "especially strong reasons will be required before the exclusive jurisdiction clause can be departed from on grounds founded upon convenience". It is obvious therefore that if stays can be granted even where there is an exclusive jurisdiction or an FNC waiver clause, then an application for a stay can be considered in a non-exclusive jurisdiction case, where there is no FNC waiver clause. The significant factor is that there is no breach of contract involved in the party seeking to persuade the chosen court to decline jurisdiction. However in two recent and regularly quoted judgments in the Commercial Court conclusions have been reached, severally by Gross J in Import Export (supra) and by Gloster J in Antec International Ltd v Biosafety USA Inc [2006] EWHC 427 (Comm) that, by reference to cited authority, the test is or ought to be the same, and in effect equally difficult and exceptional, in relation to a stay sought where there is a non-exclusive jurisdiction clause. Gross J so concludes at paragraph 14(ii) of his judgment at 410, as does Gloster J, by reference to a number of earlier first instance judgments, in paragraph 7(ii) of her judgment. It is plain that weight must be given to the fact that the parties have chosen and/or not objected to the jurisdiction at the time of entering into the contract. Gloster J, at paragraph 7, having recited that "the general rule is that the parties will be held to their contractual choice of English jurisdiction unless there are overwhelming, or at least very strong, reasons for departing from this rule" (even in the case of a non-exclusive jurisdiction clause), continued: "Such overwhelming or very strong reasons do not include factors of convenience that were foreseeable at the time that the contract was entered into (save in exceptional circumstances involving the interests of justice); and it is not appropriate to embark upon a standard Spiliada balancing exercise. The defendant has to point to some factor which it could not have foreseen at the time the contract was concluded. Even if there is an unforeseeable factor, or a party can point to some other reason, which, in the interests of justice, points to another forum, this does not automatically lead to the conclusion that the court should exercise its discretion to release a party from its contractual bargain". This emphasis that the matters relied upon by way of inconvenience must not have been foreseeable derives most obviously from the often quoted words of Waller J in British Aerospace plc v Dee Howard Co [1993] 1 Lloyd's Rep 368 at 376: "… they must point to some factor which they could not have foreseen on which they can rely for displacing the bargain which they made, i.e. that they would not object to the jurisdiction of the English court." The "exceptional circumstances" to which Gloster J refers by way of an exception to this general rule appear to derive from the words of Rix LJ, giving the judgment of the Court of Appeal in Ace Insurance SA-NZ v Zurich Insurance Co [2001] 1 Lloyd's Rep 618 at paragraph 62 of his judgment where, having referred to the words of Waller J and the need for unforeseeability, he seems to have in mind that a party to a non-exclusive jurisdiction clause could escape its effect not only by showing some unforeseeable matter but also by showing "some matter which lies beyond considerations of convenience and goes to a matter of justice". Mr Lord QC submits that, if a party is over the hump, or through the eye of the needle, or past the gateway of "interests of justice" or "a matter of justice", then ordinary Spiliada principles apply. I do not accept this, and respectfully agree with Gloster J in the passage quoted above. It seems to me plain that, if there is to be an exceptional case, where forum non conveniens arguments are to prevail, a fortiori in an exclusive jurisdiction or FNC waiver case, but even in the case of non-exclusive jurisdiction, the burden on the applicant to establish such a case must be a heavier, perhaps, in exclusive jurisdiction cases, a much heavier, one than if there were no jurisdiction clause at all. If the matters were unforeseeable at the time of the contract, then the burden may be the more easily satisfied. If however the matters were foreseeable, for example if, as here, the parties entered into a series of interlinked agreements with different jurisdiction clauses, then it would not be possible to suggest – nor is it suggested here – that it was not foreseeable that a clash or contest of jurisdictions might not arise. In the absence of unforeseeability, and in this case in the absence of any impact on the parties, or on the issue of jurisdiction, of any third parties (such as featured considerably in Donohue), then the strong or very strong or exceptional grounds, said to engage the interests of justice and satisfy the necessary burden, must be all the more compelling. What then are the matters relied upon by SHI? The starting point is SHI's case that the issues primarily to be resolved in the proceedings relate to the FXPBA and to FX dealing in New York. Hence their contentions on Spiliada principles concentrate upon the geographical location of witnesses in the New York metropolitan area, Mr Said in Connecticut, the DB personnel in New Jersey, and the DB staff at the DB office in New York. But Mr Vik is based in Monaco and is plainly an international traveller, and it is far from clear (in the absence of any particularisation as yet in either the New York or London claims) that the parties to the alleged Collateral Limitation Agreement, or to any conversations or email or other correspondence which are said to evidence it, are, or are all, based in New York, as opposed to Geneva, London or Monaco. In any event, as is so often now said in commercial proceedings, international travel is not complex, and, given the fact that (as appears in paragraph 8(i) above) Mr Lord is unable to say that there are no disputes about the details of equities trading, it is far from clear that there may not need to be witnesses from London and/or Geneva in respect of the disputes identified in paragraph 8 above, particularly the allegedly fraudulent manipulation of the two accounts, and transfers between them, both physically kept in London, and the allegedly fraudulent information supplied on the website. The Defendant plainly argued on their jurisdiction application (no doubt by reference to paragraphs 84 and 95 of UBS AG (supra)) that greater emphasis should be placed upon the jurisdiction clause in the FXPBA because that agreement was at the commercial centre and the parties must have intended it to apply to the claims and cross-claims now made or to be made (by way of defence to the alleged balances due on both accounts) in the London claim. In refusing permission to appeal to the Court of Appeal on paper, Sir Richard Buxton considered that "it is unreal, in the light of the total transactions between the parties, to contend … that the FXPBA had "primacy" to the exclusion of the implications as to the jurisdiction to be drawn from other agreements". To similar effect, I am not persuaded that the geographical location of the disputes, the subject matter of these claims, is so clearly New York that the applicability of the New York jurisdiction clause to claims relating to the detail of FX trading (which may not in the event require examination – see paragraph 8(ii) above) should carry more weight. The interests of justice are said to be engaged by virtue of the interlocking nature of the agreements and the multiplicity of jurisdiction clauses, so that the fact that by reference to one or more of them there is jurisdiction, even exclusive jurisdiction, in London, should be ousted by strong reasons, in the interests of justice, means that the dispute should be litigated in New York. There has been no close analysis before me of the facts, nor a detailed analysis of the contractual provisions, in particular of the FXPBA (subject to New York law) and the AMA (subject to English law), and their competing impacts upon the major complaint by SHI with regard to the exceeding of the exposure and the concealing of the true picture. In order for the pull of the New York claim to prevail over the proper and contractual location of proceedings in London pursuant to the English jurisdiction clauses (leaving aside the fact that they include exclusive jurisdiction and FNC waiver clauses), there must be powerfully persuasive arguments as to the inappropriateness of the English forum. In the end, Mr Lord's submission really came down to his emphasis that all proceedings should be resolved in the same place, and that that place should be New York and that the existence of parallel proceedings is inappropriate and indeed a potential disaster (see paragraph 17 above). However: i) The existence of another lis is not enough of itself. Even Gross J in Import Export, after emphasising the undesirability of multiplicity of proceedings, did not, on the facts of that case, regard it as sufficient to grant a stay (paragraph 24(iv)). Similarly the existence of proceedings in Florida was not regarded by Patten J in Breams Trustees Ltd v Upstream Downstream Simulation Services Inc and others [2004] EWHC 211 (Ch) as sufficient of itself to grant a stay, particularly where those proceedings were subject to an outstanding jurisdictional challenge (paragraphs 27-28 of his judgment) – as in this case. Patten J stated, at paragraph 27, that "… strong reasons do not include the mere existence of lis alibi pendens between the parties in a foreign court. If that were so, a party to a non-exclusive jurisdiction clause could avoid its agreement at will by commencing proceedings in another jurisdiction of its choice. Something more is needed". It might be different if, as Waller J pointed out in British Aerospace (supra) at 376, the party resisting the stay had taken part in the foreign proceedings without protest, and if proceedings had reached the stage at which enormous expenditure had been incurred by both sides and the matter was accordingly nearly ready for trial. Bingham LJ in Du Pont (supra) at 593 made it clear that the outcome should not be affected by which proceeding came first, which might well be little more than an accident of timing: Toulson LJ (echoing words of Lord Brandon in The Abidin Daver [1984] AC 398 at 423G) points out in Highland Crusader at paragraph 118 that "the natural consequence of treating [which action started first] as an important factor would be to encourage parties to rush to fire the first shot". ii) Plainly it is desirable to have all the disputes heard in one place. But it is far from clear that, if a stay is refused, that place may not be London. The English court is the first court to decide the issue of stay. The New York court may, when it publishes its judgment, come to a decision to the same effect, on the contested motions before it. In any event, as I have set out in paragraph 10 above, it is not on the evidence before me clear that, whereas all the issues can be resolved in London, as a result of the conclusion of Walker J, such is necessarily the case in New York (a factor considered material in Donohue – see paragraph 18 above). I am not therefore satisfied that New York is clearly and distinctly the appropriate forum for the trial of the disputes set out in paragraph 8 above, and certainly not satisfied that there are exceptional circumstances, or strong or very strong reasons, why New York is the clearly more appropriate forum or why, exceptionally, the parties should not be kept to their bargain for English jurisdiction in relation to the four equities agreements and the AMA. I would therefore refuse this application for a stay at common law. Owusu Argument was however addressed to me in respect of the Owusu point, to which I have referred in paragraphs 12 and 13 above. The issue is whether that decision constrains the English court from declining jurisdiction once vested in it, pursuant to Article 23 of the Regulations, in respect of a claim brought by a party itself domiciled in another Member State, but against a party that is not domiciled in a Member State, in favour of the jurisdiction of a non-Member State, itself derived from a jurisdiction clause, and said to be a more convenient forum. In her judgment in Antec, Gloster J said, at paragraph 24: "It is clearly a moot point as to whether the ECJ's decision in Owusu predicates that a jurisdiction clause falling within Article 23 has mandatory effect, so that, once a court of a Member State is seised as a result of the invocation of such a clause, the Regulation requires the relevant court to take jurisdiction, so as to exclude any application of the forum non conveniens doctrine, even where the potential alternative jurisdiction involved is not a Member State. It could be argued that different considerations apply in relation to Article 23, which is not expressed in the mandatory terms of Article 2; and that Article 23 does not impose any requirement upon the court which is identified in the non-exclusive jurisdiction clause, to exercise such jurisdiction. It could further be argued that Article 23 preserves the concept of party autonomy in choice of court and, accordingly, the application of the forum non conveniens rule, where appropriate." She did not need to decide the point, and therefore did not express a conclusion, as similarly did not Sir Donald Rattee in HIT Entertainment Ltd v Gaffney International Licensing Pty Ltd and another [2007] EWHC 1282 (Ch) in which again the Owusu point was raised. At first instance, it has been found, or assumed, that Owusu applied so as to prevent an application for a stay on the grounds of forum non conveniens, in CNA (supra) per Langley J, in Gomez v Gomez-Monche Vives [2008] 1 AER (Comm) 973 (in relation to Article 5(6) not Article 23) per Morgan J, in Equitas Ltd v Allstate Insurance Co [2008] EWHC 1671 (Comm) per Beatson J and in Catalyst Investment Ltd v Lewinsohn [2009] EWHC 1969 (Ch) per Barling J. In Winnetka Trading Corp v Julius Baer International Ltd and another [2008] EWHC 3146 (Ch), however, Norris J did not consider that Owusu prevented reliance on a stay in an Article 23 case (at paragraphs 23-25), primarily by reference to a paragraph (2.102) in Briggs and Rees Civil Jurisdiction and Judgments (4th Ed). In Masri v Consolidated Contractors International (UK) Ltd and others [2009] QB 485, at paragraphs 125-6 Lawrence Collins LJ obiter, by reference to the decision of Colman J in Konkola Copper Mines plc v Coromin [2005] 2 Lloyd's Rep 585, considered that it would be "odd" if the Regulations did not permit the English court to stay its proceedings, where an action was brought in England in breach of a jurisdiction agreement providing for jurisdiction in the courts of a non-Regulation state, but, as Lord Collins, in UBS at paragraph 103, he later recorded that it was the "prevailing view" that there is no scope for the application of forum non conveniens to remove a case from a court which has jurisdiction under the Regulation, even as regards a defendant who is not domiciled in a Member State. His reference in UBS, so far as academic works are concerned, is to a work by Professor Briggs, and to various paragraphs of Dicey, Morris and Collins on the Conflict of Laws (14th Ed). I have already referred to a paragraph of Briggs and Rees, which was relied upon by Norris J for the opposite conclusion, whereas, in paragraph 2.2 to 2.3 of the same work, the Editors refer to Owusu and conclude that it is "dispiriting that the significant arguments against [the conclusion that there was no power to stay the proceedings on the grounds of forum non conveniens], put to the court in Owusu, did not receive any sensible evaluation by the court". Similarly, while paragraph 12-124 of Dicey, Morris and Collins, referred to in UBS, recites that a court chosen under Article 23 has no discretion to decline jurisdiction, in another paragraph, 12-021, the Editors speculate that a stay should be permissible, at least where there is a contract containing a jurisdiction agreement for a non-Regulation state or which is already the subject of proceedings before the courts of a non-Regulation state. This speculation arises because, the Editors point out, the European Court in Owusu did not answer the second of the two questions posed to it; had it done so we would have had the answer to whether it is "inconsistent in all circumstances, or only in some and if so which", for a court to decline to hear proceedings brought against a person domiciled in that state in favour of the courts of a non-contracting state. On any basis, suggests Barling J in Catalyst (supra) at paragraph 100, there should be a common law power to stay on grounds of abuse (e.g. in a case such as that postulated by Waller J in British Aerospace – see paragraph 28(i) above). I heard argument, both by reference to those authorities, academic and judicial, and to the speech of the Advocate General in Owusu, which is submitted by Mr Lord to have gone further than, and thus not been wholly adopted by, the judgment of the European Court, not least in the circumstances that the Court declined to answer the second question, and competing submissions on certainty, discretion and party autonomy, both by reference to the Recitals to the Regulations, and to the different wording of Articles 2 and 23, and otherwise. As it happens, I too have concluded that the Owusu point does not arise as necessary for me to resolve in order to reach a conclusion on this application, because I have decided that the stay application should, in any event, fail on its own merits at common law, as explained above. Any temptation that I might have had to reach a conclusion on the Owusu point, particularly after such full argument, has been alleviated by the recent decision of the Court of Appeal in Chaitan Choudhary and others v Damodar Prasad Bhatter and others [2009] EWCA Civ 1176, which has been supplied to me by Counsel for SHI since the hearing. In that case, Sir John Chadwick, with whom the rest of the Court agreed, resolved the case without reference to the Owusu point, which was argued before the Court, and then concluded, at paragraph 54: "The question whether there is any room at all for a Court having exclusive jurisdiction under the Judgments Regulation to stay proceedings on forum non conveniens grounds, even in a case where that jurisdiction arises in respect of a person who is not domiciled in a Member State, is a matter of controversy. It may be that the Court of Justice will take the opportunity to resolve that question on the reference which I understand to have been made by the Supreme Court of Ireland in Goshawk Dedicated Receivables Ltd v Life Receivables (Ireland) Ltd [2009] IESC 7 [2009] ILPr 26. Given the conclusions I have reached on questions (ii) and (iii), it is unnecessary to resolve that question in these proceedings. I prefer to express no view. It would, I think, be inappropriate to do so." Guided by those words, I conclude that it is inappropriate for me to do so either. Conclusion The application is accordingly dismissed.

The appellant has been companyvicted Under Section 120-B I.P.C. and sentenced to three years and six months R.I. and under Section 109 read with Section 420, I.P.C. sentenced to three years and six months R.I. and to pay a fine of Rs. 1000/- or in default of payment of which to further undergo R.I. for six months and Under Section 3 of the Railway Property Unlawful Possession Act, 1966 and Under Section 5 1 d of the Prevention of Corruption Act read with Section 5 2 sentenced to two years and three years Rigorous imprisonment respectively. Sentences were directed to ran companycurrently. The appellant was a Parcel Clerk in the Northern Railway. The prosecution case is that the Telecommunication Engineer, Moradabad, Northern Railway had placed a demand for three steel almirahs. Thereafter supply order with respect to the aforesaid almirahs was placed by the Senior Signal and Telecommunication Engineer with a firm. These three steel almirahs after usual inspection were despatched to Moradabad. Out of these three steel almirahs, two were directed to be sent to the Telecommunication Engineer, Lucknow and they were despatched on 28-11-1970. The prosecution story is that on the basis of the forged Railway Receipt these two steel almirahs were got despatched from Lucknow Northern Railway Station to Badshahnagar Railway Station, from where these were detrained and were illegally taken delivery on the basis of the forged receipts. The case was registered and ultimately the investigation showed that the appellant was responsible on the basis of the materials placed. Charges were framed and several witnesses were examined and both the companyrts below accepted their evidence. Learned Counsel for the appellant, however, submits that there is some discrepancy regarding the actual number but this has been explained by the companyrts below. What is more the prosecution has established that the almirahs recovered belong to the Railway and the possession was unlawful. We see numberground to interfere with the companyvictions. Now companying to the question of sentence, we think that the ends of justice would be met if the sentences of three years and six months, three years and six months and three years under Sections 120-B, I.P.C., 109 read with 420, I.P.C. and 5 1 d of the Prevention of Corruption Act read with Section 5 2 respectively are reduced to two years rigorous imprisonment under each companynt. The other sentences are directed to run companycurrently.

Dalveer Bhandari, J. People are often astonished to learn that a trespasser may take the title of a building or land from the true owner in certain companyditions and such theft is even authorized by law. The theory of adverse possession is also perceived by the general public as a dishonest way to obtain title to property. Property right advocates argue that mistakes by landowners or negligence on their part should never transfer their property rights to a wrongdoer, who never paid valuable companysideration for such an interest. The government itself may acquire land by adverse possession. Fairness dictates and companymands that if the government can acquire title to private land through adverse possession, it should be able to lose title under the same circumstances. We have heard the learned companynsel for the State of Haryana. We do number deem it appropriate to financially burden the respondents by issuing numberice in this Special Leave Petition. A very vital question which arises for companysideration in this petition is whether the State, which is in charge of protection of life, liberty and property of the people can be permitted to grab the land and property of its own citizens under the banner of the plea of adverse possession? Brief facts, relevant to dispose of this Special Leave Petition are recapitulated as under The State of Haryana had filed a Civil Suit through the Superintendent of Police, Gurgaon, seeking a relief of declaration to the effect that it has acquired the rights of ownership by way of adverse possession over land measuring 8 biswas companyprising khewat number 34, khata number 56, khasra number 3673/452 situated in the revenue estate of Hidayatpur Chhavni, Haryana. The other prayer in the suit was that the sale deed dated 26th March, 1990, mutation number 3690 dated 22nd November, 1990 as well as judgment and decree dated 19th May, 1992, passed in Civil Suit No. 368 dated 9 th March, 1991 are liable to be set aside. As a companysequential relief, it was also prayed that the defendants be perpetually restrained from interfering with the peaceful possession of the plaintiff petitioner herein over the suit land. For the sake of companyvenience we are referring the petitioner as the plaintiff and the respondents as defendants. In the written statement, the defendants raised a number of preliminary objections pertaining to estoppel, cause of action and mis-joinder of necessary parties. It was specifically denied that the plaintiff ever remained in possession of the suit property for the last 55 years. It was submitted that the disputed property was still lying vacant. However, the plaintiff recently occupied it by using force and thereafter have also raised a boundary wall of police line. It was denied in the written statement that the plaintiff acquired right of ownership by way of adverse possession qua property in question. The defendants prayed for dismissal of suit and by way of a companynter claim also prayed for a decree for possession qua suit property be passed. The Trial Court framed the following Issues in the suit. Whether plaintiffs have become owner of disputed property by way of adverse possession? OPP Whether sale deed 26.3.1990 and mutation number 3690 dated 22.11.90 are null and void as alleged? OPP Whether judgment and decree dated 19.05.92 passed in civil suit number 368 dated 9.3.91 is liable to be set aside alleged? OPP Whether the suit of the plaintiff is number maintainable in the present form? OPP Whether the plaintiff has numberlocus-standi to file the present suit? OPP Whether the plaintiff has numbercause of action to file the present suit? OPP Whether the suit of the plaintiff is bad for misjoinder of necessary parties? OPP Whether defendants number 1 to 4 are rightful owners of disputed property on the basis of impugned sale deed dated 23.6.1990 registered on 3.7.1990? OPP Whether defendants are entitled for possession of disputed property? OPP Relief. Issue No. 1 which relates to adverse possession and issue No. 4 pertaining to maintainability were decided together. According to the Trial Court, the plaintiff has failed to prove the possession over the disputed property because the plaintiff companyld number produce any documentary evidence to prove this. On the companytrary, revenue records placed on the file shows that the defendants are the owners in possession of disputed property. The Trial Court observed that possession of State, as claimed in the plaint for a companytinuous period of 55 years, stood falsified by the documents issued by the officials of the State. The Trial Court also observed that despite claiming adverse possession, there was numberpleading qua denial of title of the defendants by the plaintiff, so much so that the specific day when the alleged possession of State allegedly became adverse against the defendants has number been mentioned in order to establish the starting point of limitation companyld be ascertained. The Trial Court relied on the judgment of this Court in M. Karim v. Mst. Bibi Sakina AIR 1964 SC 1254 wherein this Court has laid down that the adverse possession must be adequate in companytinuity, in publicity and extent and a plea is required at the least to show when possession becomes adverse. The Court also held that long possession is number necessarily adverse possession. The Trial Court also relied on a decision of the High Court of Punjab and Haryana in the case of Bhim Singh Ors. v. Zile Singh Ors., AIR 2006 P and H 195, wherein it was stated that numberdeclaration can be sought by a plaintiff with regard to the ownership on the basis of adverse possession. The Trial Court came to specific companyclusion that despite the fact that the possession of the plaintiff over the disputed land is admitted on behalf of defendants, Issue No. 1 stand decided against the plaintiff. It was held that the suit of the plaintiff claiming ownership by way of adverse possession is number maintainable. Consequently, Issue No. 1 was decided against the plaintiff and Trial No. 4 was decided in favour of the defendants. The Trial Court decided Issue Nos. 2, 3, 5 and 6 together and came to the definite companyclusion that the plaintiff failed to prove its possession over the property in question. It was also held that the plaintiff had numberlocus standi to challenge the validity of the impugned sale deed, mutation as well as the judgment and decree because the plaintiff was neither the owner number in possession of the property in dispute. Consequently, the plaintiff had numberright to say that the impugned sale deed dated 26th March, 1990 was a sham transaction and the suit of mutation dated 22nd November, 1990 and, thereafter, the judgment and decree dated 19th May, 1992 passed in Civil Suit No. 386 dated 9th March, 1991 are liable to be set aside. The Trial Court came to the companyclusion that the plaintiff having numberright or title in the suit property has neither locus standi number cause of action to file the present suit. Issue Nos. 2 and 3 were decided against the plaintiff, whereas, Issue Nos. 5 and 6 were decided in favour of the defendants. Regarding Issue Nos. 8 and 9, the Trial Court observed that once it is held that defendant Nos. 1 to 4 are owners of the disputed property, which is presently in possession of the plaintiff without any right, they defendants are entitled to its possession. Hence, Issue Nos. 8 and 9 were also decided in favour of the defendants. Issue No. 7 was number pressed and decided against the defendants. Regarding Issue No. 10 relief the Trial Court observed as under As a sequel to the findings of this companyrt on the issues mentioned above, the suit of the plaintiff stands dismissed, however, companynter claim filed by defendants is decreed with companyts to the effect that they are entitled to possession of land measuring 8 biswas companyprising of khewat number 34 khata number 56 khasa number 3673/452 situated in revenue estate of Hidayatpur Chhavni village number the part of known as Patel Nagar, Gurgaon. Decree sheet be drawn accordingly. File be companysigned to the record room after due companypliance. The plaintiff, aggrieved by the judgment of the Trial Court filed an appeal Civil Appeal No. 33 before the learned Additional District Judge, Gurgaon. Learned Additional District Judge while deciding the appeal, relied on the judgment of the Punjab Haryana High Court delivered in the case of Food Corporation of India and Another v. Dayal Singh 1991 PLJ 425, wherein it was observed that it does number behove the Government to take the plea of adverse possession against the citizens. Learned Additional District Judge also relied on other judgments of Punjab Haryana High Court in the cases of Bhim Singh Ors. supra and Kanak Ram Ors. v. Chanan Singh Ors. 2007 146 PLR 498 wherein it was held that a person in adverse possession of immovable property cannot file a suit for declaration claiming ownership and such a suit was number maintainable. Before parting with the judgment the learned Additional District Judge observed regarding companyduct of the plaintiff that the present suit was filed by State of Haryana by the then Superintendent of Police, Gurgaon on 11th May, 1996. It was also observed by the learned Additional District Judge that the Police department is for the protection of the people and property of the citizens and the police department had unnecessarily dragged the defendants in unnecessary litigation. The appeal was dismissed with exemplary companyt of Rs.25,000/-. Unfortunately, despite serious strictures passed by the Court, the State of Haryana did number learn a lesson and preferred a Second Appeal RSA No. 3909 of 2008 before the High Court of Punjab and Haryana, Chandigarh against the judgments and decrees of the two companyrts below. The High Court, relying on the earlier judgments, observed that the welfare State which was responsible for the protection of life and property of its citizens, was in the present case, itself trying to grab the land property of the defendants under the garb of plea of adverse possession and hence the action of the plaintiff is deplorable and disgraceful. Unfortunately, the State of Haryana, is still number satisfied with the three strong judgments by three different forums given against the State and is still quite anxious and keen to grab the property of the defendants in a clandestine manner on the plea of adverse possession. In a democracy, governed by rule of law, the task of protecting life and property of the citizens is entrusted to the police department of the government. In the instant case, the suit has been filed through the Superintendent of Police, Gurgaon, seeking right of ownership by adverse possession. The revenue records of the State revealed that the disputed property stood in the name of the defendants. It is unfortunate that the Superintendent of Police, a senior official of the Indian Police Service, made repeated attempts to grab the property of the true owner by filing repeated appeals before different forums claiming right of ownership by way of adverse possession. The citizens may lose faith in the entire police administration of the companyntry that those responsible for the safety and security of their life and property are on a spree of grabing the properties from the true owners in a clandestine manner. A very informative and erudite Article was published in Neveda Law Journal Spring 2007 with the title Making Sense Out of Nonsense A Response to Adverse Possession by Governmental Entities. The Article was written by Andrew Dickal. Historical background of adverse possession was discussed in that article. Historical background The companycept of adverse possession was born in England around 1275 and was initially created to allow a person to claim right of seisin from his ancestry. Many felt that the original law that relied on seisin was difficult to establish, and around 1623 a statue of limitations was put into place that allowed for a person in possession of property for twenty years or more to acquire title to that property. This early English doctrine was designed to prevent legal disputes over property rights that were time companysuming and companytly. The doctrine was also created to prevent the waste of land by forcing owners to monitor their property or suffer the companysequence of losing title. The companycept of adverse possession was subsequently adopted in the United States. The doctrine was especially important in early American periods to cure the growing number of title disputes. The American version mirrored the English law, which is illustrated by most States adopting a twenty-year statue of limitations for adverse possession claims. As America has developed to the present date, property rights have become increasingly more important and land has become limited. As a result, the time period to acquire land by adverse possession has been reduced in some States to as little as five years, while in others, it has remained as long as forty years. The United States has also changed the traditional doctrine by preventing the use of adverse possession against property held by a governmental entity. During the companyonial period, prior to the enactment of the Bill of Rights, property was frequently taken by states from private land owners without companypensation. Initially, undeveloped tracts of land were the most companymon type of property acquired by the government, as they were sought for the installation of public road. Under the companyonial system it was thought that benefits from the road would, in a newly opened companyntry, always exceed the value of unimproved land. The doctrine of adverse possession arose in an era where lands were vast particularly in the United States of America and documentation sparse in order to give quietus to the title of the possessor and prevent fanciful claims from erupting. The companycept of adverse possession exits to cure potential or actual defects in real estate titles by putting a statute of limitation on possible litigation over ownership and possession. A landowner companyld be secure in title to his land otherwise, long-lost heirs of any former owner, possessor or lien holder of centuries past companyld companye forward with a legal claim on the property. Since independence of our companyntry we have witnessed registered documents of title and more proper, if number perfect, entries of title in the government records. The situation having changed, the statute calls for a change. In Hemaji Waghaji Jat v. Bhikhabhai Khengarbhai Harijan and Others 2009 16 SCC 517 one of us Bhandari, J. , this Court had an occasion to examine the English and American law on adverse possession. The relevant paras of that judgment Paras 24 and 26 to 29 are reproduced as under In a relatively recent case in P.T. Munichikkanna Reddy v. Revamma 2007 6 SCC 59, this Court again had an occasion to deal with the companycept of adverse possession in detail. The Court also examined the legal position in various companyntries particularly in English and American systems. We deem it appropriate to reproduce relevant passages in extenso. The Court dealing with adverse possession in paras 5 and 6 observed as under SCC pp. 66-67 Adverse possession in one sense is based on the theory or presumption that the owner has abandoned the property to the adverse possessor on the acquiescence of the owner to the hostile acts and claims of the person in possession. It follows that sound qualities of a typical adverse possession lie in it being open, companytinuous and hostile. See Downing v. Bird 100 So 2d 57 Fla 1958 , Arkansas Commemorative Commission v. City of Little Rock 227, Ark 1085 303 SW 2d 569 1957 Monnot v. Murphy 207 NY 240 100 NE 742 1913 City of Rock Springs v. Sturm 39 Wyo 494 273 P 908 97 ALR 1 1929 . Efficacy of adverse possession law in most jurisdictions depends on strong limitation statutes by operation of which right to access the companyrt expires through efflux of time. As against rights of the paper-owner, in the companytext of adverse possession, there evolves a set of companypeting rights in favour of the adverse possessor who has, for a long period of time, cared for the land, developed it, as against the owner of the property who has ignored the property. Modern statutes of limitation operate, as a rule, number only to cut off ones right to bring an action for the recovery of property that has been in the adverse possession of another for a specified time, but also to vest the possessor with title. The intention of such statutes is number to punish one who neglects to assert rights, but to protect those who have maintained the possession of property for the time specified by the statute under claim of right or companyour of title. See American Jurisprudence, Vol. 3, 2d, p. 81. It is important to keep in mind while studying the American numberion of adverse possession, especially in the backdrop of limitation statutes, that the intention to dispossess cannot be given a companyplete go-by. Simple application of limitation shall number be enough by itself for the success of an adverse possession claim. A person pleading adverse possession has numberequities in his favour since he is trying to defeat the rights of the true owner. It is for him to clearly plead and establish all facts necessary to establish adverse possession. Though we got this law of adverse possession from the British, it is important to numbere that these days English Courts are taking a very negative view towards the law of adverse possession. The English law was amended and changed substantially to reflect these changes, particularly in light of the view that property is a human right adopted by the European Commission. This Court in Revamma supra observed that to understand the true nature of adverse possession, Fairweather v. St Marylebone Property Co 1962 2 WLR 1020 1962 2 All ER 288 can be companysidered where House of Lords referring to Taylor v. Twinberrow 1930 2 K.B. 16 termed adverse possession as a negative and companysequential right effected only because somebody elses positive right to access the companyrt is barred by operation of law. As against the rights of the paper-owner, in the companytext of adverse possession, there evolves a set of companypeting rights in favour of the adverse possessor who has, for a long period of time, cared for the land, developed it, as against the owner of the property who has ignored the property. The right to property is number companysidered to be number only companystitutional or statutory right but also a human right. Human rights have already been companysidered in realm of individual rights such as right to health, right to livelihood, right to shelter and employment etc. But number human rights are gaining a multi faceted dimension. Right to property is also companysidered very much a part of the new dimension. Therefore, even claim of adverse possession has to be read in that companytext. The changing attitude of the English Courts is quite visible from the judgment of Beaulane Properties Ltd. v. Palmer 2005 3 WLR 554. The Court here tried to read the human rights position in the companytext of adverse possession. But what is companymendable is that the dimension of human rights have widened so much that number property dispute issues are also being raised within the companytours of human rights. With the expanding jurisprudence of the European Courts of Human Rights, the Court has taken an unkind view to the companycept of adverse possession. Paragraphs from 26 to 29 of Hemaji Waghaji Jat supra are set out as under- With the expanding jurisprudence of the European Court of Human Rights, the Court has taken an unkind view to the companycept of adverse possession in the recent judgment of JA Pye Oxford Ltd. v. United Kingdom 2005 49 ERG 90 which companycerned the loss of ownership of land by virtue of adverse possession. In the said case, the applicant companypany was the registered owner of a plot of 23 hectares of agricultural land. The owners of a property adjacent to the land, Mr and Mrs Graham the Grahams occupied the land under a grazing agreement. After a brief exchange of documents in December 1983 a chartered surveyor acting for the applicants wrote to the Grahams numbering that the grazing agreement was about to expire and requiring them to vacate the land. The Grahams companytinued to use the whole of the disputed land for farming without the permission of the applicants from September 1998 till 1999. In 1997, Mr Graham moved the Local Land Registry against the applicant on the ground that he had obtained title by adverse possession. The Grahams challenged the applicant companypanys claims under the Limitation Act, 1980 the 1980 Act which provides that a person cannot bring an action to recover any land after the expiration of 12 years of adverse possession by another. The judgment was pronounced in JA Pye Oxford Ltd. v. Graham 2000 3 WLR 242 2000 Ch 676. The Court held in favour of the Grahams but went on to observe the irony in law of adverse possession. The companyrt observed that the law which provides to oust an owner on the basis of inaction of 12 years is illogical and disproportionate. The effect of such law would seem draconian to the owner and a windfall for the squatter. The companyrt expressed its astonishment on the prevalent law that ousting an owner for number taking action within limitation is illogical. The applicant companypany aggrieved by the said judgment filed an appeal and the Court of Appeal reversed the High Court decision. The Grahams then appealed to the House of Lords, which, allowed their appeal and restored the order of the High Court. The House of Lords in JA Pye Oxford Ltd. v. Graham 2003 1 AC 419 2002 3 WLR 221 2002 3 All ER 865 HL , observed that the Grahams had possession of the land in the ordinary sense of the word, and, therefore, the applicant companypany had been dispossessed of it within the meaning of the Limitation Act of 1980. We deem it proper to reproduce the relevant portion of the judgment in P.T. Munichikkanna Reddy v. Revamma 2007 6 SCC 59 SCC p. 79, paras 51-52 Thereafter the applicants moved the European Commission of Human Rights ECHR alleging that the United Kingdom law on adverse possession, by which they lost land to a neighbour, operated in violation of Article 1 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms the Convention . It was companytended by the applicants that they had been deprived of their land by the operation of the domestic law on adverse possession which is in companytravention with Article 1 of Protocol 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms the Convention , which reads as under Every natural or legal person is entitled to the peaceful enjoyment of his possession. No one shall be deprived of his possession except in the public interest and subject to the companyditions provided for by law and by the general principles of international law. The preceding provisions shall number, however, in any way impair the right of a State to enforce such laws as it deems necessary to companytrol the use of property in accordance with the general interest or to secure the payment of taxes or other companytributions or penalties. This Court in Revamma case also mentioned that the European Council of Human Rights importantly laid down three-pronged test to judge the interference of the Government with the right of peaceful enjoyment of property SCC p. 79, para 53 53. In Beyeler v. Italy GC No. 33202 of 1996 108-14 ECHR 2000-I, it was held that the interference should companyply with the principle of lawfulness and pursue a legitimate aim public interest by means reasonably proportionate to the aim sought to be realised. The Court observed Revamma case 79-80, paras 54-56 54. The question nevertheless remains whether, even having regard to the lack of care and inadvertence on the part of the applicants and their advisers, the deprivation of their title to the registered land and the transfer of beneficial ownership to those in unauthorized possession struck a fair balance with any legitimate public interest served. In these circumstances, the Court companycludes that the application of the provisions of the 1925 and 1980 Acts to deprive the applicant companypanies of their title to the registered land imposed on them an individual and excessive burden and upset the fair balance between the demands of the public interest on the one hand and the applicants right to the peaceful enjoyment of their possessions on the other. There has therefore been a violation of Article 1 of Protocol 1. The question of the application of Article 41 was referred for the Grand Chamber Hearing of the ECHR. This case sets the field of adverse possession and its interface with the right to peaceful enjoyment in all its companyplexity. Therefore it will have to be kept in mind the companyrts around the world are taking an unkind view towards statutes of limitation overriding property rights. In Hemaji Waghaji Jat case, this Court ultimately observed as under Before parting with this case, we deem it appropriate to observe that the law of adverse possession which ousts an owner on the basis of inaction within limitation is irrational, illogical and wholly disproportionate. The law as it exists is extremely harsh for the true owner and a windfall for a dishonest person who had illegally taken possession of the property of the true owner. The law ought number to benefit a person who in a clandestine manner takes possession of the property of the owner in companytravention of law. This in substance would mean that the law gives seal of approval to the illegal action or activities of a rank trespasser or who had wrongfully taken possession of the property of the true owner. We fail to companyprehend why the law should place premium on dishonesty by legitimising possession of a rank trespasser and companypelling the owner to lose his possession only because of his inaction in taking back the possession within limitation. Fifth Amendment of the U.S. Constitution - a principle of a civilized society Another important development in the protection of property rights was the Fifth Amendment. James Madison was the drafter and key supporter for the Fifth Amendment. The Fifth Amendment states number shall private property be taken for public use, without just companypensation. The main issue is to pay just companypensation for acquiring the property. There are primarily two situations when a landowner may obtain companypensation for land officially transferred to or depreciated by the government. First, an owner may be entitled to companypensation when a governmental entity intentionally acquires private property through a formal companydemnation proceeding and without the owners companysent. The States power to take property is companysidered inherent through its eminent domain powers as a sovereign. Through the companydemnation proceedings, the government obtains the necessary interest in the land, and the Fifth Amendment requires that the property owner be companypensated for this loss. The second situation requiring companypensation under Fifth Amendment occurs when the government has number officially acquired private property through a formal companydemnation proceeding, but numberetheless takes property by physically invading or appropriating it. Under this scenario, the property owner, at the point in which a taking has occurred, has the option of filing a claim against the government actor to recover just companypensation for the loss. When the landowner sues the government seeking companypensation for a taking, it is companysidered an inverse companydemnation proceeding, because the landowner and number the government is bringing the cause of action. We inherited this law of adverse possession from the British. The Parliament may companysider abolishing the law of adverse possession or at least amending and making substantial changes in law in the larger public interest. The Government instrumentalities - including the police - in the instant case have attempted to possess land adversely. This, in our opinion, a testament to the absurdity of the law and a black mark upon the justice systems legitimacy. The Government should protect the property of a citizen - number steal it. And yet, as the law currently stands, they may do just that. If this law is to be retained, according to the wisdom of the Parliament, then at least the law must require those who adversely possess land to companypensate title owners according to the prevalent market rate of the land or property in question. This alternative would provide some semblance of justice to those who have done numberhing other than sitting on their rights for the statutory period, while allowing the adverse possessor to remain on property. While it may be indefensible to require all adverse possessors - some of whom may be poor - to pay market rates for the land they possess, perhaps some lesser amount would be realistic in most of the cases. The Parliament may either fix a set range of rates or to leave it to the judiciary with the option of choosing from within a set range of rates so as to tailor the companypensation to the equities of a given case. The Parliament must seriously companysider at least to abolish bad faith adverse possession, i.e., adverse possession achieved through intentional trespassing. Actually believing it to be their own companyld receive title through adverse possession sends a wrong signal to the society at large. Such a change would ensure that only those who had established attachments to the land through honest means would be entitled to legal relief. In case, the Parliament decides to retain the law of adverse possession, the Parliament might simply require adverse possession claimants to possess the property in question for a period of 30 to 50 years, rather than a mere Such an extension would help to ensure that successful claimants have lived on the land for generations, and are therefore less likely to be individually culpable for the trespass although their forebears might . A longer statutory period would also decrease the frequency of adverse possession suits and ensure that only those claimants most intimately companynected with the land acquire it, while only the most passive and unprotective owners lose title. Reverting to the facts of this case, if the Police department of the State with all its might is bent upon taking possession of any land or building in a clandestine manner, then, perhaps numberone would be able to effectively prevent them. It is our bounden duty and obligation to ascertain the intention of the Parliament while interpreting the law. Law and Justice, more often than number, happily companyncide only rarely we find serious companyflict. The archaic law of adverse possession is one such. A serious re-look is absolutely imperative in the larger interest of the people. Adverse possession allows a trespasser - a person guilty of a tort, or even a crime, in the eyes of law - to gain legal title to land which he has illegally possessed for 12 years. How 12 years of illegality can suddenly be companyverted to legal title is, logically and morally speaking, baffling. This outmoded law essentially asks the judiciary to place its stamp of approval upon companyduct that the ordinary Indian citizen would find reprehensible. The doctrine of adverse possession has troubled a great many legal minds. We are clearly of the opinion that time has companye for change. If the protectors of law become the grabbers of the property land and building , then, people will be left with numberprotection and there would be a total anarchy in the entire companyntry. It is indeed a very disturbing and dangerous trend. In our companysidered view, it must be arrested without further loss of time in the larger public interest. No Government Department, Public Undertaking, and much less the Police Department should be permitted to perfect the title of the land or building by invoking the provisions of adverse possession and grab the property of its own citizens in the manner that has been done in this case. In our companysidered view, there is an urgent need for a fresh look of the entire law on adverse possession. We recommend the Union of India to immediately companysider and seriously deliberate either abolition of the law of adverse possession and in the alternate to make suitable amendments in the law of adverse possession.

LORD JUSTICE PITCHFORD: The appellant, Anthony Jones, who is now aged 23 years, was on 25 October 2011 found at Blackfriars Crown Court to be in contempt of court, and he was sentenced to 7 days' imprisonment. He appeals against his conviction and sentence as of right. An application for bail pending this appeal was made to Irwin J, who concluded that the appellant did not have an arguable appeal. He refused bail and the sentence has been served. The trial was taking place, in court number 1, of members of a gang said by the prosecution to be the "Thugs of Stonebridge". The appellant's sister was one of the defendants. They were charged in an indictment alleging attempted murder. Eventually, two of the defendants were convicted of that count. The appellant's sister was convicted of possession of a firearm with intent to cause fear of violence, and of attempting to pervert the course of justice. The trial was attended by difficult security and management considerations. A young man, who was unarmed, had been shot in the back with a sawn-off shotgun at close range at about 2 pm while at a tube station. He was at that time flanked by two innocent members of the public. Witnesses were giving evidence anonymously and behind screens. Armed police officers were in the vicinity and two uniformed officers were present in court during the trial. Knife searches were made upon those who were attending the public gallery. Tensions were high during the trial. One of the problems was that, by leaning out of the public gallery, members of the public, who included the appellant, could if they wished obtain a sightline to the witness. The judge was most anxious to prevent such an activity occurring. He required absolute obedience to his instructions at moments during the trial, so as to ensure that nothing untoward should interrupt the proper progress of the trial. The mother of one of the defendants had already been excluded for disobedience to the judge's directions, and we are informed by Miss Jarratt, who appears on behalf of the appellant, that a second person had also been excluded from the public gallery. The evidence was that not only was the appellant the brother of one of the accused, he was also an associate of other defendants. During the proceedings on the morning of 25 October, HHJ Marron released the jury for a break and they left court. When they had departed, the appellant, who had been attending for some 14 days and therefore well knew of the judge's instructions, began a loud conversation with someone in court below the public gallery. We take up the judge's findings from the transcript of proceedings which took place at 4.09 pm the same day: "I issued warnings from the beginning of this case and repeated them about the need for absolutely perfect conduct and no communication between the public gallery and the dock. [The appellant] was standing in the back of the public gallery, talking loudly and laughing to a member of the defence team; I do not know who. The court was still in session. I asked him not to do that. I asked him to please leave the court. That was said on three occasions. I said 'Don't come back'. He simply looked at me, putting on his coat, and was laughing at me." On the judge's instructions, the appellant was arrested and placed in the cells. The judge did not take precipitate action. He arranged for representation of the appellant and allowed time for reflection. This was, nevertheless, in the nature of a summary proceeding, since the contempt, if that is what it was, was made in the face of the court. The judge had the appellant brought up later in the day. The judge related to counsel representing the appellant, Miss Jarratt, the facts on which he proposed to act and to which we have just referred. Miss Jarratt said in response: "I was able to pick up various pieces from speaking to others and to take instructions from himself. He would first like to say he is extremely sorry for the way that it was perceived that he had behaved. He said he was standing up to stretch, effectively. He attends here as his sister is one of the defendants. He forgot where he was essentially momentarily, having attended every day for two weeks. He said he was tired at the prospect of having to stand up again and being told to go in and out while witnesses were dealt with and simply forgot himself. "He is extremely sorry and understands the seriousness of it, having been sent immediately downstairs and now spent a considerable amount of the afternoon in the cells and missed out what was to be heard in a trial that he otherwise says that he has been here trying to pay close attention to. He is extremely concerned about what may happen to his sister and the outcome of these matters. He did not wish to show you any disrespect." It will be noted that omitted from Miss Jarratt's apology on the appellant's behalf was any acknowledgement that the appellant had been talking loudly to a member of the defence team and had laughed when admonished by the judge. It follows that the appellant was putting forward an apology but in terms which suggested that the judge may have misinterpreted his conduct. It is now submitted that the judge was wrong to find the appellant in contempt, since there was no contemptuous behaviour and the judge did not enquire into the circumstances, in breach of the fundamental rule of fairness. In our view, these arguments are without substance. The judge addressed his remarks to the appellant on three occasions. He saw for himself the appellant's contemptuous reaction. No further enquiry was required or indeed was appropriate. This was a contempt in the face of the court. The appellant, while apologising, did so in a manner which failed to recognise the seriousness of the contempt. We are well aware, as no doubt was Judge Marron, of the advice given by this court to judges faced with misbehaviour in court, most recently exemplified by Moses LJ in R v Huggins [2007] EWCA Crim 732, [2007] 2 Cr App R 8. In the present case, this was not a release of emotion upon, for example, the return of a verdict; it was a deliberate breach of the judge's order made for the proper management of the trial. It took place in a context in which the exigencies of the trial process required exceptional security measures. The appellant's response to the judge's request to desist was plainly contemptuous as that word is in ordinary use, and was not a technical breach of the requirement for good order in court. Public confidence in, and respect for, criminal proceedings demands appropriate behaviour from all participants and observers. It matters not that the jury was absent from court. If members of the public choose to disrupt court proceedings in defiance of the judge's express instructions, they must expect appropriate action to be taken. In our view, a detention for a period of 7 days was an appropriate reaction and the appeal is dismissed. Thank you very much for your help, Miss Jarratt, particularly for your presentation of the authorities. MISS JARRATT: I am grateful. My Lord, might I request a representation order to be granted? LORD JUSTICE PITCHFORD: With gritted teeth, but yes, you may have a representation order. MISS JARRATT: I am grateful, thank you.

MR JUSTICE CRANSTON: Introduction This case constitutes a challenge to one of the devices used to measure the level of alcohol in the breath of drivers. The device involved is a Lion Intoximeter 6000 UK, with software version 2.34, connected with the LIBIS computer system. That connection is for the purposes of keying in the details of the person being breathalysed and receiving the results from the intoxilyser. The claimant contends that the device does not have the requisite type approval. His claim is by way of judicial review of the refusal of the District Judge to state a case for consideration by this court. Permission to apply for judicial review was granted by Laws LJ and McCombe J late last year. Background The claimant is a retired teacher but now does work as a freelance photographer. On 17 November 2008 he was convicted in the Manchester City Magistrates' Court of driving a motor vehicle in late June of that year when his alcohol level was 85 micrograms in 100 millilitres of breath. That exceeds the legal limit, and is an offence under section 5(1)A of the Road Traffic Act 1988. He was fined and ordered to pay costs, in total £530 and was disqualified from driving for three years. At the trial, before District Judge Berg, the prosecution called one witness, Police Constable Oldham, the intoxilyser officer, who gave evidence in relation to the procedure and the results. The officer explained the function of the LIBIS device and confirmed the device had nothing to do with the Lion Intoxilyser device: "Only the results of that machine are transferred back." She confirmed that the LIBIS device produced the relevant printout of the results. She had no technical knowledge. Dr Mundy gave evidence for the claimant. He is an independent forensic scientist who was at one point in charge of the alcohol laboratory of the Metropolitan Police Forensic Science Laboratory. As a public official he was also involved in the approval and utilisation of earlier types of intoximeters. In a written report Dr Mundy explained that the objective of approval is to ensure that the device operates to the highest standard. Once an instrument has passed certain trials, approval is given. The Lion Intoxilyser 6000 UK with 2.33 software was approved initially. Subsequently, a Welsh version was approved with software 2.34. In his report Dr Mundy set out how modifications are dealt with when notified to the Home Office. Apart from trivial changes, for example a change in the colour of the instrument, the modification may require further testing. The request is then passed to the Forensic Science Laboratory for assessment. The modification might be tested at the laboratory or at one or more of the other agencies. The report is then sent to the Home Office, which issues a letter of agreement or rejection. If the modification is major a full testing regime will have to be used and a new approval will have to be issued. The only time that occurred was following the upgrade of the Lion Intoxilyser 6000 UK version 2.33 to the Welsh language version 2.34. Dr Mundy's report continued that Lion requested that Assessment Services test the combination of the Lion Intoxilyser UK and LIBIS to check for interference. That agency is one of those involved in the approval of instruments. Those tests were carried out in the first half 1997 on a Intoxilyser 6000 UK, with software 2.33 build 15. Assessment Services concluded that there was no interference with the Intoxilyser UK by LIBIS. In the conclusion to his written report Dr Mundy explained that the LIBIS system disconnected the intoxilyser's keyboard and substituted its own for the starting of the test and the input of personal details. At that point the intoxilyser took over and performed the test cycle. When completed the results were sent to the LIBIS computer. There were many other functions of the intoxilyser and there was no information about whether these could be accessed through the LIBIS computer. However it was clear, in his opinion, that the intoxilyser was in a different computer mode when connected to LIBIS. In his opinion, LIBIS should be tested with the latest version of the Intoxilyser 6000 UK version, ie 2.34, as changes might alter the reaction of LIBIS to the instrument. He did not know whether such tests had been performed. He had never seen the type approval citing LIBIS, and in fact did not believe that there was such an approval. Before District Judge Berg, Dr Mundy gave oral evidence in accordance with his written report. He stated that in his opinion the connection of the LIBIS device to the intoxilyser took the latter device out of the type approval order. It followed that in the absence of the testing of the LIBIS device, its attachment to the intoxilyser "might or might not" effect the reading produced as a result of the specimen of breath given. On the basis of Dr Mundy's evidence the claimant submitted that the intoxilyser could not be said to give a reliable reading. Because of the connection with the LIBIS device, type approval should exist because the device itself was altered. It was therefore outside the scope of the type approval given. There will be no conviction on the basis of any reading it gave. As I have indicated the District Judge convicted the claimant. On 11 December 2008 the District Judge set out his conclusions through a letter from his legal adviser. That stated that the District Judge had found as a matter of fact that he did not believe that the issue of type approval had been sufficiently raised by the defence. The evidence put forward by them to suggest that the device had been altered so significantly as to take it outside the scope of type approval was to a large extent based upon speculation. Therefore he rejected it. That finding was said to be based upon Dr Mundy's opinion that changes might have altered the reaction of the LIBIS to the instrument. In his letter the District Judge said: "In the light of their being no direct evidence that the Lion Intoxilyser 6000 was altered so significantly as a result of the LIBIS connection, and bearing in mind Dr Mundy's "speculation" on this point referred to above, the judge found as a matter of fact that the device had not been taken outside of the scope of the type approval, and was an approved device." In his acknowledgment of service to the claim the District Judge explains that he rejected the claimant's submission. He enunciates the following reasons: first, there was a presumption that the intoxilyser device was reliable and he could only concern himself with the device in question. He did not consider that the presumption had been challenged by any relevant evidence. He had heard no evidence that the connection of the LIBIS device did effect the function of the Lion Intoxilyser UK 6000 device. The challenge by the claimant was based, inter alia, upon Dr Mundy's report, which seemed to have used on other occasions. Dr Mundy's oral evidence simply confirmed the contents of his report, but his conclusion was that the connection to the LIBIS device might or might not effect the results produced: "In the circumstances and in the light of the evidence given, I concluded it was pure speculation that the intoxilyser device was unreliable and had been altered in such a way and to such an extent that it was taken outside the scope of its type approval." District Judge Berg was then asked to state a case for the opinion of this court with two questions: first, was he right to hold that the evidence of Dr Mundy was pure speculation, and secondly on the evidence of the case was he entitled to hold that the device was an approved device. In the circumstances, the District Judge held that he was entitled to refuse to state a case, since he considered that the application was frivolous, being both futile and misconceived. He considered that his decision was Wednesbury reasonable having regard to the evidence given. In his view any challenge that the LIBIS device should have been type approved by the Secretary of State was beyond his jurisdiction and a matter for the Secretary of State. The Law The Road Traffic Act 1988 creates offences of causing death by careless driving when under the influence of drink or drugs; driving or being in charge of a mechanically propelled vehicle whilst under the influence of drink or drugs; and driving or being in charge of a motor vehicle with alcohol concentration above the prescribed limit: sections 3A, 4 and 5. In the course of an investigation as to whether a person has committed one of these offences section 7(1)(a) empowers a police officer to require the person to provide two specimens of breath for analysis by means of "a device of a type approved by the Secretary of State." A requirement under the section to provide specimens of breath can be made, inter alia, at a police station: section 7(2)(a). Thus, section 7(1)(a) refers to devices of a type approved by the Secretary of State. For these purposes, in June 2005 a junior minister, acting on behalf of the Secretary of State, made The Breath Analysis Devices Approval Order 2005. That approved, as from 1 July 2005, as a means by which specimens of breath may be provided at a police station in accordance with section 7(2)(a) for analysis under section 7(1)(a), each of the types of device set out in the schedule. Three devices are named in the schedule. The third device is identified as follows: "The device known as the Lion Intoxilyser 6000 UK, manufactured by Lion Laboratories Limited composed of the Lion Intoxilyser 6000 UK, the Lion Intoxilyser UK gas delivery system type A, B or C, and software version 2.33 or 2.34." At least four recent authorities have addressed the issue of type approval. The first in time is Brown v Procurator Fiscal of Falkirk [2003] RTR 17, a decision of the High Court of Justiciary. There the schedule to The Breath Analysis for Scotland Approval 1998 for the purposes of section 7(1)(a) of the Road Traffic Act referred to "the device known as the Intoximeter EC/IR manufactured by Intoximeters Inc, of St Louis, Missouri, United States of America, composed of the Intoximeter EC/IR, the Intoximeter EC/IR gas delivery system by BOC limited the software version EC/IR UK 5.23." The Sheriff held that the device conformed to type approval in terms of the manufacture, although it had not been manufactured by Intoximeters Inc of St Louis. Giving the judgment of Lord Hamilton, Lord Morison and himself, Lord Cameron of Lochbroom held that the Sheriff correctly determined that whether or not the particular device was approved did not turn on the identity of the manufacturer. In the course of his judgment in Director or Public Prosecutions v Richardson [2003] EWHC 359 Stanley Burnton J considered the issue of type approval of a breath analysis device, in fact the same type of device as before the High Court of Judiciary. He said that a device may not be an approved device because it never complied with the description of the device contained in the approval order. Alterations may have been made to it during the course of time as to take it out of the description in the schedule to the order: paragraph 8. It would seem that a device which did not include the intoximeter EC/IR gas delivery system, by way of example, or a software version which was not a UK 5.23, but some significantly different version, would not be an approved device: paragraph 9. "It does not follow that from every modification to an Intoximeter takes it out of approval, far from it. The alteration must be such in my judgment that the description in the schedule of the order no longer applies to it." Later in his judgment Stanley Burnton J said that if the only contention was that the modifications to the Intoximeter device had been such that it was no longer in the same condition as it had been when the Secretary of State's approval was given that could not amount to the defence. It had to be shown that the modifications were such that it was no longer an approved device: paragraph 13. In Fearnley v the Director of Public Prosecutions [2005] EWHC 1393 (Admin), the device at issue was again an intoximeter EC/IR. There were a variety of challenges to the device. In the course of his judgment in this court, Field J said that while the defence statement purported to put the prosecution specifically to proof that the software was UK 5.23, that did not mean that the prosecution has specifically to prove this matter. That was because of the general presumption which flowed from the fact that the machine was of a type that had been approved, this being a presumption which was plainly consistent with Article 6 ECHR. Thus it was for the appellant to adduce some evidence that the software was otherwise than the specified software. At no stage did the appellant adduce such evidence and therefore he could have no substantial complaint that the prosecution were allowed to provide specific proof of the software through the engineer's report: paragraph 34. The last of the authorities is Breckon v Director of Public Prosecutions [2007] EWHC 2013 (Admin); [2005] RTR 8. Again, an intoximeter EC/IR device was at the centre of the argument. Reliance was placed on the fact that the guide to type approval relating to the device provided that the gas delivery system should comprise an automatic change over valve, whereas the device in question had a manual change over valve. Giving the first judgment of the court Nelson J said there was no reference in the schedule to the approval to the guide, and he could not see no reason that it had been incorporated within the approval. The definition of the device stood by itself in the schedule of the approval and did not admit a further identification or specification, paragraph 29. At paragraph 31 Nelson J said: "[If] for example the Intoximeter EC/IR had no gas delivery system or had significantly different software version it would not be an approved device under the Schedule of the Approval. But there must be room to make sensible modifications without having to seek a new approval every time this is done. The test must be whether the description in the schedule still properly applies. If it does not, then the device is no longer an approved device; but if the description does still properly apply to the device it will remain an approved device even though modifications or alterations have been made. Thus the removal of one cylinder, which did not affect the operation of the device, did not take it out of the Approval. Nor in my judgment, would the supply of a device with a manual change-over valve, rather than an automatic change-over valve when the machine had two cylinders, render it no longer an approved device. It remained an Intoximeter EC/IR with a gas deliver system." Sedley LJ agreed. Building on these authorities, my view is that type approval is concerned with description. The issue is whether a device meets the description set out in the schedule. That is a separate issue from reliability or quality. Description means the essence or identity of the device. That is a broad common sense test. It will turn very much on the build and function of a device and the circumstances in which type approval is given. The issue then arises whether collateral attributes of the device go to its description affecting, in other words, its essence or identity so that the device can no longer be regarded as of that description. Even if a specific manufacturer is part of a type approval, that may not be part of its description because it is not part of its essence or identity. Similarly, with the modification of the device the issue is whether the modification is such that the device no longer matches the description in the type approval. That demands a common sense judgment as to whether the build and function of the device is such that it still has, in fact, the essence or identity of the device specified in the type approval. The claimant's case On behalf of the claimant Miss Calder in her written submissions and before us today contends that the decision of the District Judge not to state a case for the opinion of this court was flawed. Before the District Judge, Dr Mundy had given evidence that the connection of the Intoxilyser 6000 UK 2.34 to the LIBIS computer was a fundamental change of the system, which had not been tested or approved. The Intoxilyser 6000 UK 2.34 had another computer attached to it. That was not a mere formality. The readings obtained from an unapproved device might be unreliable. The prosecution had called no evidence to refute the evidence of Dr Mundy, or to show that the Intoxilyser with the LIBIS device attached was of a type approved by the Secretary of State. Indeed, the prosecution did not address the court about that matter. The device involved was a Lion 6000 UK 2.34 linked by cable to another computer, LIBIS, which assumed some of the latter's functions. Dr Mundy's evidence was that the LIBIS disconnected the Intoxilyser keyboard and took over the input of data and then produced the printout. In Miss Calder's submission Dr Mundy was a reputed expert who was involved in the process of type approval of these devices. The issue was not one of reliability, although in her contention the District Judge confused the reliability and approval. The District Judge was not in a position to come to any conclusion that the device had not been altered in such a way or to such an extent that it was taken out of its type approval. The device was either approved or it was not. Linking the Lion Intoxilyser to another computer must be a significant alteration. It was a matter of common sense, in Miss Calder's submission, that the approval order, which specified the device and its software, did not authorise the use of additional software of the LIBIS computer. For approval one had to show that the device did not conform to the schedule. In this case, it was self evident. The District Judge misdirected himself through his focus on reliability. It was agreed and accepted by him that the LIBIS computer was attached to the Lion Intoxilyser on this occasion. In her submission that took it outside the approval order. Conclusion. In my view the the issue for the District Judge was whether this Lion Intoxilyser 6000 UK 2.34 with the LIBIS connection was a device to which the description in the 2005 type approval order applied. As I explained earlier, in my view a description of a device relates to the essence or identity of that device. Whether this device met that description demanded a broad, common sense judgment by the District Judge. As set out in his letter of 11 September, he found as a matter of fact that there was no direct evidence that the Lion Intoxilyser 6000 UK was altered so significantly as a result of the LIBIS connection to take it outside its description. Bearing in mind Dr Mundy's speculation on this point, the District Judge says in his 11 December letter that he found as matter of fact that the device had not been taken outside the scope of type approval and was still an approved device. In his acknowledgment of service the judge, on a number of occasions, dealt with the issue of reliability, and Dr Mundy's evidence on this. However, he also addressed in his acknowledgment of service, and addressed squarely, the issue of type approval. He found that there was no change of function as a result of the LIBIS connection and that the device still met the description in the type approval order. The District Judge's remarks that any challenge to the type approval of the LIBIS device was a matter beyond his jurisdiction and for the Secretary of State. This must be seen in context, namely, that there had been no evidence to suggest that the difference between the LIBIS interaction with version 2.33 and its interaction with 2.34 was sufficient to take the device outside type approval. The District Judge was entitled to conclude that Dr Mundy had not given evidence that the use of LIBIS with the Lion Intoxilyser 6000 UK and software version 2.34 was use of a device which was not of an approved type. The District Judge refers in his acknowledgment of service to the presumption as to reliability. That must be seen in the context of his coupling of that presumption of reliability with the presumption of approval. In my view it is clear from the December 11 letter, and from the acknowledgment of service as a whole, that the District Judge was referring to both. In my view, the District Judge applied the correct test in law. He concluded that the claimant had not raised any evidence that the device was not of an approved type. That meant that the appellant had not discharged the evidential burden. In my view, the District Judge having found that there was no evidence that the device fell outside type approval, an application to state a case on that premise would have been, indeed, frivolous. I refuse this application for judicial review. LORD JUSTICE LEVESON: I agree. MISS CALDER: Could I mention one thing, my Lord, and that was there was an ancillary matter in the claim form because the District Judge, sometime after the hearing, disallowed Dr Mundy's claim for expenses. I made a mistake in my skeleton argument initially when I referred to the law on that. It is a Prosecution of Offences Act 1985 Section 19(3) gives the Lord Chancellor power to make regulations authorising the repayment out of central funds of witness expenses, and it is also regulation 19(3) of the Costs in Criminal Cases General Regulations 1986. It then goes on to say expenses properly incurred by a witness are to be allowed out of central funds unless the court otherwise directs. This applies whatever the outcome of the proceedings are. In this case Dr Mundy did not claim for his report, which the District Judge referred to in his reasons, but he did claim, and you have that at the end of the bundle, for the expenses going to Manchester. In my submission, his claims were in fact quite modest. They are in the bundle. MR JUSTICE CRANSTON: Page 43. MISS CALDER: Thank you. I notice my learned friend did actually comment upon this, but normally-- LORD JUSTICE LEVESON: It is not terribly surprising, because it is not actually part of the judicial review. It is said to be an ancillary application, but it is not, an ancillary application is rather lining the application which you made before the Deputy Judge to lift the disqualification. This is a separate issue, is it not? Was the judge Wednesbury unreasonable to refuse to allow costs out of central funds, is that not the point? MISS CALDER: Well it has been raised. Would your Lordship then give me leave to amend the grounds to include that as a ground? LORD JUSTICE LEVESON: Let me just see. MISS CALDER: It is whether the case is one or lost the witness is entitled to expenses. Dr Mundy has never had any refused before, in fact no witnesses I have come across has ever had any refused. The District Judge did not say at the time. He only said after we had applied for judicial review that he was not allowing the expenses. In view of the fact your Lordship has referred throughout to Dr Mundy's evidence how could he say it was not relevant? LORD JUSTICE LEVESON: What you would have to do is challenge page 44. MISS CALDER: Could I amend the grounds to include that? LORD JUSTICE LEVESON: I just do not know. It is actually not just in this case, it is in another case as well. MISS CALDER: It is in another case? LORD JUSTICE LEVESON: So it appears from page 44. Invoicing cases of. MISS CALDER: I have never come across another case, and Dr Mundy has not had one. Both cases, a Michelle Crane, they were the two cases heard on this occasion, that is why there are two. LORD JUSTICE LEVESON: Same day, I see. MISS CALDER: They appeared together. LORD JUSTICE LEVESON: I did not know that. It is not a matter of course for the interested party. He is not interested in that at all, presumably. MR BIGGS: Unless I can be of assistance. LORD JUSTICE LEVESON: All right, we will rise a moment. A Short Adjournment. LORD JUSTICE LEVESON: In section 7 of the claim form for judicial review which seeks an order that the District Judge state a case, the claimant also seeks to make application for an order that the defendant court to pay out of central funds the witness expenses of Dr John Mundy for his attendance at the trial. That application was not developed and is entirely freestanding to the application with which the court has just dealt. In the statement supporting the application the claimant's solicitors merely assert that the District Judge was in error when responding to a letter to the effect that he exercised his discretion to decline to award the sums from central funds and had wrongly interpreted the legislation. Save for that observation there is no other elaboration of that ground; indeed, the solicitor goes on to identify only one ground on which the court is entitled to refuse to state a case and seeks to apply for judicial review for an order directing Manchester Magistrates' Court to state a case for the opinion of this court. Nobody has sought elaboration from the District Judge or required him to acknowledge an application by way of judicial review of his decision in relation to costs. It is now too late so to do, and we decline to grant relief in relation to this application. MR BIGGS: My Lord, my application is for the Crown Prosecution Service costs for preparation and attendance at this hearing. LORD JUSTICE LEVESON: Has a schedule been served? MR BIGGS: A schedule has not been served. LORD JUSTICE LEVESON: Yes? MISS CALDER: I would like to oppose the application. We have not had a schedule, of which I think there are the rules of the court that it has to be served before hand. The claimant has subsequently lost his employment and is somebody of not very great means to be able to pay extra costs. LORD JUSTICE LEVESON: Is he in receipt of legal aid? MISS CALDER: We are not -- LORD JUSTICE LEVESON: Publically funded? MISS CALDER: No. He has lost the job since we had the case going. LORD JUSTICE LEVESON: He did not seek legal aid? MISS CALDER: Not at that stage. The thing is my instructing solicitor does not do legal aid so he would have had to go elsewhere. LORD JUSTICE LEVESON: I see. All right, did you have some other application? MISS CALDER: Yes. My Lord, although I have not got any question formulated at the moment, if in the next week I formulated a case, I would like to ask for a certificate to go to the Supreme Court. If the question was suitable would your Lordship consider it? LORD JUSTICE LEVESON: We could think about the drafting later Miss Calder. What is the thrust of the question? MISS CALDER: The thrust of the question would be on type approval. Whether the burden that is on the prosecution to prove it was type approved, the issue having been raised. I would have want to think about it. LORD JUSTICE LEVESON: Well, obviously how it is drafted could be considered. What is the position about the fact there is no schedule Mr Biggs? MR BIGGS: The position is this: until it became clear it was potentially more than just the judicial review of the refusal to state a case, it might go in to judicial review of the full decision, or the stated case itself, the Crown Prosecution Service did not instruct anybody and wrote saying we are the interested party, and if it is only being sent back to the District Judge we have no submissions. When it became clear following the most recent hearing that was not the case I was instructed this week. A schedule has not been put together, but the costs are, I can say, £1005, which covers the preparation, my attendance today, and three hours work on the case. I apologise there is no schedule. LORD JUSTICE LEVESON: Miss Calder, what do you say about that? MISS CALDER: I did not hear the amount. LORD JUSTICE LEVESON: The amount was £1,000. MISS CALDER: I know the claimant has been paying periodically to the solicitors, and as I say, he has difficulties. We made the an application for judicial review of the conviction on the basis that we were really invited to, to some extent, by the order of His Honour Judge Thornton when he looked at the application. LORD JUSTICE LEVESON: Yes. MISS CALDER: He said we should consider doing that, and as as a result of that, otherwise we would not have done. LORD JUSTICE LEVESON: All right. We will just rise a moment. A short adjournment. LORD JUSTICE LEVESON: We understand why the application for costs is made, but in the light of the circumstances and in light of the encouragement of the circuit judge, we make no order for costs. MISS CALDER: I am obliged. LORD JUSTICE LEVESON: Miss Calder, in relation to the certificate we presently cannot conceive of a question that would generate sufficient public importance to justify a certificate. If in the next week you would like to formulate one, you can provide it to us in writing, and we will respond in writing. MISS CALDER: Yes, thank you. LORD JUSTICE LEVESON: Thank you very much.

criminal appellate jurisdiction criminal appeal number 45 of 1970. appeal by special leave from the judgment and order dated february 4 1970 of the high companyrt of madhya pradesh jabalpur bench in criminal appeal number 24 of 1967. hardayal hardy m. s. n. nambudri and b. r. g k. achar for the appellant. ram paniwani and h. s. parihar for the respondent. the judgment of the companyrt was delivered by khanna j. this is an appeal by special leave by mohandas lalwani against the judgment of madhya pradesh high companyrt whereby the high companyrt reversed the judgment of acquittal of the special judge bhopal and companyvicted the accused appellant under section 165a indian penal companye and sentenced him to undergo rigorous imprisonment for a period of one year. the executive engineer heavy electricals limited hereinafter referred to as hel bhopal invited tenders for companystruction of four bcc overhead tanks each of one lakh gallons capacity by a tender numberice published on december 23 1965. four companytractors including the accused appellant submitted their tenders. those tenders were opened on february 1 1966. it was found that the tender of the appellant who had stipulated that he would use 18 tons of steel was of the lowest amount. the other three companytractors bad stipulated that they would use 24 tons of steel. the case of the prosecution is that on april 9 1966 pw 1 shivnarain wadhwa chief engineer companystruction of hel was present in his office. pw 5 niranjanlal shrivastava personal assistant to the chief engineer was also present there. a partition divides the office of the chief engineer from the place where shrivastava used to sit. at about 11.45 a.m. on that day the appellant accompanied by two others came to pw shrivastava. the appellant gave visiting card p4 to shrivastava and said that he wanted to see the chief engineer. shrivastava sent that card through a peon to chief engineer wadhwa. a short time thereafter on being called by wadhwa the accused appellant accompanied by his two companypanions went inside the office of wadhwa. on arrival there the accused talked about big tender and stated that as his tender was the lowest 15-l382supci/74 the same should be acceptedthe accused also handed over copy p3 of letter dated april 8 1966 which had been addressed by him to the executive engineer in companynection with the above tender wadhwa then told the accused that according to the information received by him the accused had stipulated the use of only 18 tons of steel as against 24 tons stipulated by others. the accuse however persisted in saying that his tender was the lowest. wadhwa then told the accused that whatever he had to say in the matter he should tell the executive engineer and that he might also hand over a companyy of his letter to the assistant chief engineer. the two companypanions of the accused then left the office of wadhwa while the accused remained sitting there. wadhwa then told the accused also to go but the accused instead of going took out from the left pocket of his trousers an envelope and presented it to wadhwa. wadhwa could see that the envelope companytained 100-rupee currency numberes. wadhwa reprimanded the accused for doing something wrong and at the same time he wadhwa pressed the buzzer for his personal assistant. shrivastava pw then came inside the office of wadhwa. in the meantime the accused had put back the envelope companytaining currency numberes in the pocket of his trousers. on the arrival of shrivastava wadhwa told him that the accused had given him bribe. wadhwa also asked shrivastava to take out the envelope from the pocket of the trousers of the accused. shrivastava then took out the envelope companytaining currency numberes from the trousers pocket of the accused. there were thirty 100-rupee currency numberes in that envelope. wadhwa then rung up r.c. gupta pw 3 who is the secretary and vigilance officer of hel as well as chandra shekhar tiwari pw 4 who is the chief security officer of hel. the offices of gupta and tiwari are also in the administrative building of hel in which building is situated the office of wadhwa pw. the case of the prosecution further is that on the arrival of gupta and tiwari pws wadhwa narrated the facts about the offer of rs. 3000 by the accused to him as mentioned above. the accused then expressed his apologies and stated that he was sorry and ashamed for what he had done. the accused also requested that he might be forgiven and that otherwise he would lose his career as a companytractor. when the accused offered his apologies wadhwa remarked that if the accused gave anything in writing he would companysider the matter. the accused thereupon wrote something on a piece of paper. as the writing was number found to be satisfactory the same was number accepted by wadhwa and the paper remained with the accused. wadhwa then asked shrivastava to take lalwani to his room. wadhwa thereafter asked for the advice of gupta and tiwari. it was then decided that the matter should be reported to the police. wadhwa thereupon called shrivastava and dictated to him report p1. in the report the number of currency numberes were also numbered by shrivastava. the report was then signed by wadhwa. the accused and the report were thereafter sent to police station govindpura. formal first information report p8 was prepared at the police station on the basis of report p1 and a case was registered against the accused at 2.15 p.m. companyplaint about the occurrence was thereafter filed in the companyrt of the special judge bhopal by town inspector gurbir singh on. may 201966. at the trial wadhwa pw 1 gave evidence in support of the prosecution case as given above. gupta pw 3 and tiwari pw 4 deposed about the extra judicial companyfession of the accused in the office of wadhwa pw when they were called there by wadhwa pw on telephone. the prosecution further examined shrivastava pw 5 according to whom he was called by wadhwa and was told that the accused had offered him bribe. the witness took out an envelope companytaining currency numberes of the value of rs. 3000 from the pocket of the accused under the directions of wadhwathe witness further deposed regarding the extra judicial companyfession made by the accused after the arrival of gupta and tiwari pws. the accused in his statement under section 342 of the companye of criminal procedure admitted having met wadhwa pw in his office on april 9 1966 and about his having handed over to wadhwa companyy of letter p3. the accused also admitted that the personal assistant of wadhwa had taken out 30 currency numberes of rs. 100 each from his pocket under the directions of wadhwa. the fact that gupta and tiwari were called on telephone by wadhwa was further admitted by the accused. the other prosecution allegations were denied by the accused. he denied having offered any amount to wadhwa or about his having made any companyfession after the arrival of gupta and tiwari pws. the accused further gave the following version of the occurrence on 7-4-66 1 had gone to the office of the executive engineer shri karajgi. he was number there. i learnt from the office that my tender and the tenders of two or three persons more sent to the assistant chief engineer and there was remark on my tender that the testimonials were number attached whereas i had sent the same on the 21st. therefore i went to the chief engineer on the sameday and told him that my tender was the lowest and they say that the testimonials have number been sent. on being asked by him i replied can bring the testimonials. then i went to delhi and on 9-4-66 1 came with the testimonials and the consultant engineer and i had brought the amount of security also. then i went to the office of the chief engineer on the 9th and talked to him and showed my testimonials and handed over the letter exhibit p.3. for taking out the papers i was required to take out money also and after keeping money in my pocket i showed the papers to him. i said i have brought the testimonials also. i have brought the engineer also. you discuss with him and give final reply. he replied do number talk to me. speak to the executive engineer. i said there is companyruption. otherwise why my certificates have been removed from my tender? thereupon he began to say i am number prepared to hear this much. whereupon i replied you are head of the depart- ment. if you do number hear who will hear? thereupon he replied. do number talk anything more with me? whereupon i said are you also included in that companyruption ? thereupon he pressed the buzzer. i had a hot talk with him. my engineer also told him. thereupon he replied i am number prepared to hear anything. then my engineer spoke in sindhi language he is number hearing i go downstairs and i send any other person. at the same time wadhwa saha threw away the testimonials and said where those persons have gone ? whereupon i replied they have gone down- stairs. he questioned what did they say?- i replied they have number said anything. then i put the testimonials in my pocket and he pressed the buzzer. in defence the accused examined one witness v. s. asnani consulting engineer. according to this witness he went with the accused on the day of occurrence to wadhwa pw. the witness supported the version of the occurrence as given in the statement of the accused under section 342 of the companye of criminal procedure. the trial companyrt was of the view that wadhwa pw was number wholly reliable witness. as regards gupta and tiwari it was observed that they were interested witnesses. reference was also made to some discrepancies in the prosecution evidence as well as to the fact that there was numbermention in the first information report of the extra judicial companyfession of the accused. the version given by the accused in the opinion of the trial companyrt companyld number be said to be unreasonable. in the result the trial companyrt gave the benefit of doubt to the accused and acquitted him. on appeal the high companyrt companysidered the evidence adduced in the case by the prosecution and found the same to be reliable. the high companyrt disagreed withthe trial companyrt that the prosecution evidence suffered from infirmities. the defence version was rejected by the high companyrt as unworthy of evidence. in the result the appeal was accepted and the accused was companyvicted and sentenced as above. in appeal before us mr. hardy on behalf of the appellant his assailed the judgment of the high companyrt and has companytended that there was numbersufficient ground for the high companyrt to reverse the judgment of acquittal of the trial companyrt. if two views according to the learned companynsel were possible in the matter the view which was favourable to the accused and had been taken by the trial companyrt should be adopted. as against that mr. ram panjwani on behalf of the state submits that the view taken by the trial companyrt was clearly unreasonable and there were good and valid grounds for the high companyrt to interfere with the judgment of the trial court. we find force in the submission of mr. ram panjwani. the prosecution in order to bring the charge home to the accused has examined wadhwa pw 1 . the witness gave evidence in support of the prosecution case as reproduced above and deposed about the offer of the envelope companytaining currency numberes by the accused to him. we have been taken through the evidence of the witness and find numbercogent ground as to why his evidence should number be accepted the witness had numberanimus against the accused. the witness even did number knumber the accused earlier and had met him only once before on april 7 1966 when the accused had seen him in his office and had made some representation regarding his tender. in the circumstances we can discover numberparticular reason as to why wadhwa should falsely involve the accused in this. case. the trial companyrt did number place much reliance upon the testimony of wadhwa because the witness admitted that complaints had been made against him for showing favouritism as well as for companyruption and highhandedness. on some occasions the witness also had to give explanation to clarify some particular action. the accused also placed on record letters and articles published in a local paper copies of which are d2 d3 d4 and d5. in this respect we find that documents d2 to d5 companytained general allegations of irregularities in hel. there were numberallegations in those writings against wadhwa by name or by designation. as regard the companyplaints made against wadhwa there is numberhing to show that the authorities companycerned found substance in any of those companyplaints. as things are such companyplaints are even made against senior officers who are very honest. in the absence of material to show that substance was found in any of the companyplaints made against wadhwa it would in our opinion be number proper to infer that wadhwa is a person of doubtful integrity from the mere fact that sometimes complaints were received against him. anumberher reason which weighed with the trial companyrt in number placing much reliance upon the testimony of wadhwa was the fact that in answer to a question relating to the details of the design of the tanks in question the witness replied that it was his prerogative as chief engineer incharge of companystruction to decide as to what he should do. the above answer would show that the witness used inappropriate language in describing his powers and functions. the answer might also reveal that the witness had exaggerated numberion of the authority vested in him but these facts would hardly warrant an inference that wadhwa pw is number a very truthful witness and the companyrt cannumber place much reliance upon his testimony. the companyduct of wadhwa immediately after the offer to him of the envelope companytaining currency numberes by the accused lends considerable support to his testimony. wadhwa immediately pressed the buzzer and called ms personal assistant shrivastava pw. shrivastava pw was then told by wadhwa that the accused had offered him bribe. wadhwa also told shrivastava to take out the envelope companytaining currency numberes from the trousers pocket of the accused. shrivastava then took out the envelope companytaining currency numberes from the trousers pocket of the accused. the envelope was then found to companytain 30 currency numberes of rs. 100 each. the evidence of wadhwa in this respect is companyroborated by that of shrivastava. pw. shrivastava too had numberanimus against the accused and it is number explained as to why shrivastava should falsely depose against the accused in this case. it has been pointed out by mr. hardy that wadhwa did number mention in report p1 dictated by him that he had told shrivastava about the offer of bribe by the accused to him. this omission appears to have been due to the fact that wadhwa did number give companyplete details in the report dictated by him. as mentioned earlier there is numberhing to show as to why shrivastava should falsely depose against the accused. the fact that shrivastava was a personal assistant of wadhwa would hardly justify rejection of his testimony especially when wadhwa himself had numberanimus against the accused. in any case it is mentioned in report pi and is also admitted by the accused in his statement under section 342 of the companye of criminal procedure that shrivastava took out rs. 3000 from the trousers pocket of the used under the directions of wadhwa. there is numberhing to show that the accused protested against the taking out of the currency numberes from his pocket by shrivastava under the directions of wadhwa. if the accused was an innumberent person and had numberguilty companyscience he would in the numbermal companyrse have flared up and number meekly submitted to the recovery of currency numberes from his pocket by shrivastava under the directions of wadhwa. the companyduct of wadhwa in directing shrivastava to take out the envelope containing currencynumberes from the pocket of the accused is in companysonance with the prosecution case and. belies the defence version. the evidence of gupta and tiwari pws regarding the extra judicial companyfession. made by the accused after the arrival of these witnesses lends further companyroboration to the evidence of wadhwa. these two witness who were senior officers of hel had numberenmity with the accused and numberhing has been brought out as to why they should make false statements against the accused. it is true that wadhwa made numbermention of the extra judicial companyfession of the accused in the report sent by him to the police. this omission might also have been due to the fact that wadhwa did number give full details in the report dictated by him. be that as it may even if the evidence regarding the extra judicial confession of the accused were excluded from companysideration the other material on record particularly the testimony and companyduct of wadhwa as well as the evidence of shrivastava furnishes ample ground for basing the conviction of the accused. we are number impressed by the plea taken on behalf of the accused that rs. 3000 which were recovered from his pocket had been brought by him for the purpose of depositing security. the question of the depositing of the security would have arisen only if and when the tender would have been accepted. the amount of security in that event would have to be deposited within 15 days of the date directing the companytractor to do so. argument has also been advanced on behalf of the accused appellant that it was number a companydition of the tender that the contractor would use 24 tons of steel in the making of the tanks in question.this may be so but it would number make any material difference so far as the present case is companycerned. the evidence of wadhwa pw shows that he had learnt from the assistant chief engineer that as against the accused who had stipulated to use 18 tons of steel the other companytractors had stipulated to use 24 tons of steel. the accused in the circumstances might have become apprehensive that his tender in spite of his lowest quotation might number be accepted. necessity might consequently have been felt by the accused to offer illegal gratification with a view to secure a favourable decision in the matter of the acceptance of the tender. the view taken by the trial companyrt in rejecting the evidence of wadhwa in our opinion was clearly unreasonable and the high companyrt in our opinion had companyent grounds to interfere with the judgment of acquittal of the trial companyrt. we are unable to find any infirmity in the appraisement of the evidence by the high companyrt as may induce us to take a different view. reference on behalf of the appellant has been made to the decision of this companyrt in the case of kanu ambu vish v. state of maharashtra 1 wherein it was observed that the high companyrt in reversing a judgment of acquittal should number only companysider all matters on record including the reasons given by the trial companyrt in respect of the order of acquittal but should particularly companysider those aspects which are in favour of the accused and ought number also act on companyjectures or surmises. the above dictum in our opinion cannumber be of much avail to the appellant because we find that the high companyrt in reversing the order of acquittal considered the matters on record including the reasons given by the trial companyrt as well as those aspects which could possibly be claimed by the. accused to be favourable to him. it is well settled that the high companyrt in appeal under section 417 of the companye of criminal procedure has full power to review at large the evidence on which the order of acquittal was founded and to reach the companyclusion that upon the evidence the order of acquittal should be reversed. no limitation should be placed upon that power unless it be found expressly stated in the companye but in exercising the power companyferred by the companye and before reaching its conclusion upon fact the high companyrt should give proper weight and companysideration to such matters as 1 the views of the trial judge as to the credibility of the witnesses 2 the presumption of innumberence in favour of the accused a presumption certainly number weakened by the fact that he has been acquitted at his trial 3 the right of the accused to the benefit of any doubt and 4 the slowness of an appellate companyrt in disturbing a finding of fact arrived by a judge who had the advantage of seeing the witnesses. we have been taken through the judgments of the trial companyrt and the high companyrt and we find that the judgment of the high court is number vitiated by any such infirmity as may call for interference by this companyrt. before we part with this case we would like to observe that as long as an impression exists that companyruption is prevalent and that unless one pays to somebody things are number done there would be always persons who would feel the urge to offer bribe. bribe would be offered number only to get an undue favour but also to avoid unnecessary harassment and to see that numberobstruction or delay is caused in getting the most legitimate work done. to prevent the repetition of crimes. like a i. r. 1971 s. c. 2256. the one of which the appellant has been found guilty it is necessary to inculcate a general feeling that things are done in due companyrse uninfluenced by extraneous considerations. it would be unfortunate that rightly or wrongly an impression were to exist that without payment of illegal gratification things would number be done. at the same time the position in law is that if one makes an offer of bribe to a public servant he would be guilty of the offence under section 165a indian penal companye. the companyrts are companycerned only with the fact whether the person arraigned as an accused before them is guilty of the offence with which he is charged.

LORD JUSTICE DYSON: The appellant is a citizen of Sudan. He appeals with the permission of this court against the decision of the Immigration Appeal Tribunal of 23 September 2003 to dismiss his appeal against the dismissal by the adjudicator on 14 December 2001 of his appeal against the refusal by the Secretary of State to grant him asylum. The appellant arrived in the United Kingdom on 29 October 2000 and applied for asylum the same day. His claim was based on his assertion that he had been a member of the Democratic Unionist Party ("the DUP"), an opposition political party. He claimed that he had been detained and ill treated in November 1991, June 1995 and March 1996 because of his political views. He said that he left Sudan in October 2000 because he feared that he would be persecuted for his role in a demonstration against the terms of national service. The appellant gave evidence before the adjudicator and called Maj.Gen. Merghani as a supporting witness. The adjudicator concluded (at paragraphs 63-65) that the appellant was not a credible witness and gave a number of reasons for his conclusion. He noted that at the Home Office interview the appellant had said nothing about the detentions and incidents of ill treatment about which he gave evidence. The adjudicator did not accept that the appellant was not given an opportunity at interview to describe these matters. The adjudicator also noted that the appellant said he had gone to Syria in 1999 on a false passport, and yet he said that while in Syria he called for his own passport to be sent to him from Sudan to Syria so that he could enter the University of Damascus. The appellant relied on various letters put forward on his behalf including one purporting to have been written by Sid Ahmed Alhussein Sid Ahmed, Deputy Secretary-General of the Sudanese DUP. For the reasons that he gave, the adjudicator said he could not attach any weight to them. At paragraph 74 the adjudicator referred to the fact that at the interview the appellant was asked about his membership card, and that the appellant had said that he would receive it through the secret post within a view days. The adjudicator regarded it as significant that despite the passage of time the card had not been forthcoming. The adjudicator found (at paragraph 77) that further damage was done to the appellant's credibility by his answers to the question who had paid for him to come to the United Kingdom. At interview, he said that the money had come from his leaders. In his oral evidence, however, he said that the DUP had not helped him financially but that the money had been provided by his cousin. Later he said that most of the money had come from his father. There were yet further matters which led the adjudicator to reject the appellant as a credible witness, but it is not necessary to refer to any more of them. The adjudicator concluded his findings in relation to the appellant's activity in Sudan by saying (at paragraph 83) that the appellant had come to the United Kingdom for the purposes of economic betterment; he had not been detained in Sudan and the authorities were not looking for him prior to his departure for the United Kingdom. He also said in terms that he did not believe that the appellant had ever been a member of the DUP while he was in Sudan (paragraph 84). As for his political activities in the United Kingdom, the adjudicator accepted that he may well have attended meetings of the DUP here. There was a photograph of him at a small-scale gathering or demonstration outside Chatham House next to a person who was said to be the DUP leader. The adjudicator dismissed this as a "cynical attempt by the appellant to improve his chances of being allowed to remain in this county on asylum and human rights grounds". He concluded that these activities would be seen by the Sudanese authorities as being of "an extremely low level nature" (paragraph 85). The same reasons that led the adjudicator to reject the claim of a well-founded fear of persecution also led him to reject the claims based on human rights grounds. The appellant was given leave to appeal by the tribunal. The grounds of appeal raised many points. These included challenges to some of the adjudicator's specific findings of fact. On 17 April 2002, he submitted to the tribunal a supplementary bundle which contained documents which had not been placed before the adjudicator. It seems that this bundle was not linked with the appellant's file and the material was therefore not considered by the tribunal who heard the appeal. The appellant was neither present nor represented at the hearing of the appeal. The tribunal dismissed the appeal on 30 May 2002. That decision was itself the subject of an appeal to this court which was compromised by a consent order made on 22 January 2003 whereby the appeal was allowed and the matter remitted to the tribunal for a re-hearing. The reasons given to this court for that compromise included: "(3) In a determination notified on 30 May 2002 the Immigration Appeal Tribunal dismissed the Appellant's appeal against the Adjudicator's determination. Neither the Appellant nor his solicitors attended the hearing. In its determination the Tribunal noted that 'the appellant's solicitors have filed no documents since the Grounds of Appeal. (4) In fact, the Appellant's solicitors had lodged three bundles of documents at the Tribunal on 17 April 2002. In refusing leave to appeal to the Court of Appeal, the tribunal said that 'these have subsequently been found and linked to the file ..... Nothing in that bundle discloses an error of fact or law in the Adjudicator's determination which would have made a material difference to the outcome of this appeal'. (5) However, it is arguable that the Immigration Appeal Tribunal erred in failing to give reasons for its conclusion that the material did not disclose anything which would have made a material difference to the outcome of the appeal. It is therefore expedient that the Appellant's appeal against the Tribunal's determination be allowed and the case remitted back to the Tribunal for a rehearing of the appeal against the adjudicator's determination." The supplementary bundle of documents was re-submitted to the tribunal. The tribunal dismissed the remitted appeal on 23 September 2003. They held that when deciding the issue of the appellant's credibility the adjudicator was entitled to determine what weight to give to the Home Office interview and to the fact that the membership card had not been produced. They also rejected the allegations of procedural unfairness on the grounds that it was clear that credibility was at issue. In so far as there was a challenge to the adjudicator's findings of fact, they did not disclose any error. Mr Soorjoo, who appears on behalf of the appellant, accepts that but for the material contained in the supplementary bundle there would no basis for impugning the tribunal's decision. The only point raised by him on behalf of the appellant concerned the new material that was not before the adjudicator. It is accepted by Mr Soorjoo that the effect of the transitional provisions in Rule 61 of the Immigration and Asylum Appeals (Procedure) Rules 2003 ("the 2003 Rules") is that the rules which govern the procedure for the admission of new evidence before a tribunal in the present case were those contained in Rule 21 which provides: "(1) The tribunal may consider as evidence any note or record made by the adjudicator of any hearing before him in connection with the appeal. (2) If a party wishes to ask the tribunal to consider evidence which was not submitted to the adjudicator, he must file with the appellate authority and serve on the other party written notice to that effect, which must - (a) indicate the nature of the evidence; and (b) explain why it was not submitted to the adjudicator. (3) A notice under paragraph (2) must be filed and served as soon as practicable after the parties have been notified that permission to appeal has been granted. (4) If the tribunal decides to admit additional evidence, it may give directions as to - (a) the manner in which; and (b) the time by which the evidence is to be given or filed." The 2003 Rules came into force on 1 April 2003. No written (or indeed oral) notice was given to the tribunal by the appellant or his legal representative that he wished to ask the tribunal to consider the material contained in the supplementary bundle. The hearing took place on 11 April. The appellant was represented by his solicitor, Mr Anas Ahmed Khan. In a witness statement dated 17 February 2004, Mr Khan states: "3. Although I did not make a specific application to adduce further documents but I made submission on the documents obtained and submitted after the Adjudicator's hearing but IAT never raised it as an issue that these documents are not admissible during the proceedings of the hearing. These documents were important to the Claimant's case as those rebutted the Adjudicator's speculative conclusion." The tribunal did not indicate to Mr Khan what their attitude was as to the admissibility or relevance of the new material. We should point out that the grounds of appeal before the tribunal made no reference to the new material. In their determination dismissing the appeal the tribunal made no reference to the new material either. An application for permission to appeal to this court was made in the first instance to the tribunal. This was refused by them for the following reasons: "The Tribunal was satisfied that the adjudicator's conclusions were properly open to him for the reasons he gave. The grounds of appeal did not raise the issue that there was fresh evidence which might show that the Adjudicator's conclusions were incorrect although the bundle before the Tribunal did include additional documents to those before the Adjudicator (but not the membership card referred to by the Adjudicator in paragraph 74) but no specific application was made to the Tribunal to adduce further evidence under Rule 22 (5) of the 2000 Procedural Rules or Rule 21 of the 2003 Procedure Rules. The grounds seek to re-argue issues of fact which were fully considered by the Adjudicator in a comprehensive determination. The Tribunal was not satisfied that there was any proper basis for interfering with those findings." Mr Soorjoo makes the point (not disputed by Miss Anderson) that it is not clear from these reasons whether the tribunal took no account of the new material because no application had been made under Rule 21 of the 2003 Rules or whether the tribunal did consider the new material and decided that it was irrelevant to the grounds of appeal and/ or could not have affected the adjudicator's decision and was therefore not a reason for allowing the appeal. In my view, in their reasons for refusing permission to appeal the tribunal should have made it clear precisely how they had treated the new material. Further - although for reasons that I shall give the tribunal were justified in disregarding the new material in this case - it would have been better if they had indicated to Mr Khan during the course of his oral submissions what position they were taking or were minded to take as to the admissibility of the new documents. It was obvious that Mr Khan was seeking to rely on the material in support of the appellant's case. Mr Soorjoo submits that the failure by the tribunal to indicate at the hearing that they were disregarding the new material rendered the decision unfair, having regard to (a) the circumstances which led to the appeal being remitted to the tribunal for reconsideration, (b) the fact that the tribunal were referred to the material and its relevance by Mr Khan in his oral submissions and (c) the fact that the tribunal did not indicate at the hearing that they would not take the material into account when deciding the matter. The failure to consider the new material is unfair and inconsistent with the requirement that the most anxious scrutiny be given in these cases. In my judgment the language of Rule 21 of the 2003 Rules is clear. If a party wishes the tribunal to consider evidence which was not submitted to the adjudicator he must file a written notice to that effect which must satisfy the two conditions prescribed by Rule 21 (2). The onus is put fairly and squarely on the appellant. There is no obligation on the tribunal to consider fresh material in any other circumstances. Rule 21 (2) marked a significant shift from the position which obtained under the previous regime embodied in the Immigration and Asylum Appeals (Procedure) Rules 2000, Rule 22 of which provided: "(1) The Tribunal may consider as evidence any note or record made by the adjudicator of any proceedings before him in connection with the appeal. (2) Subject to paragraph (3) the Tribunal may, of its own motion or on the application of any party, consider evidence further to that which was submitted to the adjudicator. (3) The Tribunal shall not consider any evidence which is not served in accordance with time limits set out in these Rules or directions given under rule 30, unless the Tribunal is satisfied that there are good reasons to do so. ..... (5) Where any party wishes to adduce further evidence before the Tribunal in accordance with paragraph (2), he shall give written notice to that effect to the Tribunal indicating the nature of the evidence." Under that regime the tribunal had a wide discretion to consider fresh evidence of its own motion, and in relation to evidence which a party wished to adduce the rules were less strict than they are under the 2003 Rules. Mr Khan's oral submissions by reference to the fresh material did not even amount to a notice of the appellant's wish to ask the tribunal to consider the fresh evidence which, had it been in writing, would have complied with Rule 21 (2) of the 2003 Rules. Mr Khan gave no explanation as to why the material was not submitted to the adjudicator. I would accept that in exceptional circumstances a tribunal may admit fresh evidence even where the strict requirements of Rule 21 (2) have not been satisfied. These are more likely to occur where the appellant is acting in person and where there is a clear link between the fresh evidence and the appellant's grounds of appeal. There are no exceptional circumstances in the present case. The appellant was represented by a solicitor at all material times. Moreover there is no link between the new material and the appellant's grounds of appeal in this case. The grounds make no reference to the fresh material. The grounds of appeal are very specific and seek to challenge individual findings of fact of the adjudicator. No attempt has been made by Mr Soorjoo to link the new material to the specific findings and show how it casts doubt on them. In these circumstances Miss Anderson is right to submit the new evidence is irrelevant to the grounds of appeal. Finally I turn, albeit briefly, to examine the fresh material to see whether it casts any doubt on the safety or correctness of the adjudicator's decision. The starting point is that the adjudicator's decision was a model of its kind. It was thorough and careful. The adjudicator gave several cogent reasons for his conclusions that the appellant lacked credibility and that his claim had to be rejected. The first document in the supplementary bundle is a letter dated 30 January 2002 by Maj.Gen. Merghani. He is the retired Vice-President of the United Kingdom branch of the DUP. There was a witness statement from him which was before the adjudicator, dated 13 August 2001. In that statement he said that the appellant had been a member of the DUP in Sudan and had been subject to harassment there. Maj.Gen. Merghani gave oral evidence before the adjudicator. The adjudicator said this about his evidence: "When asked about the appellant, it is significant that Mr Merghani chose to refer first to the fact that the appellant was an active member of the DUP in the United Kingdom, having recently attended a meeting regarding the establishment of a new Youth and Students' Office. The witness was, however, extremely vague in answering questions about the appellant's DUP background in Sudan. In particular, when asked about checks carried out by the DUP in the United Kingdom, when faced with a person seeking membership here, the witness spoke in general terms and had to be asked to focus his attention upon what was done in the case of this particular appellant. If, as he claimed, the appellant was a card-carrying member of the DUP, and if, as he told me, records were kept in Sudan of DUP members, it is significant that neither the witness nor the other writers of letters on behalf of the appellant have seen fit to give any details regarding his membership of the DUP in Sudan. This is particularly noteworthy, given that the appellant claims to be someone who has undergone significant hardships in the cause of the DUP, to the point where that party has expended significant time, effort and - possibly - money, in getting him to the United Kingdom." In the new letter Maj.Gen. Merghani refers to the appellant's release from detention in March 1996 and says that he was persecuted for his membership of the DUP. He also says - "for obvious security reasons neither our headquarters nor our branch issues membership cards." In relation to the membership card, as I have said, the adjudicator was impressed by the fact that no card was produced before him. This led the adjudicator to say at paragraph 76 that he could not attach any weight to the letters put forward on behalf of the appellant insofar as they purported to support his account of events in Sudan. In my view if Maj.Gen. Merghani had given evidence to the adjudicator in accordance with the new letter it is clear that it would not have affected the adjudicator's decision, nor would it have made any difference to the view of the tribunal that the adjudicator was entitled to reach the conclusion that he reached. The new explanation for the absence of a card further undermines the appellant's credibility. It was not his case before the adjudicator that he did not have a card since cards were not issued to members for security reasons, but rather that "he could not bring his DUP membership card with him from Sudan considering the way he left" (paragraph 44). It follows that the fresh evidence of Maj.Gen. Merghani, far from assisting the appellant's case, further undermined it. Perhaps this is why Mr Soorjoo does not place great reliance on Maj.Gen. Merghani's letter. Instead he concentrates on three further documents. First, there is an undated letter from Sid Ahmed Alhussein Sid Ahmed. This letter purports to certify that the appellant has been a member of the DUP in Sudan since 1989 and that he was subject to frequent detention by the security forces, particularly in November 1991, June 1995 and March 1996. A different letter from the same person was before the adjudicator. As Miss Anderson points out, the previous letter says nothing about detention of the appellant on the grounds of his involvement with the DUP. Moreover the earlier letter is in English and the new one in Arabic. There is no explanation of the provenance of the new letter and no explanation as to why the new points were not dealt with in the earlier letter. In these circumstances, and in the light of the adjudicator's view of the letters placed before him in support of the appellant's case, there is no reason to suppose that if the adjudicator had seen this letter it would have affected his view of the credibility of the appellant or that if the tribunal had taken this letter into account they would have taken a different view as to the safety of the adjudicator's decision. The second document is a travel prohibition form dated 13 April 1996 issued in respect of the appellant. It states: "You are hereby requested to prohibit travel of the above-mentioned because of involvement in riot acts." It gives the reason for the prohibition as "prompting against policies of public security and authorities under surveillance of security forces". Here too there is no explanation of the provenance of this document in view of its date, April 1996. The delay in its production, if it is genuine, cries out for an explanation. Further, although the appellant has made a number of statements in connection with his claim for asylum, there is no reference to this document by him. In these circumstances, having regard to the adjudicator's detailed assessment of the credibility of the appellant, it is clear that this new document would not have led the adjudicator to a different conclusion. The final document is an arrest warrant dated 7 October 2000 in respect of the appellant. It does not identify the offence to which it relates. There is no explanation as to why it was not produced to the adjudicator. Its vagueness casts considerable doubt on its authenticity. But even if it is to be assumed that it is a genuine document, it is an equivocal document. It is consistent with the appellant having allegedly committed a criminal offence rather than being at risk of persecution. For all these reasons I would dismiss this appeal. LORD JUSTICE JONATHAN PARKER: I agree. LORD JUSTICE KENNEDY: I also agree. Order: Appeal dismissed. The applicant/appellant's costs to be subject to detailed assessment.

CRIMINAL APPFLLATE JURISDICTION Criminal Appeal No. 205 of 1956. Appeal by special leave from the judgment and order dated the 30th November, 1955, of the Punjab High Court in Criminal Appeal No. 282 of 1955, arising out of the judgment and order dated the 15th February, 1955, of the Court of the Additional Sessions Judge at Amritsar in Sessions Case No. 64 of Trial No. 6 of 1955. L. Anand, and S. N. Anand, for the appellant. Kartar Singh Chawla, Assistant Advocate-General, for the State of Punjab and T. M. Sen, for the respondent. 1957. September 17. The following Judgment of the Court was delivered by KAPUR J.-This is an appeal against the judgment and order of the Punjab High Court reversing an order of acquittal by the Additional Sessions Judge, Amritsar. The appellant Bakshish Singh and his brother Gurbakshi Singh were tried for an offence under ss. 302/34 of the Indian Penal Code but were acquitted. Against this judgment the State took an appeal to the High Court. As Gurbaksh Singh was said to be absconding the appeal against the appellant alone was heard and decided by the High Court. On August 1, 1954, sometime between 7 and 8 p.m Bachhinder Singh son of Bhagwan Singh of village Kairon was shot in the lane in front of their house and as a result of bullet injuries be died the next day in the hospital at Amritsar. He was at the time of shooting accompanied by his younger brother Narvel Singh, a boy of 13, and after getting injured Bachhinder Singh and his brother returned to the house. Bhagwan Singh states that he was informed of the identity of the assailants by Bachhinder Singh who was, at his own request, carried from the house to the hospital at Kairon but as the injuries were serious the doctor at Kairon rendered first aid and advised the father to take his son to V. J. Hospital at Amritsar. Bhagwan Singh then took Bachhinder Singh to the Railway Station but before the arrival of the train he went to the Police Post at Kairon which is at a distance of about 100 yds. from the Railway Station in order to make a report. As the Assistant Sub Inspector was away at Sarhali, he returned to the Railway Station and took his son to the Amritsar hospital by the train leaving Kairon at 9-47 p.m. Bhagwan Singh was accompanied at that time by his younger son, Narvel Singh, P.W. 12, and by Shamir Singh, Inder Singh and Narinjan Singh. Soon after their arrival at the Amritsar hospital Bachhinder Singh was examined by Dr. Kanwal Kishore, P.W. 2, at 11-45 p.m. and finding the injury to be of a serious nature the doctor sent information to the Police as a result of which Head Constable Maya Ram Sharma, P.W. 4, arrived at the hospital sometime after midnight and, in the presence of Dr. Mahavir Sud, P.W. 17, recorded the dying declaration of Bachhinder Singh, Exhibit P-H, after getting a certificate from the doctor that the injured person was in a fit state to make a statement. This statement is the basis of the First Information Report, Exhibit P-H. 1, which is a companyy of Exhibit P-H. This report was recorded on August 2, 1954, at 7-50 a.m. at Police Station Sarhali which, we were told, is about 20 miles or so away from Amritsar. In the early hours of the morning Dr. K. C. Saronwala P.W. I performed an operation on Bachhinder Singh and extracted a bullet from the left abdominal wall which was handed over to the Police. But Bachhinder Singh died at 1-35 p.m. on August 2, 1954. An inquest report Exhibit P-K was prepared at 2-30 p.m. by Head Constable Maya Ram, P.W. 4. The case for the prosecution rests on the dying declaration of Bachhinder Singh, Ex. P-H, and on the statement of Narvel Singh, P.W. 12, who was an eye witness to the occurrence and on the statement made by the deceased to his father as to his assailant as soon as he Bachhinder Singh was brought to the house after receiving the injuries. The prosecution also relied on an extra-judicial companyfession made to Teja Singh, P.W. 13, but both the companyrts below have rejected this piece of evidence and it is unnecessary to companysider it any further. The learned Additional Sessions Judge rejected the dying declaration made by Bachhinder Singh on two grounds that at the time of recording the dying declaration number only Bhagwan Singh, the father, and Narvel Singh, the brother of Bachhinder Singh, were present but the police officer had actually made enquiries from them about the occurrence before he proceeded to record the dying declaration of Bachhinder Singh deceased. Head Constable Maya Ram, P.W. 4, has admitted in cross-examination that Bachhinder Singh gave his statement in Punjabi but the form and the detailed account given in the statement, Exhibit P-H, would show that it was number the product of Bachhinder Singhs creation alone but it was a touched up declaration of the deceased. It is laid down in 1954 Lahore 805 that a dying declaration which records the very words of the dying man unassisted by interested persons is most valuable evidence but the value of a dying declaration altogether disappears when parts of it had obviously been supplied to the dead man by other persons whether interested or Police Officer. As the dying declaration, Exhibit P-H, in this case cannot be regarded as the creation of Bachhinder Singh deceased, numberreliance whatsoever can be placed on it and it companyld number form the basis for the companyviction of any of the accused. The learned Judges of the High Court did number agree with this criticism. Birhan Narain J., who delivered the main judgment, said This criticism appears to me to be without any substance. The statement was recorded by Head Constable Maya Ram who was posted in Amritsar and was number posted in village Kairon and therefore had numberknowledge of the parties number had any interest in them Thus there was numberreason why he should record the statement falsely or irregularly. Throughout the time that the statement was recorded Dr. Mahavir Sud of the Amritsar hospital was present. He has appeared as P.W. 17 in the present case. He is a respectable and disinterested person and he is positive in his testimony before the companyrt that the statement was made by the deceased voluntarily and that there was numberody present to prompt him. He has further stated that he did number allow any person to be present at that time. There is absolutely numberreason for doubting the companyrectness of this statement Coming to the other objection of the Additional Sessions Judge, it is difficult to understand the significance attached by him to the fact that the deceased spoke in Punjabi while the statement was recorded by Maya Ram in Urdu. The companyrt language is Urdu and the Police generally records statements in Urdu even if they are made in the Punjabi language. I have numberdoubt in my mind that the dying declaration recorded in the present case is a voluntary one and was made without any prompting from anybody. The High Court in our opinion companyrectly appreciated the evidence and was right in accepting the authenticity of the dying declaration. The statement of Maya Ram, P. W. 4, does number support the criticism of the learned trial judge. And he had read more in the statement of Narvel Singh, P. W. 12, made before the Committing Magistrate, than it really companytains. It is unfortunate that the criticism has proceeded on the English record of the Magistrates Court which does number appear to have been companyrectly recorded as the Urdu record is in many parts materially different. The fact that the statement companytained in Exhibit P-H was made without any prompting is also supported by the testimony of a wholly disinterested witness, Dr. Mahavir Sud, whose statement made before the Committing Magistrate was transferred at the trial stage under s. 33 of the Evidence Act. He stated The statement of Bachhinder Singh was voluntary and there was numbere to prompt it. I did number allow any attendant on Bachhinder Singh then. In cross-examination he made it clearer that there was numberrelation or friend of the deceased person when the statement was recorded. Some criticism was levelled against the dying declaration based on a sentence in the statement of Dr. Mahavir Sud P. W. 17 that the Head Constable put certain questions to clarify the ambiguities and these questions and answers do number find place in Exhibit P- H, the record of the dying declaration. No such question was put to the Head Constable who recorded the statement. The Head Constable stated that the dying declaration was written at the declarants own dictation without any addition or omission. In cross-examination numberhing was asked as to any questions having been put to the deceased by this witness. Therein the witness also stated It is number companyrect that I first made the inquiry from the father of the deceased and other persons before I proceeded to record his statement . He also made it clear that before he allowed the statement to be made he satisfied himself that Bachhinder Singh was in a fit state to make the statement. We are of the opinion that the High Court rightly held the dying declaration to be a statement made by the deceased unaided by any outside agency and without prompting by anybody. The declarant was free from any outside influence in making his statement. Another reason given by the Additional Sessions Judge for rejecting the dying declaration was that the deceased gave the narrative of events in Punjabi and the statement was taken down in urdu. In the Punjab that is how the dying declarations are taken down and that has been so ever since the companyrts were established and judicial authority has never held that to be an infirmity in dying declarations making them inefficacious. As a matter of fact in the Punjab the language used in the subordinate companyrts and that employed by the Police for recording of statements has always been Urdu and the recording of the dying declaration in Urdu cannot be a ground for saying that the statement does number companyrectly reproduce what was stated by the declarant. This, in our opinion, was a wholly in. adequate reason for-rejecting the dying declaration. Exhibit P-H, the dying declaration, is a long document and is a narrative of a large number of incidents which happened before the actual assault. Such long statements which are more in the nature of First Information Reports than recital of the cause of death or circumstances resulting in it are likely to give the impression of their being number genuine or number having been made unaided and without prompting. The dying declaration is the statement made by a person as to the cause of his death or as to any of the circumstances of the transaction which resulted in his death and such details which fall outside the ambit of this are number strictly within the permissible limits laid down by s. 32 1 of the Evidence Act and unless absolutely necessary to make a statement companyerent or companyplete should number be included in the statement. We are informed that, in the Punjab, numberrules have been made in regard to the recording of dying declarations which, we are told, has been done in several other States. We think it would be desirable if some such rules were framed and included in the Rules and Orders made by the High Court for the guidance of persons recording dying declarations. Of companyrse the authenticity of the dying declaration has to be judged in accordance with the circumstances of each case depending upon many factors which would vary with each case but those recording such statements would be well advised to keep in view the fact that the object of a dying declaration is to get from the person making the statement the cause of death or the circumstances of the transaction which resulted in death. The admissibility of the statement of Dr. Mahavir Sud was assailed by companynsel for the appellant on the ground that the companyditions laid down for the admissibility of statements under s. 33 had number been companyplied with and several decided cases were relied upon. This question does number seem to have been raised at any previous stage of the proceedings, neither before the Additional Sessions Judge number before the High Court, and this criticism seems to be without much substance. At the trial the prosecution produced Foot Constable Kartar Singh, P. W. 14, who deposed that he took the summons for this witness to the hospital where he was previously employed and the Superintendent of the hospital made a report that he was numberlonger in service and it was number known where he was. This witness also stated that from the inquiries made by me, I learnt that his whereabouts are number known. In cross-examination he again stated that he made inquiries but he companyld number discover the whereabouts of this witness. After the statement of Kartar Singh, P. W. 14, the Public Prosecutor made a statement that Dr. Mahavir Suds whereabouts were number known and prayed that his statement be transferred under s. 33 of the Evidence Act on the ground that there was numberlikelihood of the witness being available without unreasonable delay and expense and numberobjection is shown to have been taken by the defence at that stage. Thereupon the learned trial judge ordered the statement to be transferred under s. 33 of the Evidence Act. He might have been well advised to give fuller reasons for making the order transferring the statement. It appears to us that the learned judge transferred it on the ground of unreasonable delay and expense and we do number find any infirmity in this order of transfer. Counsel then companytended that for the efficacy of the dying declaration, companyroboration was essential. In the present case there is the statement of Narvel Singh, P. W. 12, who is an eye witness to the occurrence which is relied upon by the prosecution as companyroboration of the dying declaration. The learned Additional Sessions Judge rejected the testimony of this witness on the ground that there were discrepancies between his statement made in the companymitment proceedings and at the trial. We have already pointed out that the crossexamination of this witness was based on somewhat inaccurate English record of his statement in the Committing Court, the statement in Urdu record puts a different companyplexion on it. But even if this were number so the High Court, in our opinion, has taken a companyrect view of the testimony of this witness and has accepted it for companyent reasons. Besides Narvel Singh there is the statement of Bhagwan Singh, the father, who stated that as soon as Bachhinder Singh came into the house he mentioned the names of his assailants to him. The incident took place just outside the house of Bhagwan Singh and it was never disputed that he was present in the house when the incident took place. It is only natural that as soon as the injured son came into the house he would be asked as to who had injured him or would himself state who had caused him the injury. He was in his senses at that time and numberreason has been suggested why the son would number disclose to his father the names of his assailants. There is numberadequate reason for rejecting this portion of the testimony of Bhagwan Singh and merely because the dying declaration does number mention it, is hardly a reason for number accepting it. The number-production of Sucha Singh who is stated in the dying declaration and in the statement of Narvel Singh, P.W. 12, to have witnessed the occurrence was companymented upon by companynsel as a very serious omission. The Public Prosecutor stated at the trial that he was giving up Sucha Singh as he had been won over. Therefore, if produced, Sucha Singh would have been numberbetter than a suborned. witnesss. He was number a witness essential to the unfolding of the narrative on which the prosecution was based and if examined the result would have been companyfusion, because the prosecution would have automatically proceeded to discredit him by cross-examination. No oblique reason for his number-production was alleged, least of all proved. There was, therefore, numberobligation on the part of the prosecution to examine this witness See Abdul Moham. mad v. Attorney General of Palestine 1 Stephen Servaratne v. The King 1 Habeeb Mohammad v. The State, of Hyderabad 3 . In the circumstances the companyrt would number interfere with the discretion of the prosecutor as to what witnesses should be called for the prosecution and numberadverse inference under s. 114 of the Evidence Act can be drawn against the State. The High Court, in our opinion, have kept in view companyrect principles governing appeals against acquittals and have rightly applied them to the circumstances A.I.R. 1945 P.C. 42 A.I.R. 1936 P.C. 289. 3 1954 S.C.R. 475. of this case. The erroneous view that the learned Sessions Judge took of the dying declaration and of the oral evidence were companypelling enough reasons for the reversal of that judgment.

Conclusions OPINION OF ADVOCATE GENERAL LÉGER delivered on 16 October 2003(1) Case C-476/01 Staatsanwaltschaft Frankenthal (Pfalz) v Felix Kapper (Reference for a preliminary ruling from the Amtsgericht Frankenthal (Pfalz) (Germany)) (Directive 91/439/EEC – Refusal by a Member State to recognise a driving licence issued by another Member State – Grounds of refusal – Normal residence of the licence-holder not in the Member State where the licence was issued – Withdrawal of a licence previously issued in the host Member State) 1. Is a Member State entitled to refuse to recognise a driving licence issued by another Member State? If so, on what grounds? Those are, in essence, the questions asked by the Amtsgericht Frankenthal (Frankenthal Local Court), Pfalz, Germany, in criminal proceedings brought against an individual. They closely affect a number of important aspects of the daily life of the European citizen. I – Legal background A – Community legislation 2. The issue and use of driving licences were first harmonised by the adoption of the First Directive 80/1263/EEC. (2) Its purpose was to contribute to improving road traffic safety and to assist the movement of persons settling in a Member State other than that in which they had passed a driving test, or moving within the European Economic Community. 3. To that end, Directive 80/1263 harmonised certain national rules, particularly those relating to the issue of driving licences and the conditions for the validity of such licences. It established a Community model licence, introduced a principle of mutual recognition of such licences and provided for the exchange of licences by holders transferring their place of residence or place of employment from one Member State to another. 4. Directive 80/1263 was repealed by Directive 91/439/EEC. (3) The latter marks a further stage in the harmonisation of national provisions, in particular as regards the conditions governing the issue of licences and the scope of the principle of mutual recognition relating to them. 5. The issue of driving licences is subject to minimum age conditions, (4) and to requirements to have passed certain tests, (5) to meet certain medical standards (6) and to have normal residence in the territory of the Member State issuing the licence, or to produce evidence that the applicant has been studying there for at least six months. (7) Article 7(5) of the Directive states that no person may hold a driving licence from more than one Member State. Thus, where a person is the holder of a (valid) driving licence issued by a Member State, and which the other Member States have undertaken to recognise, he is precluded from obtaining another licence from the same or another Member State. 6. The principle of the mutual recognition of licences is laid down by Article 1(2) of the Directive in general terms as follows: ‘Driving licences issued by Member States shall be mutually recognised’. 7. However, where the holder of a valid licence issued by a Member State has taken up normal residence in another Member State, Article 8(2) of the Directive provides that ‘subject to observance of the principle of territoriality of criminal and police laws, the Member State of normal residence may apply its national provisions on the restriction, suspension, withdrawal or cancellation of the right to drive to the holder ... [in question] and, if necessary, exchange the licence for that purpose’. 8. Furthermore, under Article 8(4) of the Directive, ‘a Member State may refuse to recognise the validity of any driving licence issued by another Member State to a person who is, in the former State’s territory, the subject of one of the measures referred to in paragraph 2’. The implementation of this provision by Member States by way of adjustments to their national legislation is subject to the agreement of the Commission. (8) B – National legislation 9. Since 1 January 1999, the driving of motor vehicles in Germany by the holders of licences issued by another Member State and who have taken up residence in Germany has been governed by the Verordnung über die Zulassung von Personen zu den Straßenverkehr of 18 August 1998, also called the Fahrerlaubnisverordnung (9) (Regulation on Access to Road Traffic, hereinafter the ‘FeV’). 10. Under Paragraph 28(1) and (4) of the FeV, the holder of a driving licence issued by a Member State of the European Union or the European Economic Area (hereinafter the ‘EEA’) is not permitted to drive in Germany when at the time the licence was issued he had already taken up normal residence in Germany (unless he obtained his driving licence while he was attending a school or university in the Member State in which it was issued). (10) 11. The same applies when a licence issued by a Member State of the European Union or the EEA is withdrawn (whether on a temporary or permanent basis) by the courts in Germany or is subject to an equivalent (immediately enforceable or final) administrative measure, when there has been a refusal to issue such a licence, when there has been an abandonment of its use, (11) or when the holder of the licence has been banned from driving in Germany or has had his driving licence confiscated or seized or been required to surrender it. (12) 12. It follows from these provisions that the holder of a German licence is no longer permitted to drive in Germany if the licence has been withdrawn (13) or if he has been banned from driving by the German authorities, even if he has subsequently obtained a licence from another Member State. (14) 13. Moreover, according to the interpretation which has been given to those provisions by case-law, (15) the loss of the right to drive in Germany is not limited in time to the period of the driving ban or of the blocked period which is coupled with a withdrawal of the licence. Unlike the position which applied before the regulation implementing the Directive, (16) such a loss of the right to drive in Germany is capable of lasting indefinitely, even after the expiry of the periods concerned. (17) II – Facts and procedure in the main proceedings 14. On 26 February 1998, the Amtsgericht Frankenthal, Pfalz, ordered the withdrawal (equivalent to cancellation) of the driving licence belonging to Mr Felix Kapper, a German national and the holder of a German licence, and instructed the relevant national authorities not to issue a new licence to him before the expiry of a period of nine months, that is to say not before 25 November 1998. 15. Since then, no new licence has been issued to him in Germany. However, he obtained a Netherlands driving licence on 11 August 1999. 16. On 17 March 2000, the same court sentenced Mr Kapper to a fine for driving a motor vehicle in Germany, on 20 November and 11 December 1999, without a valid licence, or, more precisely, while possessing a Netherlands licence whose validity was not recognised by the German authorities. Mr Kapper appealed against that decision, to the same court, on the basis that he held a Netherlands licence. III – The question referred for a preliminary ruling 17. In light of the parties’ arguments, the Amtsgericht Frankenthal, Pfalz, decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling: ‘Does Article 1(2) of Council Directive 91/439/EEC of 29 July 1991 on driving licences preclude a Member State from refusing to recognise a driving licence where, according to its investigations, another Member State issued that licence although the holder of the licence did not have his normal residence there, and in appropriate cases is actual effect to be given to that provision in that regard?’ IV – Analysis A – The admissibility of the question referred for a preliminary ruling 18. The Netherlands Government is uncertain whether the question referred for a preliminary ruling is admissible, in the absence, in its opinion, of sufficient information in the order for reference relating to the facts, to the relevant provisions of national law and to the importance of the question for the resolution of the main proceedings, particularly on the assumption that the person concerned was still banned from driving in Germany. 19. It should be borne in mind in that regard that the Court has consistently held that the procedure under Article 234 EC is an instrument which assists cooperation between the Court of Justice and the national courts. (18) In the context of that cooperation, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine both the need for a preliminary ruling and the relevance of the questions which it puts to the Court. Consequently, where the questions submitted by the national court concern the interpretation of Community law, the Court of Justice is, in principle, bound to give a ruling. (19) 20. However, it has stated that it is for the Court to examine the circumstances in which the case was referred to it by the national court in order to assess whether the Court has jurisdiction. (20) 21. It is in the light of this role that the Court has held that it has no jurisdiction to give a preliminary ruling where it is quite obvious that the interpretation or the assessment of the validity of a Community rule sought by that court bears no relation to the facts or purpose of the main proceedings, or where the problem is hypothetical, or where the Court does not have before it the factual or legal information necessary to give a useful answer to the questions submitted to it. (21) 22. As regards the last-mentioned case, I would point out that the requirement adequately to describe the legal and factual context of the dispute principally pursues two objectives. 23. First, the information provided in the decision referring the matter for a preliminary ruling must enable the Court to provide an interpretation of Community law which will be of assistance to the national court. (22) 24. It is true that in the present case the order for reference contains little information on the factual and legal background to the main proceedings. A reading of it does not make it clear whether when Mr Kapper was charged with driving without a valid licence his right to drive in Germany was, or was not, still cancelled or restricted following the withdrawal of his German licence. 25. Nevertheless, the information provided in the order for reference has been supplemented, both by the reply from the national court to the request for clarification sent to it by the Court, and by the replies from Mr Kapper and the German Government to the questions put to them in this regard. These make it clear that at the time he was charged in relation to the matters in question he was no longer prohibited from obtaining a new licence (which had been withdrawn for a period of nine months), but apparently continued to be deprived of the right to drive in Germany by reason of Paragraph 28(4)(4) of the FeV. (23) I am therefore of the view that notwithstanding the lacunae in the order for reference, the Court is in a position to provide a useful answer to the question put by the Amtsgericht Frankenthal, Pfalz. 26. Secondly, the information provided by an order for reference must give the governments of the Member States and interested parties the opportunity to submit observations pursuant to Article 20 of the Statute of the Court of Justice. (24) 27. In this case, it is clear from the observations submitted by the governments of the Member States and by the Commission that the information provided in the order for reference has enabled them to comment effectively on the question referred for a preliminary ruling. Moreover, as mentioned above, that information has been supplemented by the reply from the national court to the request for clarification sent to it by the Court. This additional information was referred to in the report for the hearing and made known to the governments of the Member States and other interested parties, either for the purpose of a written answer to certain questions or for the purpose of the hearing. The latter have thus had the opportunity to add to their observations where necessary. 28. I am therefore of the opinion that the question referred for a preliminary ruling by the Amtsgericht Frankenthal, Pfalz, is admissible. 29. However, as Mr Kapper, the German and Italian Governments and the Commission have proposed, the scope of the question referred for a preliminary ruling should be extended to include the interpretation of Article 8(2) and (4) of the Directive in order to provide a useful and complete answer to the national court. 30. I am accordingly of the view that the question referred for a preliminary ruling should be treated as asking whether Article 1(2), in conjunction with Article 7(1)(b), Article 8(2) and (4) and Article 9 of the Directive, should be interpreted as meaning that a Member State is entitled to refuse to recognise a driving licence issued by another Member State on the grounds (a) that according to its investigations, the holder of the licence in question had not taken up normal residence in the Member State in which the licence was issued prior to its being issued, and/or (b) that the holder of the licence is still banned from driving in the first-mentioned Member State following the withdrawal or cancellation of a previous licence, issued in that Member State, coupled with a provisional prohibition on obtaining a new licence there, when both those measures are fully executed and their effects have therefore been exhausted. B – Substance 31. It should be noted at the outset that Article 1(2) of the Directive lays down the principle that ‘driving licences issued by Member States shall be mutually recognised’. 32. As I recently pointed out, these provisions adopt a general approach to the mutual recognition of licences, and do not require that any particular conditions or formalities are met. (25) 33. The Court so held in Skanavi and Chryssanthakopoulos (26) in the context of requirements relating to the exchange of licences. The Court restated the point in Awoyemi, adding that the obligation to recognise driving licences is clear and unconditional and that the Member States have no discretion as to the measures to be adopted in order to comply with those requirements. It follows that the provisions referred to above have direct effect. (27) 34. The point was again made by the Court very recently in Commission v Netherlands, cited above, in the context of a requirement relating to the registration of licences. (28) 35. It is in the light of this principle of mutual recognition of licences, founded on mutual confidence between Member States, that it should be considered whether a Member State is entitled to refuse to recognise a licence issued by another Member State for reasons relating to the residence of the holder of the licence in question or the fact that the latter has had his licence withdrawn or cancelled. 1. The condition relating to the residence of the holder of the licence at the time of issue of the licence 36. Under Article 7(1)(b) of the Directive, a driving licence may only be issued to an applicant who has his normal residence in the territory of the Member State issuing the licence. 37. I agree with Mr Kapper and the Netherlands and Italian Governments that it is the task solely of the Member State issuing the licence to verify that this condition precedent is complied with, in accordance with the criteria set out in Article 9 of the Directive. It follows that where a licence has been issued by a Member State, the other Member States cannot refuse to recognise it on the grounds that in their view this condition has not been met. 38. To accept the contrary, as the German Government proposes, would strike at the heart of the system established by the Directive as well as the principle of mutual recognition, which is its linchpin. 39. As I have already observed in relation to the registration procedure in the Netherlands, the very philosophy of the system established by the Directive consists in laying down common rules for the issue of driving licences and in conferring on the Member State of issue the exclusive power of ensuring that the rules have been met. (29) It is on the basis of this system that the principle of mutual recognition of licences is founded which, it should be borne in mind, is intended to operate automatically, that is to say without any special conditions, formalities or investigative measures, and therefore requires mutual confidence on the part of the Member States. 40. Accordingly, to accept that a Member State is entitled to check that the holder of a licence issued by another Member State has fulfilled the condition as to residence of the holder and that, should the first-mentioned Member State take the view that there has been a failure to comply with that condition, it may refuse to recognise the licence in question, would amount to stripping the principle of mutual recognition of licences of its substance and destroying the mutual confidence which must guide Member States in the matter. 41. Similar considerations led the Court to hold that ‘if a person holds a driving licence issued by a Member State, that should be deemed to be proof that the licence holder has fulfilled the conditions for the issue of a licence provided for in Directive 91/439; the host Member State cannot then require the holder to prove again that he or she actually satisfied the conditions laid down in Articles 7(1)(b) and 9 of Directive 91/439, without violating the principle of mutual recognition of driving licences’. (30) 42. The Court’s analysis is based on the fact that ‘this requirement [of proof] negates the very recognition of driving licences issued by other Member States, because it amounts to rechecking whether the licence holder has fulfilled the conditions for obtaining a licence provided for in Articles 7(1)(b) and 9 of Directive 91/439’. (31) 43. The Court was careful to emphasise in that regard that this requirement meant that the holder of the licence to be registered had to prove something the evidence for which could be extremely difficult to provide owing to the time which might elapse between when the licence is obtained and when the person took up residence in the Netherlands and the distance there might be between the place where the licence holder resided (when the driving licence was obtained) and the municipality in which the licence holder decided to take up residence (in the Member State in question). (32) 44. In my opinion, that which applies to a requirement that the holder of the licence himself must prove as a matter of course that he has met the residence condition referred to above, in the context of a registration procedure with a Member State which did not issue the licence, applies also to the checks or investigations which that Member State would undertake in that regard in order to decide whether to grant or refuse recognition of the licence. 45. Such a process would amount to rechecking whether the holder of a licence issued by another Member State had fulfilled the residence condition laid down by the Directive for obtaining the licence. As the Court has held, the holding of such a licence should be deemed to be proof that the holder of the licence in question has fulfilled that condition. The fact that such proof exists thus necessarily preludes a Member State from disregarding the obligation to recognise a licence issued by another Member State solely on the ground that in its opinion there was evidence which suggested that the condition had not been fulfilled and thus calling into question the reliability of that proof. That is all the more the case as, if such evidence were taken into account by that Member State as grounds for refusing to recognise the licence in question, its holder would ultimately be required to provide evidence once again that he had fulfilled that condition, which, as the Court has held, would also be contrary to the principle of the mutual recognition of licences. 46. I am therefore of the opinion that a Member State is not entitled either to check that the holder of a licence issued by another Member State has properly fulfilled the residence condition laid down by the Directive, or to refuse to recognise the licence in question on the ground that it has taken the view that the holder has not fulfilled that condition. 47. Contrary to what the Commission suggests, I believe that this conclusion also applies where, as is the case in Germany, such checks are not carried out as a matter of course, but are limited to those cases where the Member State concerned had significant doubts as to compliance with the residence condition. 48. Where a Member State has such doubts, it may so inform the Member State which issued the licence by way of an exchange of information under Article 12(3) of the Directive. (33) It should nevertheless be made clear that if the result of such an exchange is that the Member State which issued the licence confirms that the residence condition in question was properly fulfilled, the Member State concerned continues to be required to recognise the disputed licence, even if it is not convinced by the reply it has received. It is thus not entitled to rely on its own checks or investigations into the matter, even if confined to the specific case, to refuse to recognise the licence. 49. That being so, were the host Member State to take the view that the Member State which had issued the licence had carried out inadequate checks into the residence condition in question, it would always be open to the former to bring infringement proceedings under Article 227 EC. 50. In that regard, I am aware that it is possible (although very unlikely) that as a result of an exchange of information the Member State which issued the licence realised that, contrary to what it had believed when the licence was issued, the residence condition laid down by the Directive had not been properly fulfilled. Nevertheless, even in such a case, I believe that a refusal to recognise the licence would still not be permissible. (34) 51. Unlike the Commission, I find it difficult to place the failure of the holder of a licence to fulfil the residence condition in the Member State in which it was issued on the same footing as the situation before the Court in Van de Bijl. (35) 52. In that case, the Court considered the position of a Netherlands national who wished to exercise the trade of a self-employed painter, but was unable to establish that he had the qualifications required to exercise it in that Member State, and who relied in his dealings with the Netherlands authorities on a certificate issued by the United Kingdom authorities which stated that he had carried on that activity in the United Kingdom for a specified period, with a view to being granted permission to carry on the activity concerned in the Netherlands under Directive 64/427/EEC. (36) That directive provided that where, in a Member State, the taking up or pursuit of certain activities was dependent on the possession of certain knowledge and ability, that Member State should accept as sufficient evidence of such knowledge and activity the fact that the activity in question had been pursued in another Member State for a specified period, relying for that purpose on a certificate issued by the authorities of the latter Member State. 53. That condition precedent as to the carrying on of an activity arose in the context of a temporary system of authorisation for carrying on those activities, pending the coordination of national rules relating to the taking up and pursuit of those activities, and the mutual recognition of qualifications. (37) The condition reflected the legitimate concern of the host Member State that it should be satisfied that the person concerned possessed certain general knowledge and ability sufficient to pursue the intended activity, in order to protect the interests of the recipients of that activity. 54. That context explains why the Court held that ‘the competent authority in the host Member State, when it is presented with an application for a licence to take up an activity on the basis of a certificate drawn up by the competent authority of the Member State from which the beneficiary comes pursuant to ... the directive, is not bound to grant the application automatically if the certificate produced contains a manifest inaccuracy inasmuch as it states that the person covered ... has completed a period of professional activity in the Member State from which he comes, when it is clear that during that same period the person in question has pursued his activities in the territory of the host Member State’. (38) 55. In my opinion, that case-law cannot be applied to the situation in the main proceedings. 56. It should be pointed out first of all that the residence condition under the Directive is part of a system of recognition of driving licences, and not of authorisation, which will as a rule exclude all discretion on the part of other Member States than the State of issue as to fulfilment of the conditions for obtaining those licences. 57. Moreover, that residence condition does not reflect needs which are comparable to those applying to the possession of general knowledge and ability, which are intended to protect the interests of recipients of an activity carried on by a self-employed person. However important it may be in the structure of the system established by the Directive, the condition cannot be treated in the same way as an essential condition, such as the passing of certain tests of skills and behaviour and theoretical tests, all of which are prompted by overriding reasons relating to the public interest, as Article 7(1)(a) of the Directive requires. (39) 58. It follows from this reasoning that the parallel suggested by the Commission between the failure to fulfil the residence condition under the Directive which has been found and the situation considered by the Court in the Van de Bijl judgment, cited above, is not relevant in my opinion. That judgment does not therefore call into question my analysis. 59. In my opinion, such a failure does not of itself justify a refusal to recognise the driving licence in question, nor indeed does it justify the withdrawal or cancellation of the licence by a Member State which did not issue the licence (with effects on its own territory). (40) That being the case, if a Member State which issues licences were consistently to fail to meet its obligation to confirm that the residence condition has been fulfilled, the host Member State and the Commission could bring infringement proceedings against the Member State in question under Articles 226 and 227 EC. 60. It is moreover not inconceivable that the Member State which issued the licence might decide that by reason of the irregularity which has been found it should withdraw or cancel the licence, operating a mirror procedure, with the result that the other Member States would plainly not be required to recognise it. 61. I am accordingly of the opinion that the combined provisions of Article 1(2), Article 7(1)(b) and Article 9 of the Directive should be interpreted as meaning that a Member State is not entitled to refuse to recognise a licence issued by another Member State on the ground that in its opinion the holder of the licence in question had not taken up normal residence in the latter Member State at the time when the licence was issued. 2. The effects of a withdrawal or cancellation of a licence issued by a Member State as regards a licence issued subsequently by another Member State 62. The question here is whether a Member State is entitled to refuse to recognise a licence issued by another Member State on grounds other than that considered above, on the basis of measures taken against the holder of the licence in question to withdraw or cancel a licence previously issued by the first Member State. 63. According to Mr Kapper, it is possible that, on the basis of Article 8(4) of the Directive, the German authorities might refuse to recognise the validity in their territory of a licence issued by another Member State so long as a national measure such as a suspension or cancellation of the right to drive for a specified period was in place. However, it is certainly not open to them to do so after that time. 64. Similarly, the Italian Government submits that these provisions are solely intended to secure the application of a criminal penalty, such as the suspension or withdrawal of a licence, so that its holder cannot avoid these by improperly relying on a licence obtained in another Member State. Once the criminal penalty has been executed, the Member State in which it was imposed is no longer entitled to refuse to recognise the licence. 65. According to the Commission, the Directive does not prevent a Member State from refusing to recognise a licence issued by another Member State when its holder has had his national licence withdrawn and the first-mentioned Member State has not reinstated it. It added at the hearing that such a refusal of recognition, based on Article 8(4) of the Directive, could not apply indefinitely, particularly where, at a given time, the person concerned could once more obtain a licence in his home country. 66. Having considered the observations of the parties, I am of the opinion that in circumstances such as those arising in the main proceedings such a refusal to recognise a licence cannot be justified on the basis of either Article 8(2) of the Directive or Article 8(4). 67. As far as Article 8(2) of the Directive is concerned, I note that it provides that where the holder of a valid national driving licence issued by a Member State has taken up normal residence in another Member State, the host Member State may, subject to the observance of the principle of territoriality of criminal and police laws, apply its national provisions on the restriction, suspension, withdrawal or cancellation of the right to drive to the holder of the licence and, if necessary, exchange the licence for that purpose. 68. In my opinion, these provisions of the Directive, which do not apply only to exchanges of licences, (41) cover the situation where the holder of a licence is accused of committing a road traffic offence in the host Member State and where the relevant authorities in that Member State intend to impose on him a penalty by way of restriction, suspension, withdrawal or cancellation of the right to drive, whose effects would be limited to the Member State concerned. (42) 69. This is not the situation in which Mr Kapper finds himself in the main proceedings. 70. When the order was made in Germany for the withdrawal (equivalent to cancellation) of his licence, that punishment applied only to the German licence which he had previously held, before obtaining the Netherlands licence in issue. The question does not arise in the main proceedings whether, under Article 8(4) of the Directive, the German authorities are entitled to order the withdrawal or cancellation of Mr Kapper’s licence once again, this time in relation to his Netherlands licence. The only point at issue is whether the German authorities are entitled to refuse to recognise the validity of the Netherlands licence. As with the residence condition, this question must be answered in the negative. It follows that Mr Kapper’s Netherlands licence must be treated as valid, so that the offence with which he is charged (that of driving without a valid licence) cannot be sustained. As such an offence has not been committed, Article 8(2) of the Directive will not apply to the person concerned. 71. In my opinion, contrary to what the German Government contends, Article 8(2) of the Directive cannot be interpreted as meaning that a host Member State is entitled to refuse to recognise a licence issued by another Member State where, under the national rules (of the host Member State in question) relating to the restriction, suspension, withdrawal or cancellation of the right to drive, the right to drive in that Member State has been removed from the holder of the licence by reason of his previously having been banned from driving (by the authorities of that Member State), even where that penalty has been fully executed and thus ceased to have effect. As will be seen, a broad interpretation of these provisions of the Directive would make Article 8(4) of the Directive redundant. 72. As regards the last-mentioned provisions of the Directive, I am of the view that these should be narrowly interpreted, to mean that a Member State is entitled to refuse to recognise a licence issued by another Member State when the authorities of the first Member State have imposed on the holder of the licence in question a measure which restricts, suspends, withdraws or cancels the right to drive only where such a measure has not been fully executed and its effects have not therefore been exhausted. There are several factors which support such an interpretation. 73. First of all, as the Italian Government observed, it follows from the wording of these provisions (43) that the option open to Member States (to refuse to recognise the validity of a licence issued by another Member State) applies only to the case of a person ‘who is’ in its territory the subject of one of the measures referred to above, which falls to be distinguished from a person ‘who was’ the subject of such measures. The use of the present, and not the past, tense clearly reflects the will of the Community legislature to limit the use of that option to measures removing or restricting the right to drive which are current, that is to say which remain enforceable. 74. It should moreover be noted that the option given to Member States under Article 8(4) of the Directive constitutes an exception to the principle of recognition of licences laid down in Article 1(2). It follows under settled case-law that Article 8(4) of the Directive should be interpreted narrowly. 75. Lastly, it should be pointed out that the purpose of the Directive is to establish a Community model licence and to introduce a system of mutual recognition of those licences without any requirement for exchange, in order inter alia to facilitate the movement of persons settling in a Member State other than that in which they have passed a driving test. (44) The principle of mutual recognition of licences laid down in Article 1(2) of the Directive therefore constitutes the linchpin of the system established by the Directive. For a Member State to be entitled to rely on its national rules to refuse indefinitely or permanently to recognise a licence issued by another Member State would run entirely contrary to this principle. (45) 76. I would also note that it is clear from the second paragraph of Article 10 of the Directive that where a Member State wishes to adopt provisions under its national legislation intended to implement Article 8(4) of the Directive, it must obtain the prior agreement of the Commission. This requirement exists in order to ensure that the proposed national legislation complies with the terms of Article 8(4) of the Directive. For that reason, it is important that such an agreement is expressed in legally binding form, and is not limited to an implicit or informal understanding, as was the case with the German rules at issue in the main proceedings. (46) 77. I am accordingly of the opinion that Article 1(2) and Article 8(4) of the Directive should be interpreted as meaning that a Member State is entitled to refuse to recognise a driving licence issued by another Member State where the authorities of the first Member State have imposed on the holder of the licence in question a measure which restricts, suspends, withdraws or cancels the right to drive only where such a measure has not been fully executed and its effects have therefore not been exhausted. V – Conclusion 78. In light of the foregoing considerations, I propose that the Court should answer as follows the questions referred for a preliminary ruling by the Amtsgericht Frankenthal, Pfalz: (1) The combined provisions of Article 1(2), Article 7(1)(b), Article 8 and Article 9 of Council Directive 91/439/EEC of 29 July 1991 on driving licences are to be interpreted as meaning that a Member State is not entitled to refuse to recognise a licence issued by another Member State on the ground that in its opinion the holder of the licence in question had not taken up normal residence in the latter Member State at the time when the licence was issued. (2) However, a Member State is entitled under Article 8(4) of the Directive to refuse to recognise such a licence where the authorities of that Member State have imposed on the holder of the licence in question a measure which restricts, suspends, withdraws or cancels the right to drive only where such a measure has not been fully executed and its effects have therefore not been exhausted. 1 – Original language: French. 2 – Council Directive of 4 December 1980 on the introduction of a Community driving licence (OJ 1980 L 375, p. 1). 3 – Council Directive of 29 July 1991 on driving licences (OJ 1991 L 237, p. 1) (hereinafter ‘the Directive’). 4 – Article 6 of the Directive. 5 – Article 7(1)(a) of the Directive. 6 – .Ibidem. 7 – Article 7(1)(b) of the Directive. ‘Normal residence’ is defined in Article 9 of the Directive as the place where a person usually lives, that is, for at least 185 days in each calendar year, because of personal and occupational ties, or, in the case of a person with no occupational ties, because of personal ties which show close links between that person and the place where he is living. The article states that the normal residence of a person whose occupational ties are in a different place from his personal ties and who consequently lives in turn in different places situated in two or more Member States is to be regarded as being the place of his personal ties, provided that such person returns there regularly (this last condition need not be met however where the person is living in a Member State in order to carry out a task of a definite duration). 8 – See the second paragraph of Article 10 of the Directive. 9 – .Bundesgesetzblatt 1999 I, p. 2214. The relevant provisions of this regulation have, as regards the main proceedings, been very slightly amended by a regulation of 7 August 2002, which came into force on 1 September 2002. 10 – Paragraph 28(4)(2) of the FeV. Similar provisions were in place under the first paragraph of Article 1(4) of the Verordnung zur Umsetzung der Richtlinie 91/439/EEC des Rates vom 29 Juli 1991 über den Führerschein und zur Änderung straßenverkehrsrechtlicher Vorschriften (Bundesgesetzblatt 1991 I, p. 885, hereinafter ‘the regulation implementing the Directive’). This regulation was adopted on 19 June 1996 and was in force from 1 July 1996 until 31 December 1998 (when the FeV, which replaced it, came into force). 11 – Paragraph 28(4)(3) of the FeV. 12 – Paragraph 28(4)(4) of the FeV. 13 – In German law, the withdrawal of a licence (‘Entziehung’) automatically entails the loss or cancellation of the right to drive and not simply its suspension. Such a measure requires to be coupled with a prohibition on taking out a new licence for a period fixed by the court (a ‘blocked period’). At the end of the blocked period, the person concerned is only permitted to resume driving once he has been authorised to do so by the competent authorities, having passed a number of aptitude tests. 14 – For an illustration, see in particular the order of the Bundesgerichtshof of 20 June 2002 (4StR 371/01, NJW 2002, p. 2330). 15 – See, inter alia, the order of the Bundesgerichtshof cited above (III, paragraph 2). 16 – It followed from the first paragraph of Article 1(4) of the regulation implementing the Directive that the holder of a licence issued by another Member State who had previously had his German licence provisionally withdrawn or who could not obtain such a licence by reason of a final judicial decision was not entitled to drive a vehicle in Germany for so long as this provision applied to him. At the expiry of the period in question, the person concerned could automatically rely in Germany on his licence issued by another Member State. 17 – However, the regulation of 7 August 2002, which came into force on 1 September 2002, made it possible to put an end to the situation where the right to drive was lost. Under Paragraph 28(5) of the FeV, as amended, permission to drive in Germany under a licence issued by another Member State may be granted by the German authorities when the person concerned so requests, provided that the circumstances which led to the withdrawal of the licence no longer exist. These provisions concern specifically the situation where the holder of a German licence has had his licence withdrawn by the German authorities and has subsequently obtained a new licence from another Member State. 18 – This point was stated for the first time in Case 16/65 Schwarze [1965] ECR 877, 886. 19 – See inter alia Case C-415/93 Bosman [1995] ECR I-4921, paragraph 59; Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 38; Case C-153/00 Der Weduwe [2002] ECR I‑11319, paragraph 31, and Case C-318/00 Bacardi-Martini and Cellier des Dauphins [2003] ECR I-905, paragraph 41. 20 – See inter alia Case 244/80 Foglia [1981] ECR 3045, paragraph 21, PreussenElektra, paragraph 39, Der Weduwe, paragraph 39, and Bacardi-Martini and Cellier des Dauphins, paragraph 42. 21 – See inter alia Bosman, cited above, paragraph 61, Case C-437/97 EKW and Wein & Co. [2000] ECR I-1157, paragraph 52, Case C-36/99 Idéal tourisme [2000] ECR I-6049, paragraph 20, and Case C-390/99 Canal Satélite Digital [2002] ECR I-607, paragraph 19. 22 – See Joined Cases C-320/90 to C-322/90 Telemarsicabruzzo and Others [1993] ECR I-393, paragraph 6, and, in particular, the Opinion of Advocate General Gulmann in that case, paragraphs 5 to 21. See also Case C-157/92 Banchero [1993] ECR I-1085, paragraph 6, and Case C-378/93 La Pyramide [1994] ECR I-3999, paragraph 14. 23 – It is not for the Court to take a view on the application of national law ratione tempore. Nevertheless, a reading of the order of the Bundesgerichtshof of 20 June 2002 referred to above suggests that the FeV is applicable to Mr Kapper’s situation, to the exclusion of the regulation implementing the Directive. 24 – See inter alia Case C-67/96 Albany [1999] ECR I-5751, paragraph 40, and Case C-35/99 Arduino [2002] ECR I-1529, paragraphs 28 and 29, and my Opinion in that case, point 30. 25 – See my Opinion in Case C-246/00 Commission v Netherlands [2003] ECR I-7485, point 38. 26 – Case C-193/94 [1996] ECR I-929, paragraph 26. 27 – Case C-230/97 [1998] ECR I-6781, paragraph 41. 28 – Paragraphs 60 and 61. 29 – See my Opinion in Commission v Netherlands, cited above, point 42. 30 – .Commission v Netherlands, cited above, paragraph 75. The complaint against the Kingdom of the Netherlands in that case was that it had instituted a system of compulsory registration of driving licences issued by other Member States, a year after the holder of such a licence had taken up residence in the Netherlands, and had imposed a registration system so cumbersome that it could barely be distinguished from a procedure for exchanging licences. It was cumbersome in particular owing to the fact that the holder of the licence to be registered was required to prove to the Netherlands authorities that during the year in which the licence was obtained he had resided for at least 185 days in the Member State in which the licence was issued or had been enrolled for at least six months at a school or university in that State. 31 – Paragraph 74. 32 – .Ibidem. 33 – See in that regard the Commission interpretative communication on Community driver licensing (OJ 2002 C 77, p. 5, Part II, paragraph C.2). 34 – It is very likely that this situation does not apply in the main proceedings. Nothing in the documents before the Court suggests that the German authorities have exchanged information with the Netherlands authorities as regards the licence issued by the latter to Mr Kapper. Moreover, if, at the hearing, he claimed to have spent eight months in the Netherlands when the licence was issued, and to have subsequently returned to Germany, where he now resides, that information could neither be affirmed nor denied by the Netherlands Government, which was not present at the hearing (nor indeed by the German Government, which was also not present). It is therefore not known whether in fact Mr Kapper did not fulfil the residence condition in question. That being the case, the possibility falls to be considered for the sake of completeness. 35 – Case 130/88 [1989] ECR 3039. 36 – Council Directive of 7 July 1964 laying down detailed provisions concerning transitional measures in respect of activities of self-employed persons in manufacturing and processing industries falling within ISIC Major Groups 23 to 40 (Industry and small craft industries) (OJ, English Special Edition 1963-64, p. 148). 37 – See Van de Bijl, cited above, paragraph 14. 38 – .Ibidem, paragraph 27. 39 – It would appear that that is not the view of the Commission as expressed in its interpretative communication cited above. The consequences of a breach of Article 7(1)(b) of the Directive are the same as those relating to a breach of Article 7(1)(a). 40 – Contrary to what the Commission suggests in its interpretative note cited above (Part II, paragraph C.2.3), it is my view that even if it were agreed that the residence condition laid down by the Directive had not been fulfilled, a Member State is not entitled to cancel, with effects in its territory, a licence issued by another Member State (short of subsequently returning it to the Member State which issued it, so that the latter may proceed to cancel it itself, with consequent effects in all Member States). The effects of cancelling a licence in this way would be largely similar to those resulting from a decision to refuse to recognise a licence. 41 – Contrary to what the order for reference assumes. 42 – See, to that effect, the Commission’s interpretative communication, cited above, Part II, paragraph C.2.1. 43 – At least in the Italian and French versions. 44 – See the first recital in the preamble to the Directive. The importance of the recognition of driving licences has been emphasised by the Court as regards the freedom of movement of workers as well as the freedom of establishment and the freedom to provide services. See Skanavi and Chryssanthakopoulos, cited above, paragraph 23. 45 – I note that that appears to be the effect of the German legislation (the FeV), as currently applied under national case-law. See in that regard points 12 and 13 of this Opinion 46 – Moreover, in accordance with the first paragraph of Article 10 of the Directive, the Commission has already formalised its agreement in the form of a decision (Decision 2000/275/EC of 21 March 2000 on equivalences between certain categories of driving licences, OJ 2000 L 91, p. 1). It will probably do the same with the agreement provided for under the second paragraph of Article 10 of the Directive.

SETHI,J. Leave granted. Partition of India in 1947 resulted in the outbreak of companymunal riots which engulfed some parts of the companyntry, particularly the then united Province of Punjab in Northern India. Human blood flowed in the rivers of Punjab which were the nerve centre of Provinces economy and known for being responsible for the progress, prosperity and welfare of the people. The fire which erupted in Punjab companyld number be companytained by the chilling snowing waters of rivers Jhelam and Chenab and its flames lept over Jammu and Kashmir as well. In the name of religions, their followers and believers let loose the rein of terror, destruction and death. Thousands of Muslims and Hindus were massacred and millions forced to flee from their homes for safety of lives. The Hindus and Sikhs who were forced to leave their birth places on account of tribal riots followed by regular Pakistani aggression in the State were called refugees displaced persons in the main land of Jammu and Kashmir and the Muslims who were forced to become the prey of the companymunal holocaust were termed as evacuees. To protect and provide for the administration of the properties, left over by the evacuees in the State of Jammu and Kashmir, the then Maharaja of the State, in exercise of his powers under Section 5 of the Jammu and Kashmir Constitution Act, 1996, promulgated the Jammu Kashmir State Evacuees Administration of Property Act, 2006 1949 A.D , hereinafter referred to as the Act . It is alleged that with the passage of time, some unscrupulous litigants assisted by dishonest administrators resorted to the destruction and elimination of the properties statutorily entrusted to the Custodian for protection and safeguard. The size and the quantum of the properties is alleged to have been squeezed and reduced leaving to a bare negligible existence. The present appeal demonstrates the shocking and alarming situation prevalent in the State of Jammu Kashmir so far as the properties of the evacuees are companycerned. The facts giving rise to the filing of the present appeal areone Sardar Begum claiming to be the daughter of an evacuee preferred her claim on 1.12.1958, in terms of Section 8 of the Act with respect to shops and buildings existing thereon situated in Rejinder Bazar, earlier known as Urdu Bazar in the city of Jammu. Finding that the applicant was number entitled to the prayer made for restoration of the property because in the intervening period department had spent a huge amount on the reconstruction of the shops and buildings, the Custodian vide his order dated 26th March, 1959 declined her prayer. However, in the ends of Justice and dictates of humanity, the custodian thought it appropriate to grant a sum of Rs.60/- per month to the applicant as maintenance allowance. Not satisfied with the order of the Custodian, Sardar Begum preferred an appeal which was disposed of by the Custodian General on 29th July, 1959 remanding the case back to the Custodian for fresh orders after thorough enquiry on the following points- Whether Ghulam Mohd. evacuee companytinues to be an evacuee or has died as stated by the appellant and companysequently she the appellant becomes the sole heir. Considering the understanding by the Evacuee Deptt with Sardar Begum as stated in the numbere of the Custodian dated 30.9.1958 whether the Evacuee Deptt was justified in companyverting the property to its own use and affecting companystruction on the said land without a proper and prior agreement with the appellant. Since part of the land under shop came under shop came under road widening scheme and companypensation therefor was paid by the P.W.D., it must be ascertained as to whether the companypensation was payable to the appellant as the rightful heir and claimant of the property. In case her absolute rights are established, it would be for the Custodian to decide companyclusively as to what amount she would be liable to pay to the department for the property, as it stands number, before it can be restored to her. While determining the above, it will naturally become incumbent upon the Custodian to give her credit for the incomes received by way of rental as well as companypensation for the period for which the property has companytinued to be in the possession of management of the Custodian. It would also be upto the Custodian to decide the mode of realization of departmental expenditure in case restoration becomes legally imperative in companysistence with the provisions of the Evacuee Property Act. After the remand when the matter was pending before the custodian, the said Sardar Begum executed a Will dated 4th January, 1964 registered on 9th January, 1964 in favour of the appellant describing him as her companysin. He was held entitled to inherit the property of the executor after her death which was detailed to be situated in Kucha General Samunder Khan, Mohalla Dalpatian, and the evacuees property in Rajinder Bazar, Jammu. The application of Sardar Begum pending before the Custodian, after remand, was dismissed for default of her appearance on 23rd July, 1965. It is reported that she died on 13.9.1965. The appellant in companytinuation of the earlier application, filed by Sardan Begum, preferred another application claiming his right over the disputed property. The then custodian Bakshi Om Prakash while disposing of the application on 4.12.1970 numbericed that the property in dispute belonged to one Sultan Khan who had numbermale issue and had only one daughter namely, Hussain Bibi. Hussain Bibi was stated to be having three issues namely, Sardar Begum, Shah Begum and Ghulam Mohammed. Shah Begum and Ghulam Mohammed were stated to have migrated to Pakistan with the result that their property being evacuee property vested in the Custodian. As there was numberclaimant to the property, it was taken over by the Evacuee Property Department and reconstructed. The appellant was held to be having numberrelation whatsoever with the original owner of the property, namely, Sultan Khan. Sardar Begum companyld number Will away the property which had number devolved upon her and vested in the Custodian under the provisions of the Act, at the time of the execution of the Will and her death. The Will was held to be number having any effect on the property which companycededly had vested in the Custodian. It appears that despite the disposal of the application of the appellant on 4.12.1970, another Custodian S.A. Qayum again dealt with the matter and accepted his claim. The appellant was held entitled to 1/4th share of Sardar Begum in that property and to its restoration. He was further appointed as Manager of the remaining 3/4th property of the evacuees with the direction to render proper accounts. In his Order dated 25.9.1972 the Custodian specifically stated that he was dealing with the application of Sardar Begum filed under Section 8 of the Act. He did number numberice the disposal of the application by the Custodian, after remand, by the then Custodian vide his Order dated 4.12.1970. The Custodian found that Hussain Bibi, the daughter of the original owner had died before 1947. She was stated to be having one son namely, Ghulam Mohammed and two daughters, namely, Sardar Begum and Shah Begum. Ghulam Mohammed was held to have become an evacuee. The Custodian found that there was numberhing to show as to whether Ghulam Mohammed had died or left any other heir except Sardar Begum. Fate of Shah Begum also companyld number be ascertained. Sardar Begum was held entitled to 1/4th share of the whole property under Mohammadan Law. As numbericed earlier the appellant was held entitled to the property to the extent of her share. Showing his over-enthusiastic interest in the property, the then Custodian S.A. Qayum addressed a letter to the Secretary General, Government Department on 14.10.71 Annexure P-6 requesting for handing over the possession of Flat No.6 situated in Rajinder Bazar to the appellant because the Flat was under Government occupation being retained for the accommodation of State Secretariat employees who move to Jammu during winter the occasion popularly known as Darbar Move . Not fully satisfied with the order of the Custodian, the appellant preferred an appeal before the Custodian General with prayer for modifying the order directing him to pay the companyt of the companystruction incurred by the Custodian. The Custodian General vide his order dated 29.9.1972 again remanded the case back to the Custodian for fresh enquiry. It appears that after the remand, the then Custodian Shri N.G. Dar dealt with the matter afresh and vide his order dated 18.8.1987 ultimately held the appellant entitled to the whole of the disputed property. He further directed the deletion of the property from the register of the properties of the Evacuee Property Department as a companysequence of the acceptance of appellants application under Section 8 of the Act. Feeling aggrieved by the restoration of the whole of the property, the tenants, who were put in possession of the property by the Custodian preferred a revision petition under Section 30 of the Act before the Custodian General of the State. The then Custodian General M.Parra elaborately dealt with various aspects of the disputes and ultimately set aside the order of the Custodian dated 18.8.1987. The Custodian General, while going through the record referred to a number of applications and statements of Sardar Begum made by her before her death. He found that the property for the return of which the claim was preferred before the Custodian, was the self-acquired property of the maternal grand-father of Sardar Begum, who did number have any dependant. Sardar Begum in her Statement recorded by the Custodian had mentioned that her grand-father had died when she was a child. She was brought up by her grandmother who also died long ago when her statement was recorded by Commission appointed by the Custodian on 26.8.1965. She claimed that being the only heir of the deceased, her mother namely, Hussain Bibi remained in possession of the property. She further stated In disturbances of 1947 when we were fleeing to Sialkot we were attacked. In the attack my brother was separated from me and I was kidnapped and taken to Hira Nagar. From Hira Nagar I was recovered from the house of Dr. Prithvi Raj and brought to Jammu. My brother is missing even since then. Ever since then I have neither heard about him number has any body told me that he is alive in Pakistan. Even since disturbances I am in possession of one house. three shops - property aforesaid, as owner. After that Custodian built shops and flats and I was promised that after its companystructions and keeping it for recovery of companyt of companystruction, the property shall be returned to me. But instead of doing so, the property was included in list of Evacuees property. I have applied for the return of possession which is till under companysideration. I as sole owner of the property am entitled to its return to me. My two shops which were demolished - Sic - were number The Custodian General did number believe the statement of the witnesses produced by the appellant holding that they had numberknowledge about the property or its owner. The will executed by Sardar Begum was found to be shrouded with doubts. The Custodian General further found that there was numberreliable evidence with regard to the other owners of the property, namely Ghulam Mohammed and Shah Begum, who were found to have migrated to Pakistan in the disturbances of 1947. He companycluded- I, therefore, find strong grounds for setting aside the impugned order dated 18.8.1987 of the Custodian and accept the revision petition filed by the applicants. It may also be pointed out here that number-applicant Ghulam Qadir has number companypiled with the orders of the Custodian and even those of the Additional Session Judge who granting the probate as he has number rendered any accounts so far for property which had remained in his managership. In view of the malafide attitude of Ghulam Qadir, I see numberreason to allow companytinuance of managership with him, which is hereby cancelled. The file be companysigned to records after due companypletion. Being deprived of the whole of the property the appellant approached the Jammu and Kashmir Special Tribunal under Section 30-A of the Act. It may be numbericed that the Custodian General and the allottee tenants of the property were arrayed as respondents in the Revision Petition filed by the appellant. His revision was accepted by setting aside the order of the Custodian General and by restoration of the order of the Custodian which was termed to be well reasoned and based upon evidence led by the appellant. The Writ Petition filed by the tenant allottees was dismissed on 21.8.1991 by the learned Single Judge S.S.Kang, C.J of the High Court holding that the petitioners had numberlocus standi to file the writ petition. Finding that the order of the learned Single Judge was against law, as earlier settled by the Jammu and Kashmir High Court, the tenants-allottees filed LPA No.210 of 1991 in the High Court. Realising that the Custodian being deprived of the valuable property and that the rights of the evacuees were jeopardised by the order passed by the Tribunal, the Custodian General and the Custodian of the evacuees property also filed a Writ Petition No.304 of 1994. Both the LPA and Writ Petition have been disposed of by the impugned companymon judgment. The Division Bench of the High Court held that the appellant is number entitled to claim the property which shall companytinue to vest in the Custodian. The tenants were held entitled to remain in possession of the property subject to terms and companyditions which may be fixed by the Custodian General. Assailing the judgment impugned, Shri P.P. Rao, Senior Advocate, appearing for the appellant has submitted that the said judgment is number sustainable and liable to be set aside on the following grounds- That neither the Custodian number the allottee had any locus standi to challenge the order of Jammu and Kashmir Special Tribunal passed in exercise of the powers vested in it under Section 30-A of the Evacuee Property Act Accordingly, the learned Single Judge had rightly dismissed the writ petition filed by the allottee holding that they had numberlocus standi to challenge the order of the authorities under the act That the High Court was number justified to go into the questions of sufficiency of proof with regard to succession of a family and with regard to execution of a Will, or the rights of the survivor and the successor in interest of its executor The High Court companymitted a mistake of law in number relying upon the probate issued by a companypetent companyrt of Jurisdiction in accordance with law applicable on the point and that the appellant had proved the execution of Will beyond any shadow of doubt That the Custodian General companymitted an error of law by going into the questions of fact while exercising revisional jurisdiction under the Act. That the questions of facts based upon rival claims of the parties companyld number be adjudicated by the High Court in exercise of its Writ Jurisdiction. The Act does number supercede the law of succession by which the parties are governed. If the evacuee died any time after the companymencement of the Act, succession to his property, though declared as evacuees property, would devolved upon his legal heirs who are residing and are available in the State of Jammu Kashmir. Alternatively, it has been argued that in numbercase Sardar Begum companyld be held number even entitled to at least 1/4th share in the disputed property. That the Custodian, the appropriate authority under the Act, had on facts rightly held Sardar Begum and the appellant entitled to the property both under Section 8 as well as Section 14 of the Act. The principle underlying Section 14 is deemed to be applicable to the proceedings under Section 8 of the Act as well. Supporting the judgment of the High Court and the Order of the Custodian General G.M. Parra Mr. E.C. Agrawala, the learned companynsel,who appeared for the allottees in occupation of the property submitted that i the application filed by Sardar Begum was number entertainable being barred by limitation ii Sardar Begum failed to show that she had any interest in the evacuees property as she companyld number establish her relation with the evacuee who was the owner of the property at the time of disturbances and partition of the companyntry in the year 1947 and iii that Sardar Begum had been taking companytradictory stands with respect to her claim over the property. She had preferred her claim both under Section 8 as well as Section 14 of the Act which are mutually companytradictory as they deal with different situations. Referring to the prevalent situation in the State, the learned companynsel has submitted that Section 8 is being resorted to by dishonest and unscrupulous litigants with the object of destroying evacuees property and thereby taking away the rights of those for whose benefit the Act was enacted and the Custodian entrusted with the job of protecting their properties. Such persons modus operandi is that they procure one or two casual chance witnesses to prove their false claim for establishing relationship with the evacuee, without placing any document on record to show that the evacuee had died issueless and heirless, while in Pakistan. Sardar Begum and the appellant are alleged to have procured some orders in their favour by misrepresentation of facts and by production of hired witnesses. They are further alleged to have hidden their claim under the veil of secrecy so that the persons who knew the facts companyld number resist their unfounded claim. Mr. Anis Suhrawardy, who appeared for the Custodian General vehemently argued that the scheme of the Act clearly shows that the authorities under the Act were performing dual duties i.e. i they deal with the responsibility of maintaining, managing and protecting the property left over by the evacuee and ii exercising quasi judicial powers companyferred upon them for achieving the objects for which the law was enacted. He has companyceded that frequent resort to Section 8 of the Act is being availed by persons number really entitled to it. To appreciate the rival companytentions of the parties, it would be profitable to refer to the scheme and the relevant provisions of the Act, necessary for the disposal of the companytroversy in this appeal As numbericed earlier the Act was promulgated by the State under the then prevalent companystitution with the object to provide for the administration of evacuees property in the State of Jammu Kashmir by providing mechanism and procedure for its preservation, protection and restoration whenever and wherever needed. Section 2 c of the Act defines the Evacuee to mean - c evacuee means any person, - who, on account of the setting up of the Dominions of India and Pakistan or on account of civil disturbances or the fear of such disturbances , leaves or has, on or after the Ist day of March, 1947, left, any place in the State for any place outside the territories number forming part of India, or who is resident in any place number forming part of Pakistan or in any such part of the territory of the Jammu and Kashmir State as is under the operational companytrol of the Pakistan armed forces, and who for that reason is unable to occupy, supervise or manage in person his property in the State or whose property in the State has ceased to be occupied, supervised or managed by any person or is being occupied, supervised or managed by an unauthorised person, or who has, after the 14th day of August, 1947 acquired by way of allotment or lease or by means of unlawful occupation or lease or other illegal means, any right to, interest in or benefit from any property which is treated as evacuee or abandoned property under any law for the time being in force in Pakistan or any such part of the territories of the Jammu and Kashmir State as is under the operational companytrol of the Pakistan Armed Forces. Section 2 d defines the Evacuee Property is as - evacuee property means any property in which an evacuee has any right or interest whether personally or has a trustee or as a beneficiary or in any other capacity , and includes any property which has been obtained by any person from an evacuee after the 14th day of August, 1947, by any mode of transfer unless such transfer has been companyfirmed by the Custodian, but does number includeany ornaments, any wearing apparel, companyking vessels or other household effects in the immediate physical possession of an evacuee, any property belonging to a Joint Stock Company, the registered office of which was situated before the 15th day of August, 1947, in any place number forming part of Pakistan or any such part of the territories of the Jammu and Kashmir State as is under the operational companytrol of the Pakistan Armed Forces and companytinues to be so situated after the said date Section 3 provides that the Act, the Rules and Orders made thereunder shall have effect numberwithstanding anything inconsistent therewith companytained in any other law for the time being in force or in any instrument having effect by virtue of any such law. Chapter II deals with the Evacuee Property and vesting thereof in the Custodian. Section 4 provides that the Government may, by Notification in the Official Gazette, appoint Custodian General and as many as Dy. Custodian General, Additional, Deputy or Assistant Custodians as may be necessary for the purposes of discharging the duties imposed upon the Custodian General and Deputy Custodian General by or under the Act. Section 5 deals with the vesting of the evacuee property in the Custodian and provides - Subject to the provisions of this Act, all evecuee property situate in the State shall be deemed to have vested in the Custodian - a in the case of the property of an evacuee as defined in sub-clause I of clause c of section 2, from the date on which he leaves or left any place in the State for any place outside the territories number forming part of India b in the case of the property of an evacuee as defined in sub-clause ii of clause c of section 2, from the 15th day of August, 1947 and c in the case of any other property, from the date it has been registered as evacuee property Where immediately before the companymencement of this Act, any property in the State had vested as evacuee property in any person exercising the powers of a Custodian under any companyresponding law in force in the State immediately before such companymencement, the property shall, on the companymencement of this Act, be deemed to be evacuee property declared as such within the meaning of this Act and shall be deemed to have vested in the Custodian appointed under this Act, and shall companytinue to so vest. Where any property belonging to a joint stock companypany had vested in any person exercising the powers of a Custodian immediately before the companymencement of this Act, then, numberhing companytained in clause d of Section 2 shall affect the operation of sub-section 2 but the Government may, by numberification in the Government Gazette, direct that the Custodian shall be divested of any such property in such manner and after such period, as may be specified in the numberification. Section 6 provides that the Custodian may, from time to time, numberify, either by publication in the Jammu Kashmir Government Gazette or in such other manner as may be prescribed, Evacuee properties which have vested in him under the Act. Section 8, with which we are companycerned in the present appeals, provides- Any person claiming any right to, or interest in, any property, which has been numberified under section 6 as evacuee property, or in respect of which a demand requiring surrender of possession has been made by the Custodian, may prefer a claim to the Custodian on the ground - a the property is number evacuee property or b his interest in the property has number been affected by the provision of this Act. Any claim under sub-section 1 shall be preferred by an application made within thirty days from the date on which the numberification was issued or the demand requiring surrender of possession was made by the Custodian Provided that the Custodian may, for sufficient reasons to be recorded, entertain the application even if it is made after the expiry of the aforesaid period On receiving an application under sub-section 2 the Custodian shall hold a summary inquiry in the prescribed manner take such evidence as may be produced and pass an order, stating the reasons therefor, either rejecting the application or allowing it wholly or in part. For the purposes of this section Custodian means the Custodian appointed under Section 4 for any Province of the State. Section 9 deals with the powers and duties of the Custodian General and provides that without prejudice to the generality of the provisions, the Custodian may, for any of the purposes- a carry on the business of the evacuee b appoint a manager for the property of the evacuee or for carrying on any business or undertaking of the evacuee and authorise the manager to exercise any of the powers of the Custodian under this section c enter or authorise any other person to enter on any land or premises to inspect any evacuee property d take all such measures as may be necessary to keep any evacuee property in good repair e companyplete any building which has vested in him and which requires to be companypleted ee improve with the previous sanction of the Government any evacuee property Under Section 10 of the Act, the Custodian further has the power to cancel any allotment or terminate any lease or amend the terms of any such lease or of any agreement on which any evacuee property is held or occupied by any person, whether such allotment, lease or agreement was granted or entered into before or after the companymencement of the Act. However, numberallotment can be cancelled except as provided for in the Rules framed by the Government in that behalf. Sub rule 3 of Rule 14 of the Rules framed under the Act authorises the Custodian to cancel the allotment and evict the allottee, if he is satisfed thatthe allottee has secured the allotment by misrepresentation or fraud or the allottee is in possession of more than one evacuee property of the same kind, that is to say, more than one residential premises, or more than one business premises or more than one industrial premises or the allottee is in occupation of accommodation which, in the opinion of the Custodian, is in excess of the requirement of the allottee either in the State or outside or the allottee or any person numbermally residing with him or dependant on him, has been granted by the Government a plot of land for companystructing a house thereon or the allottee or any person numbermally residing with him or dependant on him, has built a house or otherwise acquired residential accommodation or the allottee has sub-let or permitted any other person to occupy the property allotted or leased out to him or the allottee has obtained gainful employment in a place other than the place where the evacuee propertyd allotted to him is situate or the property is required for any public purpose or the allottee has kept arrears of rent of any three months unpaid or the allottee is using the property for a purpose other than the one for which it was allotted or leased or keeping the property in disuse Chapter III of the Act deals with the Consequences of the property vesting in the Custodian. Section 25 of the Act provides that numbertransfer of any right or interest in any evacuee property, made in any manner whatsoever by or on behalf of an evacuee shall be effective so as to companyfer any right or remedies on the parties to such transfer or on any person claiming under them unless it is companyfirmed by the Custodian General. Under Section 25-A numberproperty to which claim is established under Sections 8 or 14, whether possession thereof has been taken or number by the claimant, can be sold or disposed of in any manner whatsoever without the previous permission of the Government. Section 27 of the Act provides- Where in pursuance of the provisions of this Act the Custodian has taken possession of any evacuee property, such possession shall number be deemed to be wrongful number shall anything done in companysequence thereof be deemed to be invalid or affected by reason only that at the material time the evacuee who had a right or interest in the property had died or had ceased to be an evacuee Section 30 of the Act deals with the rights of appeal, review and revision. Under this Section, any person aggrieved by an order made under Section 8, Section 14, Section 25 or Section 29-A may prefer an appeal to the Custodian, where the original order has been passed by the Deputy or an Assistant Custodian and to the Custodian General, where the original or the appellate order has been passed by the Custodian, an Additional Custodian or an Authorised Deputy Custodian. An appeal is also provided to the High Court against the Order of the Custodian General. However, numberappeal is maintainable in the High Court against the companycurrent finding of the Custodian and Custodian General. Sub-section 4 of Section 30 provides that the Custodian General or the Custodian may, at any time, either on his own motion or on application made to him in that behalf, call for the record of any proceeding under the Act which is pending before, or has been disposed of, by an officer subordinate to him, for the purposes of satisfying himself as to the legality or propriety of his Order passed in the said proceeding and is empowered to pass such order in relation thereto as he thinks fit. However, numberorder under this sub-section can be passed by revising or modifying any order which affects any person without giving such person a reasonable opportunity of being heard. Section 30- A empowers the Minister Incharge of the Evacuees Property Department to call for the record of any proceeding in which any Custodian or Custodian General has passed an order under the Provisions of the Act for the purposes of satisfying himself as to the legality or propriety of any such order and is authorised to pass such orders in relation thereto as he thinks fit. It may be numbericed at this stage that the powers of the Minister Incharge under this Section are presently being exercised by the Jammu Kashmir Special Tribunal. In exercise of the powers companyferred by Section 39 of the Act, the Government has made the Jammu Kashmir State Evacuee Administration of Property Rules 2008, hereinafter referred to as Rules . Rule 15 deals with the procedure in relation to claims under Section 8 of the Act and provides Procedure in relation to claims under section 8 1 An application under section 8 shall companytain full particulars of the property, the nature of the interest or rights which the claimant has in that property and the facts upon which the same is based and the names of the persons, if any, who are interested in the property. The application shall be accompanied by two companyies thereof. It shall be stamped with a companyrt-fee stamp of three rupees and shall be verified in the manner prescribed for the verification of pleadings in rule 15 of Order VI of the Code of Civil Procedure, 1977. The application shall be presented in person or by a duly authorised agent or pleader to the Deputy or Assistant Custodian having jurisdiction or any person authorised by him in writing to receive such applications Notice of the application may be given by the Deputy or Assistant Custodian to any person who in his opinion is interested in the proceedings. If a party making an application fails to appear on the date fixed when the case is called for hearing the Deputy or Assistant Custodian may dismiss the application for default or proceed to decide the application on the materials before him in the absence of the party. Where the application is dismissed under sub-rule 3 , the applicant shall be precluded from making a fresh application on the same facts with respect to the same property. But he may apply within 30 days from the date of the order of dismissal or of the knowledge of such dismissal for an order to set aside the order of dismissal and if he satisfies the Deputy or Assistant Custodian that there was sufficient cause for his number-appearance when the case was called for hearing the Deputy or Assistant Custodian shall make an order setting aside the orders of dismissal upon such terms as he thinks fit and shall appoint a day for proceeding with the application. Rule 16 provides the procedure for restoration of property under Section 14 of the Act. It says- Subject to the provision of this rule, an application under section 14 for restoration of property and inquiry into the claim shall be made in accordance with the provision of rule 15 in so far as they are applicable. A public numberice of such application shall be made in a local daily newspaper at the expense of the applicant The applicant shall before any order for restoration is made produce a No Demand Certificate from the relevant branches of the office of the Custodian A certificate under the proviso to sub-section 1 of section 14 shall be granted by the Government when it is satisfied that the evacuee has returned to his original place of residence for peaceful and permanent rehabilitation and that he is number engaged in any subversive activities Rule 27 provides that all appeals under the Act shall, when they lie to the Custodian, be filed within thirty days of the date of the order appealed against and when they lie to the Custodian General or the High Court, within sixty days of such date. Sub-rule 7 of Rule 27 provides that the provisions of Section 4, 5 and 12 of the Jammu and Kashmir Limitation Act, 1995 shall, so far as they are applicable, apply in companyputing the period of limitation provided in this rule. Rule 29 mandates that all immovable property, taken possession of by the Custodian, shall be recorded in registers in Form Nos. 9 and 10. The aforesaid forms specifically provide a companyumn relating to, Name of the owner with parentage and previous address Cabinet Order No.578 c of 1954 deals with Rules relating to allotment of land to displaced persons, mentioned in the opening part of this judgment as refugees. Regarding locus standi of the respondents to file the writ petition against the order of the Tribunal, Shri Rao has launched a two-pronged attack submitting that the respondent-tenants being number the aggrieved parties had numberright to challenge the order passed against them as they claimed through the custodian and did number have any independent right in themselves. So far as the authorities under the Act are companycerned, it is submitted that they companyld number have preferred a writ petition being a quasi-judicial authority entrusted with the powers of adjudication of rights of the claimants over the property vesting in such authorities. In support of his submissions he has referred to various provisions of the Act and relied upon some pronouncements of this Court. There is numberdispute regarding the legal proposition that the rights under Article 226 of the Constitution of India can be enforced only by an aggrieved person except in the case where the writ prayed is for habeas companypus or quo warranto. Another exception in the general rule is the filing of a writ petition in public interest. The existence of the legal right of the petitioner which is alleged to have been violated is the foundation for invoking the jurisdiction of the High Court under the aforesaid Article. The orthodox rule of interpretation regarding the locus standi of a person to reach the companyrt has undergone a sea-change with the development of companystitutional law in our companyntry and the companystitutional companyrts have been adopting a liberal approach in dealing with the cases or dis-lodging the claim of a litigant merely on hyper-technical grounds. If a person approaching the companyrt can satisfy that the impugned action is likely to adversely affect his right which is shown to be having source in some statutory provision, the petition filed by such a person cannot be rejected on the ground of his having number the locus standi. In other words, if the person is found to be number merely a stranger having numberright whatsoever to any post or property, he cannot be number-suited on the ground of his number having the locus standi. The allottee of a property, under the Act, cannot be held to be having numberright enforceable under Article 226 of the Constitution of India. The scheme of the Act and the rules made thereunder, as numbericed hereinabove, would establish that an allottee of an evacuee property in the State of Jammu Kashmir is a quasi-permanent allottee who cannot be evicted from the premises unless the companyditions specified under the Act and the Rules are shown in existence and has a legal right to remain in possession unless evicted by the custodian under the law. Any action initiated by a person other than the custodian would give such allottee a legal right to defend his possession as an allottee by opposing the claim of the person intending to dispossess him by obtaining orders under the Act which are likely to adversely affect his possessery interests in the said property. Such allottees of the property in the State of Jammu Kashmir have acquired quasi-permanent rights and are entitled to protection of the companystituted authorities and the companyrts. Even though such an allottee does number have a right to the evacuee property as companytemplated under Article 31 of the Constitution, yet it cannot be disputed that he has a legal right to remain in possession under the Act. Section 9 of the Act gives the custodian power to take such measures as he companysiders necessary or expedient for the purposes of administering, imposing or preserving and managing the evacuee property. Section 10 provides that an allotment made by the custodian or a lease granted by him can be cancelled, amended or terminated by him subject to the companydition that the custodian shall number cancel any allotment except as provided under the rules framed by the Government in that behalf. Sub-rule 3 of Rule 14 empowers the custodian to cancel the allotment and evict an allottee only if he is satisfied that the allottee has secured the allotment by misrepresentation or fraud or such allottee is in possession of more than one evacuee property of the same kind or the allottee was in occupation of accommodation which is in excess of his requirement or the allottee or any person numbermally residing with him or dependent on him has been granted by the Government a plot of land for companystructing a house thereon or the allottee or any person residing with him has built a house or the allottee has sub-let the property to some other person or the allotee has obtained gainful employment in a place other than the place where the evacuee property is situated or the property is required for any public purpose or the allottee has kept arrears of rent of any three months unpaid or the allottee is using the property for the purposes other than the one for which it was allotted or leased or is keeping the property in dis-use. Even despite the existence of any of the grounds justifying the eviction, the allottee has a right to be served with a numberice for a period of number less than six months and afforded reasonable opportunity to show cause. The allottee of an evacuee property, therefore, cannot be equated with a companytractual lessee. Having acquired statutory rights, the allottee of the evacuee property cannot be said to be a stranger having numberlocus standi to challenge an order which, if number prevented, is sure to affect his quashi-permanent rights. The scheme of the Act and the Rules made thereunder clearly show that if allotment of a lessee under the Act is cancelled by a statutory authority without companyplying with the companyditions of the Act or the Rules made thereunder, there is a direct invasion of his legal rights companyferred upon him by the Act entitling him to approach the High Court for companyrecting the error of law companymitted by any authority under the Act in order to keep it within the bounds of law. In such a situation, the allottee cannot be held to be asking the companyrt to enforce any fundamental right but only seeking protection of his legal rights which are alleged to be violated without jurisdiction or in direct companytravention of statutory provisions of law. In State of Punjab v. Suraj Prakash Kapur, etc. AIR 1963 SC 507 this Court dealt with the cases of the evacuees from Pakistan who were allotted some land on quasi-permanent tenure. After the allotment, the State Government issued a numberification under Section 14 of the East Punjab Holdings Consolidation and Prevention of Fragmentation Act, 1948 declaring its intention to make a scheme for the companysolidation of the holdings and in 1955 the Consolidation Officer proposed substitution of some other lands of lesser value for the lands allotted to the petitioners. Another numberification was issued by the Central Government acquiring all the evacuee properties. Feeling aggrieved, the allottees filed a petition under Article 226 of the Constitution of India for the issuance of appropriate writ to quash the scheme of companysolidation and the numberification issued under Section 12 of the Act. The writ petition was resisted by the State on the ground that the allottees had numberlegal right to maintain the petition under Article 226 of the Constitution of India. Repelling such a companytention this Court held The existence of a right and the infringement thereof are the foundation of the exercise of the jurisdiction of the companyrt under Article 226 of the Constitution. The right that can be enforced under Art.226 of the Constitution shall ordinarily be the personal or individual right of the applicant. It may be first companysidered whether the respondents had such a right on the date when they filed the petition under Art.226 of the Constitution. They filed the petition on November 9, 1955, i.e., after the Central Government issued the numberification acquiring all the evacuee properties and before it issued the sanad companyferring proprietary rights on the respondents in respect of the land allotted to them. The nature of the interest of a displaced person in the properties allotted to him under the evacuee law has been authoritatively decided by this Court in Amar Singh v. Custodian, Evacuee Property, Punjab 1957 Subhash Chand Rai A2 801 S AIR 1957 SC There, Jagannadhadas, J. speaking for the companyrt after an elaborate survey of the law on the subject came to the companyclusion that the interest of a quasi permanent allottee was number property within the meaning of Art.19 1 f and Art.31 2 of the Constitution. But the learned Judge made it clear that, numberwithstanding the said companyclusion an allottee had a valuable right in the said interest. The learned Judge stated the legal position in the following words at p.836 at p.612 of AIR In holding that quasi-permanent allotment does number carry with it a fundament right to property under the Constitution we are number to be supposed as denying or weakening the scope of the rights of the allottee. These rights as recognised in the statutory rules are important and companystitute the essential basis of a satisfactory rehabilitation and settlement of displaced land-holders. Until such time as these land-holders obtain sanads to the lands, these rights are entitled to zealous protection of the companystituted authorities according to administrative rules and instructions binding on them, and of the companyrts by appropriate proceedings where there is usurpation of jurisdiction or abuse of exercise of statutory powers. It may be mentioned that the learned Judge in companying to the companyclusion numbericed all the relevant Acts on the subject, including the Displaced Persons Compensation and Rehabilitation Act, 1954 44 of 1954 and particularly S.12 thereof. The observations of this Court indicate that numberwithstanding such numberification an evacuee has a valuable right in the property allotted to him, and that the said right is entitled to the protection of the companystituted authorities and the companyrts. A perusal of the relevant provisions of Act 44 of 1954 demonstrates the companyrectness of the said observations. Section 10. Where an immovable property has been leased or allotted to a displaced person by the Custodian under the companyditions published -- a by the numberification of the Government of Punjab in the Department of Rehabilitation No.4891-S or 4892-S, under the 8th July, 1949 or b by the numberification of the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No.8R or 9R, dated the 23rd July, 1949, and published in the Official Gazette of that State, dated the 7th August, 1949, and such property is acquired under the provisions of this Act and forms part of the companypensation pool, the displaced persons shall, so long as the property remains vested in the Central Government, companytinue in possession of such property on the same companyditions on which he held the property immediately before the date of the acquisition, and the Central Government may, for the purpose of payment of companypensation to such displaced person, transfer to him such property on such terms and companyditions as may be prescribed. Section 12 1 If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, beinga purpose companynected with the relief and rehabilitation of displaced persons, including payment of companypensation to such persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a numberification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section. A reference to R.14 6 of the rules made under the Administration of Evacuee Property Act, 1950, will also be useful in this companytext. Under that rule the cusodian has numberpower to make any order after July 22, 1952 cancelling or varying the allotments made, subject to certain exceptions with which we are number companycerned here. The result of these provisions is that under the Administration of Evacuee Property Act, the respondents became quasi-permanent allottees in respect of land allotted to them in 1950. After July 22, 1952, the Custodian ceased to have any authority to cancel or modify the said allotment. After the numberification issued by the Government under S.12 of the Act, so long as the property remained vested in the Central Government, the respondents companytinued to be in possession of the property on the same companyditions on which they held the property immediately before the date of acquisition, that is, under a quasi-permanent tenure. The companytention that on the issue of the said numberification, the respondents ceased to have any interest in the said land is without any foundation. It is, therefore, clear that on the date when the respondents filed the petition in the High Court they had a very valuable right in the properties allotted to them which entitled them to ask the High Court to give them relief under Art.226 of the Constitution. That apart, on February 23, 1956, the Central Government issued a sanad to the respondents companyferring an absolute right on them in respect of the said properties. Though the sanad was issued subsequent to the filing of the petition, it was before the petition came to be disposed of by the High Court. At the time the High Court disposed of the petition, the limited right of the respondents had blossomed into a full-fledged property right. In the circumstances of the case, the High Court was fully justified in taking numbere of that fact. From whatever perspective this case is looked at, it is obvious that the respondents have sufficient interest in the property to sustain their petition under Art.226 of the Constitution. It may further be numbericed in the instant case, that aggrieved by the order of the custodian deleting the property in favour of the appellant herein, the allottees had filed a revision petition before the Custodian General in which the appellant and the Custodian, Evacuee Property had been arrayed as party-respondents which was accepted vide orders of the Custodian General dated 11.2.1989 Annexure P-11 . Before the Custodian General, the appellant herein had raised an objection regarding the locus standi of the allottee. The objection was over-ruled by the Revisional Authority vide its order dated 9.4.1988. The Custodian General further invoked suo moto jurisdiction vesting in him under Section 30 of the Act and allowed the allottees an opportunity to argue the case. The companynsel of the allottees was further directed to assist the authority for proper adjudication of the claim preferred by the appellant keeping in view the interests of the evacuees. After the revision petition was allowed, the appellant herein preferred a further revision before the Jammu Kashmir Special Tribunal wherein besides Custodian General, all the tenants were impleaded as party-respondents. In his revision petition, the appellant never objected to the right of the allottees to invoke the revisional jurisdiction of the Custodian General. When, ultimately, the order of the Custodian General, passed in favour of the allottee was set aside by the Tribunal, the allottees filed the writ petition in the High Court which was dismissed by the learned Single Judge holding that the allottees had numberlocus standi to file such a petition. It appears that the learned Single Judge ignored earlier judgments of the same High Court in Tej Ram Vs. Custodian General and Ors. AIR 1967 J K 8 and Matwal Singh Ors. v. Honble Minister Incharge Evacuee Property Deptt. Ors. 1990 JK Law Reporter 303. Rejecting such an objection, the High Court in Matwal Singhs case Supra dealt with the scheme of the Act and Rules made thereunder and had held The Act was enacted to provide for the administration of the evacuees property in the State and to protect it from being wasted or destroy. Chapter II of the Act deals with the appointment of the authorities under the Act, the evacuees property and vesting thereof in the custodian. Sec.8 provides that any person claiming any right to, or interest in, any property which has become numberified under Sec.6 as evacuee property, or in respect of which a demand requiring surrender of possession has been made, may prefer a claim to the Custodian on the ground that the property was number the evacuee property or that his interest in the property has number been affected by the provisions of the Act. Under sub-sec. 2 of Sec.8 of the Act, the application has to be preferred within 30 days from the date on which the numberification was issued or the demand requiring surrender of possession was made by the Custodian. On receiving the application under sub-sec. 2 , the Custodian is required to hold an enquiry to take such evidence as may be produced and pass an order stating the reasons therein either rejecting the application or allowing it wholly or in part. The rules have been framed under the Act regulating the procedure for restoration or deletion of the property under Sec.14 and Sec.8 of the Act besides the issuance of guidelines by the appropriate authority in that behalf. According to the procedure, admittedly prevalent, a numberification is issued to the general public for filing objections to the claim made with respect to the evacuee property within the time specified. the objection, as and when raised, is required to be decided by the Custodian after holding enquiry in terms of sub-sec. 2 of Sec.8 of the Act. The issuance of the numberice to the general public for raising objections and resisting the claims is intended mainly to protect the evacuee property from being wasted, destroyed or wrongfully taken away on false pretext, pleas and companycocted evidence. The nature of the proceedings intended to be held while disposing of the claim petition are basically of quasi judicial nature requiring proper determination on the basis of the objections raised by any person. The authorities under the Act must be happy and satisfied if some prudent citizens companyes forward to resist the false pleas and claims preferred. The property of the evacuee has to be protected till the Act remains in force and the numbermalcy restored in the State. The person in possession of the property, therefore, has a right to resist the claim with respect to the property in his occupation preferred by any other person either under Sec.8 or Sec.14 of the Act. Once the person in occupation is held to be having a right to oppose the proposed action resulting in his eviction, it cannot be said that he has numberlocus standi to file the petitioner in this Court, if ultimately the order is passed against him by the authorities under the Act. In this case also it is number disputed that the advertisement numberice was issued in the DAILY UJALA inviting objections from all and number debarring the petitioners herein from raising such objections. When the authorities under the Act themselves gave the option to all persons including the petitioners to raise objections it does number lie in their mouth subsequently to say that the petitioners have numberlocus standi to challenge the order passed to their prejudice. The petitioner in the absence of the order of restoration or deletion have a statutory right to remain in occupation of the leased property and cannot be evicted unless the existence of any of the grounds specified under rule 14 framed under the Act, is proved. It may further be pointed out that despite restoration of the property, an evacuee is number entitled to possession in all cases, sec.14-A being one of the exceptions. The judgment of the Division Bench reported in 1984 KLJ 107 was, therefore, passed without reference to the judgment of the Supreme Court and the earlier judgment of this Court and cannot be held to be a good law. The said judgment being in companyflict with the judgment of the Supreme Court, is number-existent and has numbereffect on the present petition. The petitioners are, therefore, held entitled to file the present petition being lessees in possession of the evacuee property. The authorities under the Act are held under an obligation to issue numberices to the lessees-in-possession of the evacuee property, of the applications filed either under Sec.8 or Sec.14 of the Act. This Court has, in Udit Narain Singh Malpaharia v.Additional Member Board of Revenue, Bihar Anr. AIR 1963 SC 786 held that in the absence of a necessary party the writ petition itself is incompetent. It further held that a necessary party is one without whom numberorder can be made effectively and a proper party is one in whose absence an effective order can be made but whose presence is necessary for companyplete and final decision on the question involved in the proceedings. On the basis of various judicial pronouncements, the Court companycluded that in a writ of certiorari number only the Tribunal or authority whose order is sought to be quashed but also parties in whose favour the said order is issued, are necessary parties. Relying upon the judgment of this Court in Udit Narains case supra , the Division Bench of the High Court, vide the judgment impugned, rightly held the allottees being aggrieved persons by the order of the Tribunal were entitled to maintain the writ petition. The order of the learned Single Judge which was bereft of any legal basis was companyrectly held to be number sustainable. We also find numbersubstance in the submission of the companynsel for the appellant that the Custodian General had numberauthority to challenge the order of the Tribunal by filing a writ petition against the order of the Tribunal merely on the ground that it was also exercising the judicial powers under the Act. In support of his companytention he has relied upon a judgment of this Court in Md.Sharfuddin v. R.P. Singh Ors. 1962 1 SCR 239wherein it was held that the Custodian under the Central Act No.31 of 1950 was number a person aggrieved. Looking at the schemes of the Central Act and the State Act we find that the reliance of the learned companynsel on Md.Sharfuddins case supra is misplaced. In that case an Assistant Custodian had passed an order holding that the properties of the appellant were number evacuee properties. The Custodian, exercising his powers under Section 26 1 of the Central Act No.31 of 1950, called for the records of the case and after hearing the appellant dropped the proceedings. Subsequently, the Assistant Custodian Headquarters filed an appeal before the Custodian under Section 24 1 a of the said Act against the order of the Assistant Custodian. In appeal, the Custodian declared share of the brothers of the appellant in the property to be evacuee property and referred the matter for separation of their shares. In the circumstances of the case, the Court held Though for the purpose of companyvenience of management or judicial determination of disputes the Act provides different categories of Custodians, all of them fall within the definition of Custodian in the Act. The Act further provides a hierarchy of tribunals under the superintendence and companytrol of the Custodian-General. It would be anomalous were it to be held that a Custodian would prefer an appeal against the order of a Custodian. The Act does number companytemplate one officer preferring appeals against the orders of another officer. If an Assistant Custodian or a Custodian went wrong in the matter of declaring a property to be an evacuee property, the Act provides that the Custodian or the Custodian-General, as the case may be, before 1956, and the Custodian-General thereafter, may set right the wrong. In the premises the words any person aggrieved in S.24 of the Act can only mean a person whose properties have been declared to be evacuee properties by the Custodian, or a person who moved the Custodian to get the properties so declared or any other such aggrieved person. The words any person aggrieved in the companytext of the Act cannot include any Custodian as defined in the Act. The position under the Act is totally different as is evident from its scheme. The Special Tribunal is the creation of a statute and thus is an independent statutory authority. Orders passed by the Special Tribunal, though affecting the evacuee property or the powers of the custodian under the Act, cannot be rectified or companyrected by any authority under the Act. Finality attached to the orders passed by the Special Tribunal thus directly affects the evacuee property and the powers of the authorities under the Act. If any order passed by the Special Tribunal is, on the face of it, illegal, erroneous, companytrary to the provisions of the Act or the Rules made thereunder and adversely affects the interests of the evacuee, the custodian has statutory obligation and legal right to challenge such order before the appropriate forum. As already numbericed, the scheme of the State Act and the Rules made thereunder companyfer upon the Custodian, the right to hold and manage the property of the evacuee in accordance with the provisions of law. Any order passed by an authority, though under the Act, can be challenged by the Custodian before an appropriate authority for protection of the rights and interests of the evacuee of which he is the protector and custodian, till the property is restored to the evacuee under the Act. The custodian under the Act does number perform only judicial or quasi-judicial powers but is also entrusted with the administration of the property having the rights to deal with it as authorised by Sections 9, 9A and 10 of the Act besides the rules regulating the exercise of such powers. Similarly, we feel that the reliance of the appellant in the case of Syed Yakoob v. K.S. Radhakrishnan Ors. 1964 5 SCR 64 is of numberhelp to him. In that case this Court held that a writ of certiorari can be issued for companyrecting errors of jurisdiction companymitted by the inferior companyrts or tribunals where the orders are passed without jurisdiction or in excess of it or as a result of failure of jurisdiction. A writ can also be issued where in exercise of the powers, companyferred upon it, the companyrt or tribunal acts illegally or improperly. The jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the findings of fact reached by the inferior companyrt or tribunal as a result of the appreciation of evidence should number be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be companyrected by a writ but number an error of fact however grave it may appear to be. The companyrt further held that it was number easy to define or adequately describe what an error of law, apparent on the face of the record meant. Where it is manifest or clear that the companyclusions of law recorded by an inferior companyrt or tribunal are based on an obvious misrepresentation of relevant statutory provisions or sometimes in ignorance of it or may be even in disregard of it or is expressly founded on reasons which are wrong in law, the said companyclusions can be companyrected by a writ of certiorari. It was further held that whether or number an impugned order is an error of law which is apparent on the face of the record, must always depend upon the facts and circumstances of each case and upon the nature and scope of the legal provision which is alleged to have been misconstrued or companytravened. Looking at the scheme of the Act, the Rules made thereunder and the powers companyferred upon the custodian and the fact that Custodian- General was impleaded as a party-respondent before the Tribunal, we have companye to the companyclusion that the Custodian General had a right to challenge the order of the Tribunal by way of a writ petition as he was administrator of the properties and is required to protect the same particularly when various companyments were made about the Custodian General and its powers curtailed by the order passed by the Tribunal. No fault, therefore, can be found with the impugned judgment of the Division Bench holding that the writ petition filed both by the allottees and the Custodians were maintainable and numbere of the writ petitioners companyld be held to have numberlocus standi to challenge the order of the Tribunal, adversely affecting their rights and interests. At this stage we deem it appropriate to deal with the objection of Shri E.C. Agarwala regarding the application of Sardar Begum being barred by time. During the arguments, the learned companynsel appearing for the parties companyceded that Section 8 of the Act has, at present, out-lived its utility and has become redundant. However, Mr.Rao, learned Senior Advocate submitted that as the plea of limitation was number raised earlier, his client cannot be number-suited on that ground at this belated stage. Let us examine the legal aspect of the matter and thereafter its effect on the claim preferred by Sardar Begum. It is number disputed that the Act was enacted to provide for the administration of evacuee properties left over by the evacuees who, on account of outburst of companymunal riots, were forced to migrate either to Pakistan or to Pakistan Occupied area of the Jammu Kashmir. The Act envisaged that because of disturbances and holocaust of companymunal riots some properties may have wrongly been declared as evacuee properties under the Act. Realising such a situation, Section 8 was incorporated entitling persons claiming any right to or interest in any numberified evacuee property to prefer claim to the Custodian on the ground that property was number an evacuee property or the applicants interested in property had number been affected by the provisions of the Act. Under sub-section 2 of Section 8 of the Act such a claim was required to be preferred by an application within 30 days from the date on which the numberification was issued or demand requiring surrender of possession was made by the custodian. The words claim shall be preferred by an application within 30 days unequivocally indicate that the provision was mandatory so far as the period of limitation for preferring the claim was companycerned. However, the proviso to the aforesaid sub-section authorised the custodian to entertain the application after the expiry of the period but only for sufficient reasons required to be recorded Emphasis supplied . In the instant case such an application was filed by Sardar Begum only in the month of December, 1958, admittedly, after about 9 years of the promulgation of the Act. It does number appear as to whether Sardar Begum had also filed an application for companydoning the delay or the custodian had recorded sufficient reasons thereof as mandated by the first proviso to Section 8 2 of the Act. Otherwise also the power to companydone the delay companytemplated under the proviso to sub-section 2 of Section 8 cannot he held to mean to companydone any delay at any time without recording sufficient reasons. The extended period for entertainment of an application under the Section would be a reasonable period depending upon the facts and circumstances of each case. In numbercase such a period can be extended beyond 12 years, the time provided under Section 28 of the Limitation Act totally extinguishing the rights of the owner in the property and debarring him from seeking a relief with respect to that property including its possession in view of Article 142 of the Schedule of Jammu Kashmir Limitation Act totally forbidding the enforcement of claim and the remedy, if any. Learned companynsel appearing for the respondents have submitted, which we have numbericed with distress, that vested interests and unscrupulous litigants are usurping the evacuee properties in the State by filing frivolous and belated applications preferring stale claims under Section 8 of the Act, which are entertained by the authorities without reference to any period of limitation. We hold that there is numberjustification for entertaining any application from a person in the State of Jammu Kashmir under Section 8 of the Act after the lapse of 12 years from the date when the property was declared as evacuee property and vested in the custodian. We further hold that Section 8 of the Act has out-lived its utility and is presently a redundant piece of legislation, still existing on the statute book. The authorities under the Act are directed number to entertain any application under Section 8 of the Act hereafter as it cannot be companyceived that a person whose property was allegedly wrongly declared or vested in the custodian would keep silent for a period spread over five decades. Any such claim preferred hereafter should be deemed to be fictitious, companycocted and malafide, intended to destroy and eliminate the evacuee property to the detriment of the evacuee who may ultimately be restored such property if and when he returns to the State under a valid law in existence, enacted for the purposes. We further hold that the applications under Section 8 which were entertained by the custodian after the period of 12 years and are still pending shall be liable to be dismissed on the ground of limitation. We may, however, clarify that any right or claim preferred and settled under Section 8, though on application filed after 12 years, shall number be re-opened on the basis of this judgment. This judgment shall only be applicable to the pending claims of the claimants and number finally adjudicated by the authorities under the Act. As Sardar Begum is shown to have filed her claim under Section 8 of the Act within the outer limit of 12 years and numberobjection regarding the maintainability of her claim on the ground of limitation was raised,. despite laying down the law, we decline to number-suit her and the appellant on the ground of limitation. The arguments of Mr.Rao that the Custodian General companymitted an error of law by going into the questions of fact while exercising the revisional jurisdiction can be examined and decided in the light of the provisions of the Act companyferring the revisional power upon the custodian and its extent. The revisional powers under the Act cannot be equated with the revisional power of the High Court under Section 115 of the Code of Civil Procedure. A perusal of sub-section 4 of Section 30 of the Act would show that the Custodian General has the power either on his own motion or application made to him in that behalf to call for the record of the proceedings under the Act, for the purposes of satisfying himself as to the legality and propriety of any order passed in the said proceedings and may pass such order in relation thereto as he thinks fit. Sub-section 4 of Section 30 of the Act, therefore, companyfers a wider power of revision on the Custodian General. The power is number hedged or circumscribed. Such power of revision appears to be of wide plenitude to set right any illegal, unfair, unjust or untenable order passed in any proceedings under the Act. In Rajbir Kaur Anr. v. M s.S.Chokesiri Co. 1989 1 SCC 19 this Court held that the scope of revisional jurisdiction depends on the language of statute companyferring revisional powers. Revisional jurisdiction is only a part of the appellate jurisdiction though cannot be equated with that of a full-fledged appeal. Having regard to the language of Section 15 5 of the East Punjab Urban Rent Restriction Act, 1949, it was held that the revisional power under the said Act companyferred powers which included the examination of the legality and propriety of the order under revision, and for that the High Court can, in appropriate cases, re-appreciate the evidence and interfere with the findings of fact. Dealing with another case under the Karnataka Rent Control Act, 1961, where the power of revision under Section 50 of the Act was pari materia the same as in Section 30 of the Act, this Court in Bhoolchand Anr. v. Kay Pee Cee Investments Anr. 1991 1 SCC 343 held The power of revision is number narrow as in section 115 CPC but wider requiring the High Court to examine the impugned order for the purpose of satisfying itself as to the legality or companyrectness of such order or proceeding which enables the High Court to pass such order in reference thereto as it thinks fit. It is clear that the High Court in a revision under Section 50 of the Act is required to satisfy itself number only as to the legality of the impugned order or proceeding but also of its companyrectness. The power of the High Court, therefore, extends to companyrecting number merely errors of law but also errors of fact. In other words, the High Court in a revision under Section 50 of the Act is required to examine the companyrectness of number only findings on questions of law but also on questions of fact. However, the companyrt observed that the revisional powers, even though wide under the Act, must fall short of the appellate companyrts power of interference. In that case the credibility of the oral evidence was assessed in the background of undisputed facts and circumstances and the companyclusions of the High Court, clear on facts, was held to be within the revisional scope under the Karnataka Act. To the same effect are the judgments of this Court in Ram Dass v. Ishwar Chander Ors. AIR 1988 SC 1422, Shiv Sarup Gupta v. Mahesh Chand Gupta AIR 1999 SC 2507 and Mammu v. Hari Mohan Anr. 2000 2 SCC 32. Dealing with a case under the Delhi Control Act this Court in Ram Narain Arora v. Asha Rani Ors. 1999 1 SCC 141 approved the proposition for power of revision in companyrection of errors of law which on occasions would include interference of findings of fact where the right of a party is involved and is intended to be taken away by suppression of certain facts or by misrepresentation of facts. The Court observed It is numberdoubt true that the scope of a revision petition under Section 25-B 8 proviso of the Delhi Rent Control Act is a very limited one, but even so in examining the legality or propriety of the proceedings before the Rent Controller, the High Court companyld examine the facts available in order to find out whether he had companyrectly or on a firm legal basis approached the matters on record to decide the case. Pure findings of fact may number be open to be interfered with, but sic if in a given case, the finding of fact is given on a wrong premise of law, certainly it would be open to the revisional companyrt to interfere with such a matter. In this case, the Rent Controller proceeded to analyse the matter that numberdisclosure of a particular information was fatal and, therefore, dismissed the claim made by the landlord. It is in these circumstances that it became necessary for the High Court to re-examine the matter and then decide the entire question. We do number think that any of the decisions referred to by the learned companynsel decides the question of the same nature with which we are companycerned. Therefore, detailed reference to them is number required. Accepting the narrow interpretation sought to be placed on Section 30 4 of the Act would deprive the revisional authority to give the intended effect of the provisions of the Act. No interpretation can be accepted which defeats the object sought to be achieved by the statute and numberlitigant can be permitted to take the advantage of a wrong order obtained even on facts by misrepresentation or by suppression of material facts. The revisional powers companyferred upon the Custodian General and the custodian under the Act are of wider amplitude which cannot be restricted debarring the revisional authorities from satisfying themselves as to the legality or propriety of the orders passed by a subordinate authority in companyplete disregard to the provisions of the Act and the relevant facts. Any companyclusion arrived without reference to reliable, companyent and admissible evidence, cannot be termed to be a decision arrived on facts. Permitting the revisional authority to pass such order in relation thereto as he thinks fit clearly indicates the extent of the power companyferred upon it which cannot be limited or circumscribed as urged on behalf of the appellant. Learned companynsel appearing for the appellant referred to the judgments of this Court reported in Smt.Rukmani Devi Ors. vs. Narendra Lal Gupta 1985 1 SCC 144 and Chiranjilal Shrilal Goenka v. Jasjit Singh Ors. 1993 2 SCC 507 to urge that the probate granted in favour of the appellant by a companypetent companyrt of jurisdiction is companyclusive of the validity of the Will unless it is revoked and numberevidence can be admitted to impeach it except in proceedings taken for revoking the probate. There cannot be any dispute to the legal proposition that the grant of probate establishes companyclusively as to the appointment of the executor and the valid execution of the Will. However,it does number establish more than the factum of the Will as probate companyrt does number decide question of title or of the existence of the property mentioned therein. If despite admitting the execution of the Will and issuance of the probate, a question arises as to its effect on the property of another person which is likely to be affected, numberhing prevents the authorities under the Act to examine the Will or the probate to that extent. It is established in this case that on 4th or 9th January when the Will was executed and registered respectively, the executant, namely, Sardar Begum had number become the owner of the disputed property. The disputed property at the time of execution of the Will, admittedly, was vesting in the custodian under the provisions of the Act. Her application filed under Section 8 of the Act had been dismissed on 19th March, 1959 and her appeal was allowed by the Custodian General on 29th July, 1959 by remanding the case back to the custodian for inquiry and order on points formulated in the remand order. Before the custodian companyld pass any order, Sardar Begum executed the Will on 4.1.9164 and died on 13.9.1965. It is worth mentioning here that before the death of Sardar Begum, her application which was remanded to the custodian had been dismissed for default of appearance on 23rd July, 1965. In this view of the matter, the executant of the Will had numberright or authority to bequeath a property which did number belong to her. It may further be numbericed that in her Will she had numberhere stated that the executor, the appellant, would be entitled to any interest in the disputed property which was vesting in the custodian at that particular time. The execution of the Will, therefore, neither affected the evacuee property vesting in the custodian number it companyferred any right upon the appellant to pray for its deletion or restoration. The properties bestowed by the Will upon its beneficiary included a house situated in Kucha General Samundar Khan, a single storey pacca house situated at Mohalla Dalpatian, five pacca shops situated in Rajinder Bazar, and two double storey shops and one pacca shop situated in Kanak Mandi, Jammu. The disputed property which vested in the Custodian, at the relevant time, companyprised of four shops with two flats thereon situated in Rajinder Bazar, Jammu. No specific mention is made of such a property. She has referred only to five pucca shops situated in Rajinder Bazar, Jammu. Double storey shops mentioned by her in the Will are stated to be in Kanak Mandi, Jammu, admittedly, a different area, though adjacent to Rajinder Bazar. Accepting the plea of the appellant would amount to authorising a person to execute a Will with respect to any property in which the executant had numberright or interest including the Government property like Secretariat or official bungalows in favour of another person who in turn would rush to the companyrts for the establishment of his title in the property, on the basis of companyferment of title upon him by way of Will. Such a companyrse is neither permissible number legal and in fact is against the public policy. After perusing the Will, allegedly proved to have been executed by Sardar Begam and the probate issued by the Additional District Judge, Jammu, we are of the opinion that neither the Will number probate companyferred any right upon the appellant which he companyld enforce in a companyrt of law or quasi-judicial authority, such as the custodian. In view of such facts it cannot be said that the Custodian General or the Division Bench of the High Court companymitted any mistake of law while dealing with the Will and the Probate, as we have found that by the said Will and the probate, numberright was companyferred upon the appellant to pray for the deletion of the disputed property from the record of the custodian in terms of Section 8 of the Act. The application filed by the appellant on 6.10.1965 cannot be held to be an application in companytinuation of the application filed by Sardar Begum which was, admittedly, dismissed on 23rd July, 1965, obviously, in terms of Sub-rule 3 of Rule 15 of the Rules. For the person aggrieved by such an order, the appropriate remedy is specified under sub-rule 4 of Rule 15 of the said Rules which unmistakably provides that where the application is dismissed under Sub-rule 3 , the applicant is precluded from making a fresh application on the same facts with respect to the same property. He has, however, a right to apply within 30 days from the date of order of dismissal or of the knowledge of such dismissal for an order to set aside the order of dismissal. As numberapplication in terms of Sub-rule 4 of Rule 15 was filed, the Custodian did number get the jurisdiction to deal with the matter on the application filed by the appellant. Despite there being a bar for entertaining the application, the custodian is shown to have entertained the application of the appellant on 6.10.1965, dealt with it for over a period of more than 5 years and ultimately dimissed the same holding that after the death of Sardar Begum the appellant did number acquire any right as Sardar Begum was number the only heir of the property in dispute because the other evacuees who were companysharers were alive and living in Pakistan. It is true that the Act neither supersedes the law of succession applicable to the evacuee number does it companyfer powers upon the authorities under the Act to adjudicate the right to succession of the claimant. If the claim of a person approaching the custodian is undisputed on admitted facts, such a claim may be adjudicated by the authorities in accordance with the provisions of the Act and the procedure prescribed under the rules which envisages the service of a numberice to all companycerned. We have numberdoubt in our mind that the tenants of the property are definitely such persons who have interest in the property and thus being necessary parties are required to be served a numberice before adjudicating the claim of the person approaching the custodian for the relief in terms of Section 8 or Section 14 of the Act. It is evident from the record that when the appellant preferred his claim to the property after the death of Sardar Begum, the then custodian rightly directed him to establish his title in the civil companyrt. Such a direction of the custodian was upheld by the Custodian General later vide his order dated 24.5.1977. Despite the orders of the custodian and Custodian General which had become final, the appellant did number get his title establish in any civil companyrt and instead he preferred claim on the basis of a probate. The probate proceedings cannot be equated with the adjudication of the right to succession by the civil companyrt. In the absence of declaration of his right to succession by a civil companyrt, the appellant was rightly held number entitled to any right to the property vide order of the Custodian General dated 11.2.1989 - Annexure R-11 . After the death of Sardar Begum, under the circumstances of the case, the appellant was number entitled to prefer any claim in respect of a right or interest in the property which had been declined during her life time. The Special Tribunal, therefore, fell in error in allowing the claim filed by the appellant who, on the relevant date, is proved to have numberright or interest in the property. We further hold that even if Sardar Beghum had any interest in the property which companyld be established, the same cannot devolve upon the appellant for the reasons already numbericed hereinabove. We do number agree with the submission of the learned companynsel appearing for the appellant that the custodian on facts had rightly held Sardar Begum and the appellant entitled to the property both under Section 8 as well as Section 14 of the Act. We also do number agree that principle underlying Section 14 is also applicable to the proceedings under Section 8 of the Act as well. Section 8 and Section 14 deal with different situations under distinct companytingencies. Whereas, under Section 8 the claimant to the property has to show that the property declared and vested in the custodian, was in fact, number an evacuee property or his interest in such property had number been affected by the provisions of the Act, the person claiming under Section 14 is such person who became an evacuee within the meaning of Section 2 c of the Act or was a person claiming to be the heir of the evacuee praying for restoration of the property in his favour. Before applying, such person has to obtain a certificate from the Government or from any person authorised by the Government in that behalf to the effect that the evacuee property may be restored to him if he is otherwise entitled thereto. Further he has to submit an affidavit to the effect that the property claimed is number subjudice before any companyrt of law. He has also to produce a certificate granted by the Government to the effect that the evacuee has returned to his original place of residence for peaceful and permanent rehabilitation and is number engaged in any subversive activities. In other words whereas heirs of the evacuee have a right to pray for restoration under Section 14 of the Act, numbersuch right is companyferred upon the heirs of a claimant under Section 8 of the Act. Reasons are obvious, because Section 8 companytemplates the preferring of claim within 30 days of the date of the vesting of the evacuee property in the custodian which does number envisage the claim by a legal heir whereas application under Section 14 can be preferred at any time when the evacuee returns back to the State of Jammu Kashmir. It may further be numbericed that the legal heirs companytemplated under Rule 14 are such heirs which an evacuee has, meaning thereby the heirs who had also become the evacuee or became his heir outside the State of Jammu Kashmir, having interest in the property by operation of law. To simplify the position it can be said that any person who himself did number become an evacuee within the meaning of Section 2 c cannot prefer a claim on behalf of an evacuee on the ground of becoming his heir with the lapse of time. Conferment of rights upon the persons living in the State of Jammu Kashmir with respect to the property of an evacuee would defeat the very purpose of the Act, particularly the one intended to be achieved by Section 14. The aforesaid section was enacted to encourage such persons who were forced to leave their homes, to companye back and settle and become the part of the mainstream of the political life in the State of Jammu Kashmir. It may number be out of place to mention that the Constitution of Jammu Kashmir itself has made provision for such people reserving almost one fourth of the Legislative Assembly seats for them which can be filled up only when they become a part of the mainstream of the socio-political-economic life of the people of the said State. In view of our findings that the allottees lessees of the evacuee property are necessary parties to the proceedings initiated either under Section 8 or Section 14 and the custodian under the Act performs dual duties of administering the property and adjudicating the claims over the evacuee properties under the Act, we find numberfault with the judgment impugned holding that both the allottees as well as the Custodian General had locus to challenge the order of the Special Tribunal. The scope of revisional power under the Act is wider than the powers exercisable in revision petitions filed under the Code of Civil Procedure or the Code of Criminal Procedure and in appropriate cases the revisional authority can go into the questions of fact to decide the legality and propriety of the action taken and for the purposes of giving appropriate directions. While exercising the revisional jurisdiction, in the present case, the Custodian General had number companymitted any error of law by lookiing into the facts for the purposes of ascertaining as to whether appellant had acquired any interest on the basis of the Will executed by Sardar Begum or the probate issued in his favour. The questions of title with respect to the evacuee property cannot be adjudicated under the Act for which appropriate proceedings are required to be instituted in the civil companyrt. It is further held that with the passage of time Section 8 of the Act has out-lived its utility and has become redundant.

Lord Justice Rix : The appellant, Thinc Group Ltd ("Thinc"), recruited the respondents, Mr and Mrs Armstrong, to join them as self-employed advisers in the provision of financial services under a contract for services. To induce them to join the company after operating independently for many years in building up their own business, Thinc offered the Armstrongs a so-called "disturbance allowance" or "supplemental payment" based on (50% of) the Armstrongs' last year's gross income. In effect, this payment was to compensate the Armstrongs for bringing to Thinc their client base of 10,000 clients and the prospect of recurring as well as new commissions from that clientele. Although the contract between Thinc and the Armstrongs was not so expressed, in commercial terms Thinc was buying the goodwill of the Armstrongs' business. The supplemental payment concerned was £243,052. In the protracted negotiations between the parties, the Armstrongs wished to be assured in the clearest terms, and repeatedly so, whether any and if so what conditions might be attached to this payment. Were there any conditions under which it might have to be repaid? In the main the negotiations were conducted orally, between Ashley and Helen Armstrong on the one hand and, for Thinc, Mr Nicholas Boyle, at the relevant time its commercial director with particular responsibility for recruitment, and Ms Julie Martin, then director of area recruitment and development manager in Northern Ireland. However, there is some contemporaneous written record of the negotiations. At one point, Helen Armstrong sent an email to Ms Martin dated 23 August 2007, on the eve of a meeting the following day, listing questions she and Mr Armstrong wished to know the answers to. One of the questions was: "Upfront payment – are there any conditions?" Mrs Armstrong wrote the answers to the questions on to her copy of the email which she brought to the meeting. The answer to that question was "Stay 3 years only". Mrs Armstrong's evidence at trial was to that effect. She said (at para 23 of her witness statement): "I checked this payment repeatedly with both Julie Martin and Nick Boyle and was told that the only stipulation was that we had to remain with the company for three years. However, this was not a worry as one of my drivers for even considering this further was the Adviser Annuity Scheme, which I could not access for 3 years so I did not want to move on. I wanted any move at that stage to most definitely be my last one." Mr Armstrong gave similar evidence. There was no evidence to the contrary from Ms Martin and Mr Boyle. Indeed, they were witnesses on behalf of the Armstrongs. And so the judge, HH Judge Stephen Davies, sitting as a judge of the high court in the Liverpool mercantile court, found as a fact (at para 63(2) of his judgment) that – "Mr Boyle and Ms Martin, knowing all this, intended to and did re-assure the defendants by stating that the only condition for the [Armstrongs] to retain the supplemental payment was that they stayed with [Thinc] for 3 years (emphasis added). That, as I have said, amounted to a clear statement that [Thinc] would not be able to recover the supplemental payment unless the [Armstrongs] terminated the principal contract." The judge went on to hold that these assurances were a collateral warranty which prevented Thinc from recovering the payment when, within the three years, Thinc gave notice to the Armstrongs terminating their service contract. Thinc now appeals against that judgment, submitting that it was unfair and wrong. It was unfair, submits Mr Gavin Kealey QC on behalf of Thinc, because the collateral warranty was neither pleaded, nor the subject of evidence, nor the subject of submission. The first that Thinc knew of it was in the judge's judgment. It was wrong because no such assurance was ever given or understood in those terms, and it followed that there could have been no reliance on it. If any such assurance was given, it meant no more than the written contract between the parties provided, namely that the payment was repayable if for any reason at all, including Thinc merely serving notice of termination without cause, the parties parted company. The question on this appeal is whether those submissions are correct. The parties and their negotiations Thinc is the claimant in these proceedings. It carries on business in the financial services sector. It is part of the Bluefin Group, which is itself a subsidiary of the AXA group, one of the largest insurance companies in Europe. It trades under the name of "Bluefin". In 2007 and 2008 Thinc was seeking to build up its presence by recruiting independent financial advisers, to be known as self-employed members of its "national adviser team". The judge referred to this as a period of "aggressive growth". The Armstrongs were at that time a married couple in their late fifties who were both financial advisers of considerable experience, established over some two decades. They had successfully built up their own financial adviser business. They operated their business through a company which they had renamed Paradigm Wealth Management Limited ("Paradigm"). They were, however, seeking to commit less of their time and effort to Paradigm. Mr Armstrong wished to devote more of his energies to a finance and property consultancy business he had recently created. Mrs Armstrong was about to become a grandmother twice over. Mr and Mrs Armstrong were both beginning to look forward to their retirement. The judge found: "They believed, and their belief was shared by [Thinc], that they had a valuable asset in their client base which [Thinc] would be interested in securing, both because of the servicing rights and the prospect of new business from the existing client base. So far as the latter was concerned, it is common ground that there was a specific discussion about [Thinc] appointing employed representatives to assist the [Armstrongs] in securing new business from the existing client base, on the basis that the [Armstrongs] would still receive a percentage of the commission obtained on any such new business. The [Armstrongs] were also interested in an adviser annuity scheme promulgated by [Thinc] under which there was a prospect of the [Armstrongs] receiving annuity payments on their retirement." Mr Boyle and Ms Martin of Thinc began their courtship of the Armstrongs in 2006. Then, and again in early 2007, they attempted unsuccessfully to persuade them to join Thinc's wealth management division. In the summer of 2007, they tried again, using for the first time the inducement of a substantial introductory payment. It was important to the Armstrongs to know what if any strings might be attached to such a payment. For instance, since it reflected the purchase of the goodwill of the Armstrongs' client base, could it be recouped if that client base produced too little income? The Armstrongs were repeatedly assured there were no minimum income requirements, and that the only condition was that they stay with Thinc for three years. The Armstrongs were pressurised to put in their applications before the end of August 2007 with the prospect that otherwise the supplemental payment was being reduced. Even after the applications were submitted, the Armstrongs continued to seek these reassurances against the background that they wanted Thinc to understand that they were seeking a route to retirement, not to renewed commitment. They were assured that not only Mr Boyle and Ms Martin knew of their plans, but that that was so of Thinc's other senior managers and board. The judge accepted the Armstrongs' evidence that they would not have signed the contract had they not received such assurances from Thinc. The judge concluded that it was clear from their evidence that the assurances regarding the absence of minimum income requirements and the absence of any conditions for repayment of the supplemental payment went together. I have already referred to the confirmatory evidence to be obtained from Mrs Armstrong's email of 23 August 2007, with her manuscript addition of "Stay three years only" to the question "Upfront payment – are there any conditions?" That was the answer given at the meeting on 24 August. On 29 August 2007 Ms Martin wrote to the Armstrongs to confirm the "broad outline of our proposed offer", setting out the salient terms of the proposals. Reference was made to the disturbance allowance and how it was calculated, but nothing was said about any liability to repay it. The matter of any minimum income requirements assumed importance by the time of trial, because on 19 June 2009 Thinc had issued a termination notice to the Armstrongs, purporting to terminate their contracts on notice (ie not for cause), but giving as its reason ("The reason for our decision") the suggestion that "your issued production" for the first few months of 2009 (up to April/May, but inaccurately stated to be 2008) "falls considerably below our standards required". Among many other issues at trial was whether Thinc was entitled to do that, or had repudiated its contract. There was a counterclaim by the Armstrongs against Thinc. Mr Boyle and Ms Martin gave evidence for the Armstrongs against their former employer Thinc. In his first witness statement, Mr Boyle said this: "Although [Thinc] had no minimum income standard at the time of recruitment, i.e. specific levels of business to be written at the time of recruitment, the anticipation was that even if there was there would be a sufficient level of recurring income to cover this (the minimum standard being suggested was £50k per adviser and the recurring income was £168,000 between the [Armstrongs]. This point was raised on a number of occasions by the [Armstrongs] as it was a major issue for them and confirmed by myself and Julie Martin." Ms Martin gave the same evidence. Mr Boyle also said (in his second witness statement): "I also discussed with the [Armstrongs] that the contract required advisers to remain with the company for a minimum of three years and this fitted very well with the [Armstrongs'] plans to retire over the next 3 to 5 years." Neither he nor Ms Martin were cross-examined about this. Mr Boyle was cross-examined about minimum income requirements. He said that he believed that since 2003 Thinc's rules required a certain production level to be achieved, which he understood was £50,000 per annum but that this rule had never been used to justify termination. However he said in re-examination that he had no real knowledge of the position contractually. That was confirmed by Ms Martin who explained that she had more familiarity with the details, while Mr Boyle was more interested in the bigger picture. She confirmed that there were no minimum performance requirements, but she was aware that there were ongoing discussions at board level about introducing some, and that the figure then under discussion was £50,000. She said that she had told the Armstrongs that this was a possibility, and this chimed with the Armstrongs' evidence that "there were no minimum requirements, but that it could be notionally £50,000 issued business (the definition of which included new business and recurring income)." Thus the evidence of the Armstrongs and of Mr Boyle and Ms Martin was essentially consistent on these themes. The judge set out his conclusions as to pre-contractual discussions in these terms, at his para 57: "In short, even though it is not supported in every particular by Mr Boyle and Ms Martin, nonetheless I accept the [Armstrongs'] evidence and find that (1) in the course of lengthy discussions with Mr Boyle and Ms Martin they were open about their plans, and in particular their intention to spend less time on their financial adviser business, which inevitably would result in their writing less new business in the future; (2) despite this, Mr Boyle and Ms Martin were still very keen to sign the [Armstrongs] up as national advisers, because [Thinc] was extremely interested, based on the figures provided by the [Armstrongs], in taking over the existing client base and the servicing rights associated therewith; (3) the [Armstrongs] specifically and repeatedly raised with Mr Boyle and Ms Martin the questions of what conditions were attached to the supplemental payment, and whether there was any minimum [performance] obligation, whether for new business or generally, in circumstances whereby Mr Boyle and Ms Martin must have known that the [Armstrongs] regarded these issues as being of great importance to their ultimate decision; (4) so far as the former was concerned, they were repeatedly assured in terms by Mr Boyle and Ms Martin that the only condition was that the [Armstrongs] should stay with [Thinc] for 3 years; (5) so far as the latter was concerned, they were assured that there was no formal minimum performance requirement, but that there was a proposal to bring in a minimum performance requirement, with the figure currently under discussion of £50,000 but that this was not a contractual requirement and would include repeat income from business already written as well as new business; (6) all parties considered that, based on the [Armstrongs'] pre-existing repeat income figures, they should have no difficulty in meeting that minimum performance requirement." There was no evidence to the contrary from Thinc, for the Armstrongs and Mr Boyle and Ms Martin comprised all four parties to the negotiations. The judge also said this about the witnesses before him: that his impression was uniformly favourable, and that they all came across as honest and truthful witnesses, largely seeking to assist the court as best they could rather than seeking to promote their own case or that of their employer or to pursue private grievances. As for Mrs Armstrong, the judge said this: "Mrs Armstrong came across to me as an impeccably honest, knowledgeable, convincing and reliable witness…She was perfectly willing to accept points made to her in cross-examination where she considered them to be well-founded, and did not seem to me to seek to embellish her evidence to support her case." Of Mr Armstrong, the judge said: "Overall I formed a very favourable impression of Mr Armstrong as well, and I repeat my overall assessment of Mrs Armstrong so far as he is concerned." The contracts The difficulty in the case arose from the fact that the contracts entered into by the Armstrongs were not in line with these assurances, for the contracts purported to give Thinc the right to terminate the contracts at any time on notice without cause and specifically provided that if for any reason the contracts were so terminated within three years, then the supplemental payment was repayable. Since Thinc's primary claim in these proceedings was for the repayment of the supplemental payment, it was of the essence of that claim that Thinc should be able to say that the contracts superseded the assurances given to the Armstrongs by Mr Boyle and Ms Martin, and that the Armstrongs should not be able to say that the assurances superseded the contracts as warranties collateral thereto. I put the structure of the argument, not the burden of proof. There were in all three contracts. The first in time, which I shall call the "principal contracts" were addressed to Mr and Mrs Armstrong separately. The second in time, which I shall call the "supplemental contract" (dealing with the supplemental payment), was addressed to Mr and Mrs Armstrong together. The judge used similar expressions to describe the contracts. Although the Armstongs' applications, on Mr Boyle's and Ms Martin's urgings, were submitted at the end of August 2007, nothing happened for a while thereafter. The primary contracts were signed on 6 March 2008, and the supplemental contract was forwarded to the Armstrongs on 21 April 2008 and signed some time thereafter but before 25 April 2008. The judge made findings about the reason for these delays. Matters were first put on hold because Mrs Armstrong was fully occupied with the birth of the two grandchildren. For that and other logistical reasons the Armstrongs were unable to attend an induction programme arranged for new advisers until January 2008. Then full FSA authorisation had to be arranged. FSA approval did not arrive until early April 2008, and the judge found that the contract did not come into effect until then. The further delay until the forwarding of the supplemental contract was because Thinc was working through the process of confirming the Armstrongs' turnover for the purpose of calculating the supplemental payment. The judge added (at para 50): "What is important for present purposes is, as I find, that at no time from late August 2007 to early March 2008 were there any further negotiations or discussions in relation to the principal contract, save that, as the [Armstrongs] said in their witness statements, there was a further meeting with Mr Boyle, apparently in December 2007, where they were assured that there was no problem." The principal contracts were headed "Your Registered Individual's Contract with Thinc". The contracts were eleven single spaced pages long, plus a number of schedules. They contained no performance requirements or targets. On the contrary, clause 2.2 stated that "You will not be obliged to undertake activity in relation to your Business, for example by giving advice or making sales, but, if you do, you must do so in accordance with this Contract and the general law." However, any such activity had to be performed exclusively for Thinc and under its name, and the rewards for such activity were spelled out in a schedule. Clause 6, headed "Duration and Termination", provided for (1) termination on three months' notice by either party; (2) automatic termination in the case of standard events such as insolvency; (3) summary termination by Thinc for cause, such as breach of warranty. Clause 6.4 stated that "On termination, whatever the reason and whichever party terminated the Contract", the provisions of Schedule 1 would apply. Nothing in either clause 6 or in Schedule 1 said anything about the return of the supplemental payment. However, following termination for whatever reason, there were restrictive covenants curtailing what the Armstrongs could do for a period of 12 months, such as soliciting any Thinc customer, save for the Armstrongs' prior clientele, ie "Adviser's Clients on Joining". Clause 9.3 provided for an acknowledgment by the Armstrongs that they had "relied on no representations in entering into this contract except for any written representations that are appended to it". By the end of the trial, however, Ms Muth, who had appeared on behalf of Thinc, accepted that this was not the equivalent of an "entire agreement" clause (see the judge's judgment at para 35). I understand from that a concession that clause 9.3 did not exclude the possibility of a collateral warranty. It was not submitted on appeal that it did. The supplemental contract was headed "Supplemental Offer for Helen & Ashley Armstrong". It provided as follows: "1. Relationship with Your Thinc Group Limited Contract ... 1.3 The terms of this letter (your "Supplemental Offer") will, if you accept it, be incorporated in your Thinc Group Limited Contract. Except to the extent that your Supplemental Offer expressly provides otherwise, its terms will supplement, but not derogate from, Thinc Group Limited's rights under your Thinc Group Limited Contract. 2. Amount and Timing of Supplemental Payment 2.1 Your Supplemental Payment will be £.243,052.00 2.2 It will be payable to you in a single instalment no more than 30 days after you enter into your Thinc Group Limited Contract. 2.3 If any of the events which would cause the first Supplemental Payment to become repayable (see in particular 4 below) occur before it is paid to you, it [will] cease to be payable to you. 3. Supplemental Payment to be Non-Repayable if You Stay With Thinc Group Limited Subject to the following provisions, Thinc Group Limited does not intend to ask you to repay your Supplemental Payments. 4. Repayment Events 4.1 If any of the following events ("Repayment Events") occurs within three years of the date on which Thinc Group Limited has made your first Supplemental Payment (the "Write Off Period"), the first Supplemental Payment will be repayable. 4.2 The Repayment Events are: (a) termination of your Thinc Group Limited Contract, or notice to terminate it having been given, whatever the reason for termination or notice, and whether you, or Thinc Group Limited, terminated your Thinc Group Limited Contract or gave notice to do so; and/or (b) any event which gives, or would give, Thinc Group Limited the right to terminate your Thinc Group Limited Contract, whether or not Thinc Group Limited exercises that right; and/or (c) you (and if you are a company or partnership any of your directors or partners), selling any financial product or service in competition with, or of the same kind as, any sold by, or by any person on behalf of, or marketed by or through, Thinc Group Limited; or you (and if you are a company or partnership any of your directors or partners) being involved in the management or direction of any person or business that sells any such financial product or service. 4.4 For the avoidance of doubt, if a Repayment Event occurs, repayment will be due without Thinc Group Limited's having to make any demand. 4.5 If a Repayment Event occurs and, for whatever reason, Thinc Group Limited is not promptly repaid and/or takes no action to secure repayment: (a) this will not prejudice Thinc Group Limited's right to repayment in respect of either the Repayment Event in question or any other; (b) passage of time will not extinguish the right to repayment; (c) inaction on the part of Thinc Group Limited will not prevent the charging of interest under 4.6 below. For the avoidance of doubt, in order to be effective, any waiver must be in writing, signed by a director of Thinc Group Limited. 4.6 On the occurrence of a Repayment Event, the first (And, if at the time of the Repayment Event it has been made, second) Supplemental Payments, plus a sum equal to interest at the rate of 6% per annum, in relation to each Supplemental Payment, added daily (but compounded annually) as from the date on which the relevant Supplemental Payment was made to you, will immediately be treated as a debt under your Thinc Group Limited Contract; and, in particular, interest will immediately begin to be charged on the relevant balance, under the terms of your Thinc Group Limited Contract." Thus, under this clause, a Thinc adviser such as Mr or Mrs Armstrong may become liable to repay their supplemental payment, together with interest, even if Thinc chooses for any or no reason to give notice without cause to terminate the contract (clause 4.2(a)); and even if Thinc, having a right to terminate the contract (query with cause or merely on notice?), does not do so (clause 4.2(b)); and even without making any demand for repayment (clause 4.4); and even if some company or partnership colleague in error or ignorance sells some service "of the same kind" as sold by any person on behalf of Thinc (clause 4.2(c)); and even if (subject I suppose only to a six year limitation period) Thinc does nothing whatsoever to reclaim the supplemental payment (clause 4.5): as long as any of these repayment events (many of which may occur silently and without anyone noticing anything) occurs within three years of payment of the supplemental payment. Moreover, the right to repayment arises in all these circumstances, even though the commercial logic of the supplemental payment is that it is payment for the goodwill of the joining adviser's clientele, as well as for the novation to Thinc of the right to receive commissions recurring on past business transacted by the joining adviser for such clientele. One of the issues at trial was whether clause 4 of the supplemental contract was a particularly unusual or onerous clause which could not be said to become part of a contract unless the party seeking to include it has done sufficient fairly to bring it to the attention of the other party, under the doctrine of Interfoto Picture Library v. Stiletto Visual Programmes [1989] QB 433. The judge, who cited the clause in his judgment only down to clause 4.2(a), said that however commercially unwise it would be to agree such a clause (which, however, is not I think the point of the Interfoto doctrine), it could not conceivably be said that the clause fell within the doctrine (at para 76). There is no appeal from that holding, and so I accept that the clause is not within that doctrine. However, in dealing below with Thinc's submission that the assurances given to the Armstrongs should be regarded as consistent with rather than as superseding the terms of the supplemental contract, I consider that the court is entitled to have regard to the business sense of the arrangements as a whole. In that connection, I am puzzled that there appears to be nothing within either contract about the delivery of the Armstrongs' existing client base to Thinc as part of their contractual arrangements. It was common ground at trial that this was part of the essential logic of the transaction, and that as part of it there had to be a "novation" of rights to an income stream which product providers owed to the Armstrongs and the Armstrongs were now agreeing to cede to Thinc. The judge referred to this early in his judgment: "10. It is common ground that [Thinc] was particularly interested in the [Armstrongs'] substantial existing client base (amounting to some 10,000 clients). This was of interest to [Thinc] not only because it represented a pool of potential repeat business, but also because the [Armstrongs] enjoyed contractual rights to payment of recurring initial commissions, and of renewal and trail commission, from particular financial services product providers where their clients had, acting on their advice, purchased relevant products from those providers. It was agreed that the [Armstongs] should transfer their rights to this future income ("servicing rights") to [Thinc] and, in order to make this effective, that [Thinc] should undertake the administrative process of procuring the providers to effect the transfer of those servicing rights." Servicing rights are referred to in clause 8 of the principal contracts, but only in the context of post termination consequences. It follows that I cannot find where an essential aspect of the overall arrangements between Thinc and the Armstrongs was dealt with in the contractual documents; and that is both a matter of concern to me, but also seems to reflect a situation where the whole transaction between the parties was not committed to writing and was not to be found in the signed contracts. Be that as it may, there seems to be no doubt that it was the essence of the contract which Thinc submits that it made with the Armstrongs that it would obtain the Armstrongs' client base and rights to a commission stream and would be entitled at one and the same time (a) to retain both even after termination and (b) to recover the supplemental payment after termination, provided it merely gave notice to terminate (without need for any cause) within three years (or provided that any other repayment event occurred within those three years). One of the issues raised by the Armstrongs at trial under their counterclaim was that Thinc was obliged to "re-novate" their client base and/or the servicing rights back to them: but the judge rejected that submission as being utterly inconsistent with the principal contract (at para 35) and there is no appeal from that. It will have been observed from the chronology of the negotiations and contracts referred to above (ie negotiations completed by late August 2007, principal contracts signed on 6 March 2008, and supplemental contract signed towards the end of April 2008), that the transaction was long drawn out, and, in particular, that it is understandable, if the Armstrongs did not read the supplemental contract carefully, that they failed to realise the flaw in these arrangements regarding the supplemental payment. The principal contract may have said that Thinc was entitled to give three months notice at any time, but it said nothing about the supplemental payment. The supplemental contract may have spoken of repayment events, but it did not contain the basic clauses regarding termination. Moreover, clause 3 of the supplemental contract stated in bold lettering that "Supplemental Payment to be Non-Repayable if You Stay With Thinc Group Limited". Thereafter the supplemental contract had to be read carefully, together with the principal contract, to realise what absurdly broad rights to repayment the supplemental contract purported to give to Thinc despite that bold lettered rubric. In this connection an issue might have been raised as to whether the Armstrongs had read the supplemental contract carefully. As to this the judge's findings were that they had not and had not appreciated the inconsistency between contract and assurances. The judge made this point in a number of places. At para 49 he said this: "There was no suggestion that the [Armstrongs] had been provided with a copy of a draft of the principal contract, which appears from the footnote to have been produced in February 2007, or with a copy of the draft of the supplemental contract, at any time other than shortly before they were first sent to them for signature. It was not suggested to them that they had actually read the contracts before signing them, or that at the time they entered into the contracts they were aware that the true effect of those contracts was that it was open to [Thinc] to give notice of termination at any time within the initial 3 year period, thereby triggering an entitlement to be repaid the supplemental payment, without having to give any justification for its decision." At para 63(5) he said: "I am quite satisfied that the [Armstrongs] would not have entered into the principal contract or the supplemental contract had they known the true position, because they would have appreciated how exposed they were to a claim for repayment of what was on any view a substantial amount at the sole and unfettered discretion of the claimant." At para 63(6) he said: "Because the draft principal contract and the draft supplemental contract were sent and signed at different times, the former before the latter, it would not have been apparent to the [Armstrongs] from a perusal of the former alone that it was inconsistent with the assurances they had received." At para 63(7) he said: "By the time the supplemental contract was provided as a draft, the [Armstrongs] were already committed to [Thinc]…In those circumstances, it is not surprising that the [Armstrongs] did not read the supplemental contract carefully with the principal contract, and appreciate that it allowed [Thinc] to terminate without cause on notice and recover the supplemental payment in full." There is no appeal from these findings. The judge also said this, as to reliance: "58. I also find that if the [Armstrongs] had not received the assurances set out in the previous paragraph at (4) and (5) they would not have entered into the principal contract or the supplemental contract with [Thinc]." The collateral warranty found by the judge In this context, the judge founded on those assurances set out at para 57(4) and (5) of his judgment. They are cited in my [18] above as part of his findings on the evidence of the witnesses before him as to the state of the pre-contract negotiations. To recap, they are that "(4)…the only condition [attached to the supplemental payment] was that the defendants should stay with the claimant for 3 years; (5)…there was no formal minimum performance requirement…". The judge had to decide how to interpret those assurances, and whether to give them the status of a collateral warranty. There was, or ought to have been, no problem about the second of those assurances, for there was nothing in the contract which imposed any minimum performance requirement. However, its relevance was that although Thinc had purported to terminate the Armstrongs' contracts and thus to claim repayment of their supplemental payment on notice, ie without the need for any cause, it had cited the failure to generate sufficient income over the early months of 2009. There were a number of ways in which the judge could, at any rate in theory, have viewed the assurance in his para 57(4). He could have said that it simply failed to meet the demanding standards for a collateral warranty. He could have concluded that it did potentially have that quality, but that it meant nothing more than the supplemental contract would in due course provide: namely that there would be no obligation to repay the supplemental payment if the Armstrongs remained attached by their contracts as advisers to Thinc for a period of three years, but leaving open the whole raft of possibilities through which the Armstrongs might lose their contracts (some more foreseeable than others). Or he could have concluded that in context the meaning was that it was only if the Armstrongs chose to leave Thinc within those three years that they would be obliged to repay the supplemental payment. Or he might have favoured a position somewhat in between the previous two, and said that it meant that there would only be an obligation to repay if they failed to remain because of some fault or action of their own, such as either choosing to leave or committing some act or breach which entitled Thinc to terminate their contracts. What the judge chose to do was to ask himself the questions raised specifically by the facts and assertions of the case. Thinc was claiming repayment of the supplemental payment. It did so on the basis that it had terminated the contract on notice pursuant to clause 6.1 of the principal contract, ie without cause, although it cited in its notice letter a failure of generation of sufficient income. The judge therefore asked himself the question: Was an obligation to repay the supplemental payment in such circumstances consistent with the assurances which he had found had been given? The judge thus addressed the question of the meaning of the assurances given first, and then later moved on to the additional question of their status. As to that first question, the judge answered it as follows: "59. Importantly, I also find that it was an obvious inference or necessary implication from the express assurances given by Mr Boyle and Ms Martin that [Thinc] would not be entitled to repayment of the supplemental payment by terminating the principal contract on the grounds of the Armstrongs' failure to write a minimum quantity of new business within the 3 year period. It must also follow in my judgment by the same reasoning process that it was an obvious inference or necessary implication that [Thinc] would not be entitled to repayment by terminating the principal contract on notice for no reason. What I mean is that I am satisfied, and I find, that the words used by [Thinc's] representatives, when considered on an objective basis having regard to the circumstances in which they were made, conveyed a clear assurance that the only circumstances in which [Thinc] would be entitled to repayment of the supplemental payment would be where the [Armstrongs] themselves terminated the principal contract within the first three years. It is irrelevant in my judgment that words in those precise terms were not used, because I am satisfied that the effect of what was conveyed was the same as if those words had been used." What is the judge saying here? In my judgment, he is principally answering the questions posed by the facts of the case, and asking himself whether Thinc's subsequent position is consistent with the assurances which he finds it to have given. At the end of that paragraph he appears to go further and state that the only circumstance for repayment consistent with the assurance in (4) is where the Armstrongs themselves terminated their contracts within the period in question. However, a subsequent passage in his judgment at para 66 would suggest that he was still thinking within the confines of the factual scenario of the case. Thus at para 66 he said: "the plain fact is that [Thinc] gave clear assurances in August 2007 and cannot now rely so as to deprive those assurances of effect on difficulties caused by the particular terms of the termination provisions of the principal contract, which were not even before the parties at the time the assurances were given. If the end result is that in other, now necessarily hypothetical, circumstances, [Thinc] would also have been prevented from recovering the supplemental payment even if it had terminated the contract for cause under clause 6.3, or even if it had been able to show that the [Armstrongs] had failed to write £50,000 of business each in the first year, then it cannot use that as a justification of depriving the assurance of legal effect in circumstances where it was intended to have effect." What the judge is saying there is that how the assurances would operate as collateral warranties in other hypothetical circumstances can be left for another occasion. He only had to decide the case on the facts before him. As for any point arising from the "notional" £50,000 target, the judge dealt with that separately. It arose in this way. The Armstrongs said that Thinc had been in breach of contract in terminating their contracts under clause 6.3 for cause (namely failure of performance) when it was not justified in doing so. The judge pointed out that Thinc had terminated under clause 6.1 on notice without cause. If however it had been necessary for him decide about any failure on the part of the Armstrongs by reference to a minimum performance requirement, he would have held that there was no right in Thinc to terminate for cause on such a ground, for a raft of separate reasons, beginning with the absence of any minimum performance obligation and continuing with findings that on any view the Armstrongs had met any requirement that could have been based on that notional target of £50,000 (see para 73). Having established a meaning and effect for the assurances relevant for the purposes of answering the needs of the case, the judge went on to ask whether a collateral warranty had been created with the effect of superseding the terms of the contracts. He directed himself by reference to a summary of the law in relation to collateral warranties contained in Chitty on Contracts, 30th ed, at paras 12-003 to 12-005, and to two modern cases cited by Ms Muth on behalf of Thinc, namely Inntrepeneur Pub Co v. East Crown Ltd [2000] 2 Lloyd's Rep 611 and Peekay Intermark Ltd v. ANZ Banking Group Ltd [2006] EWCA Civ 386. He concluded that, especially in a case where the contracts had been signed, he "must be very careful" before finding that the assurances which he had found amounted to collateral warranties which would supersede the terms of the contracts which the Armstrongs had freely signed (at paras 61/62). The judge concluded, nevertheless, that the Armstrongs' collateral warranty defence against the claim for repayment succeeded. At para 63 he considered the factors in favour of the assurances having the status of a collateral warranty. At para 69 he considered the counter-arguments. In favour of a collateral warranty he stressed the following factors: (i) the context of the negotiations, including the facts that the offer of the supplemental payment was critical to the deal, and that the Armstrongs had made it plain that they were not willing to enter into a deal if it committed them to write a substantial amount of business or entitled Thinc to recover the payment for failure to do so; (ii) the assurances repeatedly given by Mr Boyle and Ms Martin to convince them that the only condition for retention of the supplemental payment was that the Armstrongs stayed with Thinc for three years; (iii) Mr Boyle was a senior director and Ms Martin a senior manager with Thinc; (iv) there was no draft contract available in August 2007 when these assurances were given and when the Armstrongs, persuaded by them and by the urgings of Mr Boyle and Ms Martin, applied to join Thinc, thus taking their decision in principle; (v) nothing occurred in the interim between August 2007 and the signing of the principal contracts in March 2008 to suggest that the basis upon which their decision had been taken had changed in any way; (vi) the Armstrongs would not have entered into the transaction if they had known the position under the contracts for they would have appreciated how exposed they would have been "at the sole and unfettered discretion of [Thinc]"; (vii) because the principal contracts and the supplemental contract came forward at different times, the Armstrongs would not have appreciated from the principal contracts alone that the combination of principal and supplemental contracts was inconsistent with the assurance which had been given about the absence of any other conditions regarding repayment; (viii) it was understandable that the Armstrongs did not read the supplemental contract carefully with the principal contract so as to realise that Thinc could recover the payment simply by terminating their contracts without cause on notice; (ix) while the Armstrongs were experienced in financial matters, they would also place great store in what they were told by people whom they believed they could trust. The judge then dealt with a number of counter-arguments and gave reasons why they were not compelling. He then concluded as follows: "For all of these reasons, therefore, I hold that there was a collateral warranty given by [Thinc] that it should not be entitled to demand repayment of the supplemental payment on the ground that it had terminated the principal contract by notice or otherwise within 3 years of the date of the supplemental payment, and that therefore either the claim as advanced is contrary to the terms of the supplemental contract as varied by the collateral contract, and must fail on that basis (by way of strict legal analysis, either because the terms of the supplemental contract were varied by the collateral contract, or by application of the defence of circuity of action), or [Thinc] is estopped from relying on its own termination of the principal contract to seek repayment of the supplemental payment, and the claim fails on that basis as well." Although in this conclusionary paragraph the judge expressed himself in these terms, it seems to me that the true collateral warranty which the judge found (assurance (4)) was that the only condition which attached to the supplemental payment was that the Armstrongs stayed for three years. He construed that to have the effect of saying that Thinc would not be entitled to claim repayment if it terminated within three years without cause (or by reliance on some minimum performance requirement). Alternatively, Thinc was estopped from asserting a right to repayment which was inconsistent with that assurance. "No pleading" Thinc's first submission on appeal is that the judge's finding of a collateral contract defence was not open to him, because it was not pleaded. As Thinc's skeleton put it: "The first time that the defence was ventilated was in the Judgment itself." This submission, however attractively it came to be put, is incorrect. The Armstrongs' re-amended defence and counterclaim provided as follows: "2. The First and Second Defendants aver that the Claimant has (i) acted in breach of a collateral contract made between the parties, and/or (ii) is estopped from claiming such a sum as a result of representations made to the First and Second Defendants by its servants and agents, or alternatively, without prejudice to the foregoing, (iii) has acted in breach of contract by wrongfully terminating the contract of the First and Second Defendants and thereby wrongfully sought to create a "repayment event". Save as aforesaid, paragraph 1 of the Particulars of Claim is denied. 3. The First and Second Defendants aver that they signed the "Registered Individual's Contract with Thinc" ("the Contract") and the "Supplemental Offer" in consequence and pursuant to the representations made to them and/or agreement was reached collateral to the Contract and the "Supplemental Offer"." There then followed, under the heading of "Particulars", particulars of the whole of the negotiations and their background and context, which included details about the assurance that the supplemental payment was "not conditional upon a requirement to create any new business", and led up to the following allegations: "(d) A meeting took place on or about July/August 2007 between the First and Second Defendants and Julie Martin and Nick Boyle whereupon discussions as to the details took place, especially the requirements to justify the Disturbance Allowance and reclaim conditions. It was explained to the First and Second Defendants that as long as they remained with the Claimant for 3 years there would be no other conditions… (f) It was agreed that the disbursement allowance [sc the disturbance allowance] would be paid by the Claimant on condition that the First and Second Defendants supplied the Claimant with the previous 12 months' proof of income. This allowance was paid up front and not to be paid back on condition that the First and Second Defendants stayed for three years". [Emphasis added] The defence and counterclaim later referred to Thinc's termination letter, pleaded that it was a wrongful termination of the Armstrongs' contracts, and stated by way of particulars inter alia that - "(vii) Further, the Claimant is wrongfuly seeking to and acting inconsistently with the terms of the collateral contract and the First and Second Defendant seek a declaration estopping the Claimant from so acting." In the circumstances, I find the submission that the collateral warranty defence went unpleaded and that the "first time the defence was ventilated was in the Judgment itself" simply to be unhelpful. The Armstrongs' defence pleaded the critical assurances given (see particulars (d) and (f) under para 3, cited above) and relied on them for the purpose of a collateral warranty agreement which provided a defence to the claim for repayment. Since the plea was that the assurances constituted a collateral contract and that that collateral contract provided a defence to the claim for repayment, it was perfectly obvious what the Armstrongs were saying "the only condition" assurance meant: that Thinc was not able to use a different and further condition ("provided we do not terminate your contracts on notice for any reason whatsoever within the three years", or "provided we do not (wrongly) assert that you have broken minimum performance requirements which have never been agreed and use that as an excuse for terminating on notice without cause") in order to claim repayment. The language of the legal analysis can no doubt be put in a number of different ways, probably all or most of which will in these circumstances come to the same thing. However, such more refined legal analysis is not the stuff of pleadings. What, then, is Thinc intending to say in its detailed submissions under this first ground that the collateral warranty defence went unpleaded? At its broadest, Thinc appears to be submitting that the judge has acted unfairly (it is not said deliberately so, but I suppose it is suggested that he did so in error) by finding and acting on a defence which had simply not been put forward. Thus Thinc's skeleton submits: "26. It is clear on the authorities that for a court or tribunal to determine a dispute on the basis of a case not put forward by a party or not raised by the court or tribunal is unfair and not permissible." That proposition probably needs no citation of authority, but nevertheless the authorities cited by Thinc's skeleton are instructive. We were referred first to The Vimeira [1984] 2 Lloyd's Rep 66 (CA), where a shipowner claimed damages from his charterer because of damage suffered by his ship as a result of being ordered to an unsafe port. The unsafety was alleged to consist in insufficient depth of water. However the arbitrators, while rejecting that case, instead fastened upon an entirely different factual case, unpleaded and unargued, and one which the arbitrators had not even raised with the parties. Robert Goff LJ said this: "but the fact remains that the award was made on the basis of a point which was never raised as an issue or argued before the arbitrators. There is plain authority that for arbitrators so to decide a case, without giving a party any warning that the point is one which they have in mind and so giving the party no opportunity of dealing with it, amounts to technical misconduct and renders the award liable to be set aside or remitted… [at 74 rhc] In truth, we are simply talking about fairness. It is not fair to decide a case against a party on an issue which has never been raised in the case without drawing the point to his attention so that he may have an opportunity of dealing with it, either by calling further evidence or by addressing argument on the facts or the law to the tribunal. In my judgment, the arbitrators in the present case failed to give that opportunity to the charterers in respect of an issue not raised in the arbitration that the turning space at the entrance to the dock was insufficiently wide" [at 75 lhc]. We were also referred to Zermalt Holdings SA v. Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14, another case from arbitration. The arbitrator there was appointed to determine rent under a rent review clause and had relied on matters of his own expertise which had never been the subject of reliance or comment at the arbitration. Bingham J said (at 15 rhc): "Nevertheless, the rules of natural justice do require, even in an arbitration conducted by an expert, that matters which are likely to form the subject of decision, in so far as they are specific matters, should be exposed for the comments and submissions of the parties. If an arbitrator is impressed by a point that has never been raised by either side then it is his duty to put it to them so that they have an opportunity to comment. If he feels that the proper approach is one that has not been explored or advanced in evidence or submission then again it is his duty to give the parties a chance to comment. If he is to any extent relying on his own personal experience in a specific way then that again is something that he should mention so that it can be explored. It is not right that a decision should be based on specific matters which the parties have never had a chance to deal with, nor is it right that a party should first learn of adverse points in the decision against him. That is contrary both to the substance of justice and to its appearance…" Now in the present case, the "specific matters" (to pick up Bingham J's expression) or the basis of the case (to refer to the characteristics of an unsafe port), here the foundation of the alleged collateral warranty, namely Mr Boyle's and Ms Martin's assurances, were at the heart of Mr Maguire's pleadings. In my judgment, the present case is a long way from The Vimeira and Zermalt Holdings. Moreover, a consideration of some of the other features of the trial which have been drawn to the court's attention in the course of argument, although to some extent prayed in aid by Mr Kealey, in my judgment go further to demonstrate that the allegation of unfairness is unfounded. I begin with Thinc's opening skeleton argument prepared for trial by Ms Muth, dated 6 October 2011. That deals at some length with the subject of collateral contract or warranty, but, by choosing to ignore paragraph 3 of the defence entirely, which is where particulars of the plea of the collateral warranty defence were given, Ms Muth found herself able to make the submission that the only assurance relied upon for this purpose was something not mentioned until para 8 of the defence, where the further plea was made that it was a term of the collateral contract that Thinc would use all reasonable endeavours to collect renewal monies. Apart from that, it was submitted that the collateral contract relied upon was not identified. Where Thinc was not in a position to gainsay the critical pleaded assurances as a matter of evidence, this approach was, if deliberate, no doubt good tactics, but it was nothing more than that. I turn to Mr Maguire's opening skeleton argument, also dated 6 October 2011. This is tied up with an amended draft pleading which was disallowed on the first day of trial (which I need to deal with below), and therefore requires some explanation. The matter of "collateral contract" was addressed at paras 12-14. Reliance was there placed on the assurances given by Mr Boyle and Ms Martin. The two main assurances which formed the centre of the judge's findings of fact on this issue (judgment at para 57(4) and (5)) were the subject matter of separate paragraphs of the skeleton. Thus the assurances relating to the absence of minimum performance obligations were dealt with at para 12. This was given some prominence because of the terms of Thinc's termination notice. The assurance dealing with the general absence of conditions regarding the supplemental payment was dealt with at para 14. The language of para 14 did not precisely match the relevant pleading, because sub-para (d) of the para 3 particulars had undergone a draft amendment, and para 14 of the skeleton reflected that new draft. The draft amendment was as follows (the amendments are underlined and the disputed amendment is both underlined and in italics): "(d) A meeting took place on or about July/August 2007 between the First and Second Defendants and Julie Martin and Nick Boyle whereupon discussions as to the details took place, especially the requirements to justify the Disturbance Allowance and reclaim conditions. It was explained to the First and Second Defendants that as long as they remained with the Claimant for 3 years there would be no other conditions, as their renewals would cover the minimum business level requirements of a notional amount of £50,000 issued business each per annum, (which is evidenced by the First Defendant's handwritten notes) and that the First and Second Defendants' income stream was sufficient to cover any such requirements…For the avoidance of any doubt, the First and Second Defendants were led to believe that they would be permitted to remain in their posts for three years, barring any misconduct, as their renewal and trail streams were by themselves sufficient to satisfy the Claimant, particularly given the fact that there was no minimum income standard." Para 14 of Mr Maguire's opening skeleton reflected this new amendment, thus: "14. 1D and 2D were led to believe by Julie Martin and Nick Boyle that they would be permitted to remain in their posts for three years (Nick Boyle was aware that 1D proposed to retire within 3-5 years [4/570], barring any misconduct, as their renewal and trail streams were by themselves sufficient to satisfy C, particularly given the fact that there was no minimum income standard." Thus, although Mr Maguire chose to emphasise the amended part of the para 3(d) pleading in his skeleton, it could not be said by any means that there was any abandonment of the original pleading. The disputed amendment was arguably making two new points however. First, the assurance was being relied on, but only by way of analysis ("for the avoidance of doubt"), proactively as well as defensively: that is to say that it was being said not only that there was an assurance relating to (the absence of) any other conditions as to the repayment of the supplemental payment, but also that it was implicit in that that it would have been a breach of contract to seek to terminate the contract in the way that Thinc had purported to do. Secondly, in this proactive context, it was being allowed that the assurance would not prevent a termination justified by misconduct ("barring any misconduct"). As it happens, the disputed part of the amendment was disallowed, and a re-amended defence and counterclaim was brought into being which omitted the offending final sentence of para 3(d). Mr Kealey relies on that disallowance, but to my mind this episode merely serves to emphasise how much the original and remaining defensive pleading regarding the assurance given by Mr Boyle and Ms Martin was at the heart of the Armstrongs' defence at trial. To repeat that critical pleading; "as long as they remained with the Claimant for 3 years there would be no other conditions". Thus almost the first matter dealt with on the opening day of trial (10 October 2011) was the disputed amendment. In the course of explaining his pleadings as a whole, Mr Maguire said with reference to the two essential assurances (at 793): "that, I submit, encapsulates essentially the representations surrounding the one off payment, the supplemental payment, the disturbance payment and essentially, my Lord, the defendants' position condensed and the representation related to that is essentially that as long as the defendants remained with Thinc for three years that would be the only condition that was required and would be satisfied…" The judge, however, had a concern about the last sentence of para 3(d), and there was then the following dialogue, of which I will make selective extracts which I trust will give its flavour: "Judge: The concluding sentence at paragraph 3(d) appears, at least to me, to introduce a further allegation which is that you say that your clients were led to believe that they would be permitted to remain in their posts for three years…At least at first blush that seems to me to be a separate and independent allegation which does not flow on from what is already pleaded and I wonder whether there is any evidence in your witness statement to support that last sentence. Maguire: My Lord, if I can refer your Lordship to the top of that particular page and you will see… "It was explained to the First and Second Defendants that as long as they remained with the Claimant for 3 years there would be no other conditions as their renewals would cover the minimum business level requirements." Judge: But that is the condition of the entitlement to the disturbance allowance, is it not? I mean as I understand it, what is said in the sentence beginning, "It was explained…" that is consistent [sic, but sc inconsistent] with what the supplemental contract actually provided, but is there not a difference between that and the last part of paragraph 3(d) which effectively seems, at least to me, to go further and say that there was a positive assurance to the effect that there would be no termination - Maguire: No, absolutely. Judge: - within three years other than misconduct…but I think that what I think [Ms Muth] has said and will say is that if this amendment were allowed to stand as it is, it is not so much arguing the case in terms of what the proper construction is, it is arguing the case on the basis of specific oral representations or assurances. The argument, would be well, if that is not already out in the open in terms of the existing pleading or the witness statements then that is a new factual case and it would not be right to allow you to introduce that for the first time shortly before trial, so I think you need to deal with that point really… Maguire: My Lord, I submit that the clear conclusion to be drawn from that is that the only requirement was that the first and second defendants remain in their positions, in their posts, for three years… Judge: - but there is, and I do not think it is being pedantic, is it, to say that there is a difference between someone saying that and someone saying, "Actually we will not terminate you for three years."… Maguire: …This, I submit, is just a mere clarification of that initial sentence… Judge: - but I think Ms Muth would, I am sure, say, and again I would have some sympathy if she said, well, as it currently stands it does appear to suggest that you are trying to introduce a new factual argument and that for me to give permission it would have to be revised to make it clear that you are not and that all you are seeking to do is to draw out a conclusion from what is already in the pleaded case." Now, it seems to me to be absolutely clear from that discussion, right at the beginning of the trial, that the originally pleaded assurance towards the beginning of para 3(d), the "no other conditions" assurance, to which Mr Maguire repeatedly drew attention, was and remained emphatically at the heart of Mr Maguire's case: even if in his opening skeleton it had been expressed in terms of his new formulation, which he at any rate submitted (but the judge doubted) was not a new factual allegation but a drawing out of the meaning of the original pleading. I am at a loss to know how in these circumstances it can be submitted on behalf of Thinc at this appeal that the collateral warranty defence was neither pleaded, nor the subject of any submissions, that the first time the defence was "ventilated" was in the judgment itself, and that this was unfairness on the part of the judge. The judge's ruling on the final sentence of the redraft of para 3(d), given later that day, is consistent with that earlier dialogue. He ruled: "There is then sub-paragraph 3(d)…Again, for the reasons which I indicated in argument, I am not satisfied that it would be fair to allow that amendment; because on its face it advances, I am quite satisfied, a positive allegation that things were said by employees of the claimant which led the defendants to hold that belief…In so far as it was said, as was suggested in the course of argument, to be only a drawing together of the threads from the existing pleaded case, in other words an inference rather than a new factual case, then it would be necessary, I am satisfied, for that to be absolutely clearly spelled out in the draft pleading, rather than for amendments to be made or approved on the assumption that it is to have only this limited effect…If Mr Maguire wants to renew an application with a revised version then it will, of course, have to be considered on its merits…" Mr Maguire did not renew his application with a revised version, and Thinc seeks to rely on that fact: but I do not understand for what purpose. The Armstrongs' case in collateral warranty did not depend on what the judge regarded as a new factual case, for the original pleaded case remained. The difficulties for this first ground of appeal accumulate as the trial continued. Mrs Armstrong was cross-examined by Ms Muth on the basis of the collateral warranty defence (at 907), including the pleaded assurance about the absence of any minimum performance obligation (at 909), albeit unsuccessfully so, but she did not challenge her as to the other critical assurance relating to the "no other conditions" point. It appears that this may have been because Ms Muth chose to cross-examine not on the basis of Mr Maguire's pleadings, but on the basis of his skeleton argument (see at 907D). However, in the light of the discussion concerning the pleadings right at the beginning of the trial, that was a dangerous thing to do. So it was that, at the end of her cross-examination, the judge asked Ms Muth in effect whether she had any further questions regarding that point - albeit he began by mistakenly referring to paragraph 14 of Mr Maguire's skeleton argument, which reflected the disallowed extension of that point, instead of to the surviving para 3(d) of the re-amended defence. However, that confusion was in due course eliminated and it was Ms Muth who herself said (at 959): "Now that has gone, of course, and the only other plea that is made is that there were no other conditions." [Emphasis added] The judge said that he had disallowed the amendment to the bottom of para 3(d) but that still left a collateral contract claim. Ms Muth then challenged the judge: "But where exactly in the pleading? I simply cannot see where that is. If your Lordship would like me to cross-examine on that I will do it, but I formed the view when I was editing my prepared cross-examination following these various amendment applications and the bits that were not allowed, I think the only thing, perhaps, in 3(f)." I am not sure why Ms Muth spoke as she did, having a few lines earlier referred directly to "the only other plea that is made is that there were no other conditions", a direct reference to the original and surviving part of para 3(d). At any rate, para 3(f) (which she did cite) was the follow-up to the assurance pleaded in para 3(d). However, as soon as Ms Muth mentioned "3(f)", Mr Maguire interjected: "3(d). Look at 3(d)." Ms Muth queried "3(d)?" and Mr Maguire said: "It has been in there right from day one." He was correct to refer to para 3(d), which of course had been the topic of discussion on the first morning of the trial, when a distinction had been made between the original pleaded assurance and the amendment introduced as a last sentence to 3(d), which was disallowed. The essential difference was between an assurance as to the absence of any other conditions for repayment and an assurance as to when termination might be permitted. The former had always been an essential limb of the Armstrongs' case. Ms Muth then said that "I will put the question…It is as simple as that and then it is out of the way." The judge concurred, saying that "it would be undesirable for you not to cross-examine…". What then happened, however, is that Ms Muth did not cross-examine on the original pleading of para 3(d) (the "no other conditions" assurance, relating to conditions for claiming repayment), but on the disallowed sentence relating to termination rights. I do not know why that happened, but it did. Ms Muth may simply have become confused. She may have overlooked the original pleading, but she should not have done so and, a little earlier, had not done so. She may have been reluctant to cross-examine on the original point, thinking it would do her no favours. Whatever the explanation, I do not consider that Thinc is in a position to blame the judge (or Mr Maguire). The point had been highlighted by Mr Maguire on the first morning, it had plainly survived the disallowance of the amendment, and that discussion had only served to emphasise the different scope of the original, surviving, pleading which Mr Maguire had repeatedly cited as an essential part of his case. The absence of cross-examination was picked up by the judge, Ms Muth had herself referred to "the only other plea is that there were no other conditions" and to para 3(f), and for good measure Mr Maguire had referred to para 3(d) and said "It has been in there right from day one". The upshot of Ms Muth's renewed cross-examination was as follows (at 960/1): "Q. And it is right to say, is it not, that there is nothing in the witness statements of Julie Martin or Nick Boyle in terms of an assurance that Thinc would not terminate your contract in the first three years? [emphasis added] A. No. Q. No. And that was not said, in fact? A. Well, it was implied… Q. – you then inferred Thinc would let you stay for three years. Is that right? A. That's correct. It was implied by them and that's what we accepted. That's what we believed to be the case. Q. Well how did they imply it? A. Because they said that as long as we stayed three years that was the conditions for the supplemental payment. Q. Yes but can you not see the difference…I mean the difference is that you can choose not to stay for three years, yes? A. We weren't going to do that…Well, I'm sorry, that is what we took from that. That is what we thought we understood, yes. Q. And you understood that from Julie Martin and Nick Boyle saying that you had to stay for three years? A. Yes. We trusted them. Q. That was the basis for your inference that Thinc would not terminate you in the first three years. Am I right – A. Yes." That was impressive testimony. Questioned on a point not within the case (the "would not terminate" point), Mrs Armstrong gave her understanding of what the "no other conditions" assurance also involved, as a matter of inference, from the words used, which themselves were never challenged. Nor was there any challenge to Mrs Armstrong's primary testimony "that the only stipulation was that we had to remain with the company for three years…However, this was not a worry…I did not want to move on." If, as Mrs Armstrong confirmed in this cross-examination "they said that so long as we stayed three years that was the conditions for the supplemental payment", the question is immediately raised: But does this allow for a condition of repayment if Thinc terminated the contract at will? Ms Muth did not ask that question, but a different question regarding a right to terminate. I am not surprised by Mrs Armstrong's answer to that different question. It is a reasonable answer and I have no reason to doubt its honesty, although it was not within the case. However, it is entirely consistent with the Armstrongs' primary case that, provided the Armstrongs did not themselves choose to move on within three years, there could be no claim for repayment. Whether that meant in addition that the termination was wrongful is a separate question, not within the case. But the first question was whether Thinc could make that termination the occasion of a claim for repayment, and that question was never put in issue during cross-examination. It was submitted by Mr Kealey that this testimony showed that the Armstrongs did not believe in the case advanced or in the judge's conclusions. However, I would not accept that submission. The answers given were responsive to the questions asked. However, the questions asked were not responsive to the careful distinction which the judge had clarified in the discussion with Mr Maguire and in his ruling on the first day of trial. In the circumstances it was for the judge to come to his conclusions on the evidence before him. At the end of the trial there were oral submissions. In his closing submissions, Mr Maguire was (if he will forgive me) not perhaps as elegant in his analysis as he might have been, and there is some straying into submissions which might have partaken of the disallowed case. But what is nevertheless clear is that he was contending that the assurances relied on as creating a collateral contract operated so as to supersede clause 4 of the supplemental contract (see at 995F), ie to prevent a claim to repayment upon termination by Thinc without cause. For instance: "To utilise clause 4 would denude the collateral contract of any commercial good practice because what would have to happen is that an advisor would be on tenterhooks right up to the end of month 33". The judge said: "So what you are saying, are you, is it that clause 4 of the supplemental offer which, on the face of it, entitles Thinc to ask for and have the supplemental payment back…if they give notice within three years, is inconsistent with the collateral agreement…that you are saying was made, the only condition was, "You stay with us for three years"? To which Mr Maguire's answer was "Absolutely…Yes, yes." The judge continued: "Judge: Well presumably what you are, I suppose you are saying is that if the supplemental payment is in effect representing payment for Thinc acquiring the valuable asset of your clients' client base – Maguire: Yes Judge: - then, in effect, they are sort of they would be taking with one hand and then taking away again if having acquired the client base but then within three years give notice for no good reason – Maguire: Yes. Judge: - and get the money back. Maguire: Absolutely…" It seems to me that Ms Muth, who was listening to this dialogue, must have been on notice as to what the argument which she had to meet was, an argument which the judge ultimately accepted. Ms Muth's closing submissions came next. Her approach to the collateral warranty defence remained what it had been from the start of the case, namely a combination of an expression of puzzlement as to the case against her, and a focus on paragraph 12 of Mr Maguire's skeleton (see at 1018D) as the sole expression of that (seeing that the skeleton's para 14 was deemed to have gone with the disallowance of the last sentence of para 3(d) of the defence). She continued to ignore the central assurance which I have called the "no other conditions" point. Indeed, at first she appears to have sought to avoid dealing with collateral warranty at all, saying (but inaccurately) that "You have actually had no submission on this from my learned friend" (at 1017A). But when the judge began to prompt her to deal with the collateral warranty defence, she said this (at 1017B): "My Lord, I have made a very careful note because I have been puzzled throughout this case as to what the terms are of the collateral contract. What I have written down now is that (1) there is no minimum performance standards; (2) no new business was to be written; (3) novation would be efficiently carried out; and (4) the renewal income would be sufficient to cover business levers [?]. Those are the four that I have, my Lord." But she said nothing about the "no other conditions" assurance. My understanding of her position is, possibly, that, because para 14 of Mr Maguire's skeleton argument had in effect gone from the case together with the judge's first day ruling disallowing the last sentence of amended para 3(d) of the defence, therefore all that remained was para 12 of the skeleton. But if that was her thinking, I fear she was in error, an error of her own making. The judge then prompted her again (at 1017C): "Well I think that the argument is that…clause 4 or invoking clause 4 termination by notice is inconsistent with the collateral [warranty] to the effect that the only condition on payment or reclaim conditions of the disturbance allowance is that you stay with us for three years." That was an accurate summation of the submission put to the judge in the dialogue he had had with Mr Maguire during the latter's closing submissions. It was only on the judge's indication that he wished to be assisted on this point that Ms Muth finally turned to make submissions on collateral warranty, and those submissions were essentially of a legal rather than a factual basis: "his case is there was a collateral contract or certain collateral terms that have to be read together with the contract…Here we go there then…if I may take you to authority…" A little later, after some discussion of authority, the judge prompted Ms Muth again (at 1022D), and this led to the following dialogue, which, given the case of unfairness made on appeal and the use which Mr Kealey seeks to make of some of this passage, I fear I must set out in extenso: "Judge: I keep on reminding you about this but I do think that what is in paragraph 14 of Mr Maguire's skeleton argument is what he is advancing to me as a collateral, a further collateral term. Muth: But my Lord, in my respectful submission, if he was permitted to do that then he should have been allowed to amend his pleading. That was the amendment that was not allowed, my Lord. Judge: Well I think that the position is that it was not allowed because it seemed to me that what he was seeking to introduce was an alternative claim of misrepresentation to that effect and on the basis of what you said, it seems to me that there were very powerful reasons why that should not be allowed…But it does seem to me and in fact my recollection is that this is something that we discussed and I mentioned to Mr Maguire when we were looking at this was that if that addition to paragraph 3(d) was being put on the basis that it was simply a conclusion which was said to follow from what was already pleaded…then it would not necessarily be objectionable…and I do think that certainly on my reading of the particulars of claim there is an allegation that there was a term or there was a collateral assurance or an assurance which took effect as a collateral term that…the only condition being a reclaim condition, was that the defendants stayed with Thinc for three years. Muth: That is the high point, is it not? That is the high point of the evidence that we heard? Judge: Yes Muth: That the defendants would stay with Thinc for three years. Judge: Yes. Muth: Now that is entirely different from saying Thinc represented that it would not terminate the contract in the first three years and in fact if one looks at Mrs Armstrong's witness statement…They wanted to stay because they wanted to subscribe to this annuity scheme…and, in fact, this sits very comfortably with the way the case is pleaded because if we go to the defence…in paragraph 3(f)…it was not to be paid back on condition that the first and second defendant stayed for three years…Therefore it only deals with the motivation of the defendants. They had to remain with Thinc, they could not leave. Judge: Well it seems to me at least and this is why I raised it, that on the face of it if, as Mrs Armstrong says in paragraph 23…that if she was told that the only stipulation is that we have to remain with the company for three years…that does appear on the face of it inconsistent with clause 4 of the supplemental agreement, under which the stipulation was not just that but it was that Thinc did not, itself, decide for its own reasons to give notice of termination within those three years. Muth: Well my Lord, actually, there is no fetter on clause 4.1(a) I think it is. There is no such fetter, nor is it pleaded that there should be such a fetter and I would certainly object if that amendment was now being proposed. What I am saying is, simply what I am saying now is that on the evidence, again, in order to prove collateral term there has to be an assurance in evidence…that induced and was intended to induce the contract. Now in my respectful submission the high point of the defendants' case is to say that they had to remain...for three years…Nothing was said about what Thinc could, would or might do, nothing was said about that…and the other interesting point of course, my Lord, it has been said again Nick Boyle and Julie Martin gave this assurance. If that had been so important that it was a representation that induced, that was intended to induce and did induce the contract, surely they would recall it. Even in their very late witness evidence that was produced on Monday they do not deal with it. Judge: Well there is a contemporaneous record, is there not? The hand-noted email about subjects to be covered at the meeting. Muth: Yes but that does not take it any further because that again says "stayed three years"…It does not say they were entitled to stay three years. Judge: Well it says, "Up front payment, are there any conditions?" Answer, "Stay three years only." Muth: Yes, yes and she stayed, in my respectful submission, Mrs Armstrong has dealt with that in her paragraph 23 where she said, "Well I did not trouble you because I did not want to move on." My Lord I cannot take it any further than to say in order to prove a collateral term, my learned friend has to prove on the evidence that an assurance was given and he has now put it in his skeleton argument that the defendants would be permitted to remain in their posts for three years, barring any misconduct. I mean, where has that come from, for example? That is not mentioned anywhere. In my respectful submission, there simply is not the evidence to support that but it is of course a matter for your Lordship but in my respectful submission there simply is none and I did cross-examine on that and the case, to be fair to Mrs Armstrong, her case was completely consistent with what it says in her witness statement." And there the matter was left. I have emphasised some passages in that extract in order to draw attention to certain features. What does this passage show? In my judgment it shows the following. (i) First and foremost, there was a thorough opportunity for Ms Muth to address the collateral warranty defence, both as Mr Maguire had addressed it and as the judge understood it. (ii) Although the judge may initially have been mistaken, in the light of his ruling on the first day, to have referred to paragraph 14 of Mr Maguire's skeleton, he very quickly reverted to the essential way in which he had discussed the matter with Mr Maguire, by asking whether the "no other conditions" assurance given to the Armstrongs was consistent with a right under clause 4 of the supplemental contract to reclaim the supplemental payment upon termination without cause by Thinc. Nor was his judgment in any way premised on the disallowed pleading. (iii) It is noticeable that, when prompted, Ms Muth recognised the "no other conditions" assurance as the "high point" of the Armstrongs' case; even if she acknowledged it only as "they had to remain for three years", which is to emphasise the condition, rather than the fact that it was the only condition. (iv) At one point Ms Muth sought to submit that this assurance was not proved, at any rate as a matter of sufficient importance to induce the contracts, by reference to the evidence of Ms Martin and Mr Boyle. This prompted the judge to ask her for her comments on the contemporaneously noted email. (v) At the last, Ms Muth reverted to the separate, albeit disallowed, case relating to a bar on termination, as distinct from a bar on reclaiming the payment. (vi) It seems to me to be impossible to say that the judge has acted unfairly, or that he has failed to put to Ms Muth what has troubled him about Thinc's claim and the Armstrongs' collateral warranty defence, or that his judgment could have come as an unfair surprise. (vii) The judge's judgment, whether right or wrong, was well within the pleadings, evidence, submissions and dialogue in court. If Thinc's broad submission of unfairness runs into the sand, is there another basis to this first ground of appeal? There is another possible view of it, which is that, at bottom, it is an extremely narrow submission to the effect that the precise formulation in which the judge concluded his judgment (in para 70) on the subject of collateral contract was not to be found in the pleadings. However, I consider that submission to be unattractive and wrong. In any event, the judge's analysis is really to be found in para 59 (and para 66) of his judgment, cited above, not in para 70. What was important, as pleadings go, is that the assurances were pleaded and they were relied on as creating a collateral warranty, and that collateral warranty was said to mean that Thinc was acting wrongfully in seeking to recover the supplemental payment. The rest was interpretation and legal analysis. The above citations show that all relevant matters were appropriately explored in dialogue with the judge. I have considered this ground of appeal carefully. Mr Kealey made attractive submissions in support of it, but when I have taken those submissions back to the original trial material, and tested them by reference to each stage of the trial, I have been left in no doubt that the submission must fail. The merits I have headed this section of my judgment "The merits" because it deals with Thinc's second ground of appeal, which is that "The relevant "assurance" was not given and intended". This ground is developed over 56 paragraphs of Thinc's skeleton argument, but the essence of it is to revisit the submissions on the merits made at trial. This ground of appeal is summed up in the skeleton in these words: "There was no (alternatively no sufficient) evidence before the learned Judge to support his conclusion and/or he was wrong as a matter of law and/or construction to conclude [as he did in his paragraphs 59 and 63(2) of his judgment, viz that there was an assurance that the only circumstances in which Thinc would be entitled to repayment would be where the Armstrongs themselves terminated the principal contracts] and that it was intended by the parties that this "assurance" would have contractual effect." Despite the length of Thinc's skeleton argument on this point, Mr Kealey's submissions on it were relatively brief. He accepted that the doctrine of collateral warranty could give effect to such a warranty so as to enable it to take precedence over the inconsistent wording of even a signed contract. He was right to do so, see, for instance Curtis v. The Chemical Cleaning v. Dyeing Co Ltd [1951] 1 KB 805, as explained in Peekay Intermark Limited v. ANZ Banking Group at [43]-[44] or AXA Sun Life Services plc v. Campbell Martin Ltd [2012] Bus LR 203 at 227-228, on the basis that the effect of the collateral warranty is to misrepresent the primary contract. As Lord Denning MR said in Mendelssohn v. Normand Ltd [1970] 1 QB 177 at 183H/184C: "There are many cases in the books when a man has made, by word of mouth, a promise or a representation of fact, on which the other party acts by entering into the contract. In all such cases the man is not allowed to repudiate his representation by reference to a printed condition…The reason is because the oral promise or representation has a decisive influence on the transaction – it is the very thing which induces the other to contract – and it would be most unjust to allow the maker to go back on it. The printed condition is rejected because it is repugnant to the express oral promise or representation. As Devlin J said in Firestone Tyre and Rubber Co. Ltd. v. Vokins & Co. Ltd. [1951] 1 Lloyd's Rep 32, 39: "It is illusory to say: 'We promise to do a thing, but we are not liable if we do not do it'." To avoid this illusion, the law gives the oral promise priority over the printed clause." So here, it would be illusory for Thinc to say: "The only condition for our recovery of the supplemental payment is if you do not stay with us for 3 years" and then for its printed contract to enable it to reclaim the money at will within that period by mere dint of terminating the contract without cause. That would be to impose a new condition for repayment. Similarly, in J Evans & Son (Portsmouth) Ltd v. Andrea Merzario Ltd [1976] 1 WLR 1078 a forwarding agent promised that goods would be carried under deck and on that basis the shipper accepted (knowingly) a contract which gave the forwarding agent the right to ship goods on deck and also to be free of liability in the absence of wilful neglect or default. The goods were carried on deck and were lost overboard. It was held that the collateral promise overrode the printed conditions. Lord Denning MR said (at 1081): "The judge held there was no contractual promise that these containers should be carried under deck. He thought that, in order to be binding, the initial conversation ought to be contemporaneous; and that here it was too remote in point of time from the actual transport. Furthermore, that, viewed objectively, it should not be considered binding. The judge quoted largely from the well known case of Heilbut Symons & Co. v. Buckleton [1913] AC 30, in which it was held that a person is not liable for damages in innocent misrepresentation; and that the courts should be slow to hold that there was a collateral contract. I must say that much of what was said in that case is entirely out of date…But even in respect of promises as to the future, we have a different approach nowadays to collateral contracts. When a person gives a promise or an assurance to another, intending that he should act on it by entering into a contract, and he does act on it by entering into the contract, we hold that it is binding: see Dick Bentley Productions Ltd. v. Harold Smith (Motors) Ltd. [1965] 1 WLR 623." In the same case, Roskill LJ said (at 1084): "It is said that even so [ie even if the collateral promise to ship under deck applies] these exemption clauses apply…With great respect, I think that is an impossible argument. In the words which Devlin J. used in Firestone Tyre and Rubber Co. Ltd. v. Vokins & Co. Ltd. [1951] 1 Lloyd's Rep. 32, 39, and approved by Lord Denning MR in Mendelssohn v. Normand Ltd. [1970] 1 Q.B. 177, 184, the defendants' promise that the container would be shipped under deck would be wholly illusory…It is a question of construction, interpreting the contract as I find it to be." So here, it is ultimately a question of construction. It is nevertheless submitted (in Thinc's skeleton argument) as a prior point that the judge erred in thinking that the "no other conditions" assurance was clearly proved. I reject that submission. There was no evidence to the contrary, and it was supported by the contemporaneous note made at the meeting of 24 August 2007 on the face of Mrs Armstrong's email of 23 August. It is next submitted (in Thinc's skeleton argument) that there was no subjective intention of making a contract (animus contrahendi) in terms of what Mr Boyle and Ms Martin said. I reject that submission. The supplemental payment was a critical feature of the deal. Without it, Mr Boyle and Ms Martin had not been able to interest the Armstrongs in joining Thinc. With the offer, the deal became negotiable, but only if the Armstrongs could be satisfied that the money could not be reclaimed. They pressed Mr Boyle and Ms Martin repeatedly on these features of the deal, and were repeatedly assured that there were no minimum performance requirements and no conditions which would permit recovery of the payment by Thinc provided the Armstrongs stayed for three years. I regard this submission as unrealistic (not that it was made by Mr Kealey orally). To whatever extent a subjective intention is relevant, it existed, and plainly so, on both sides. It is next submitted (in the skeleton argument) at some length that "even viewing the matters objectively", the judge was wrong to reach the conclusion that he did. Amongst the problems with that submission, however, was that Mr Kealey was reluctant to make a submission as to what the assurances did mean. The court asked him what they meant. He said that he had difficulty answering the question, without a properly explored context. I think he was suggesting that, for the reasons given on his first ground of appeal, the argument was not only at large but had not even been properly adjudicated. He even submitted that the question was unfair. On being pressed for an answer, he said that although Thinc would have been unable to terminate the contracts for lack of performance (presumably because of the absence of any performance requirements and the assurance that there were none), there was nothing in the assurances to prevent Thinc from terminating on notice without cause, even if the reason why it terminated on notice without cause was because of lack of performance. I am not satisfied that that is an answer as to the construction of the assurances. In any event it is structured in terms of Thinc's rights of termination. With the failure of the Armstrongs' other points and the refusal of the amendment in the last sentence of para 3(d), there is no issue as to Thinc's rights of termination. The question is and was at trial, whether on termination Thinc had a right to reclaim the supplemental payment. The judge ruled that it did not, because the critical assurance promised that there were no relevant conditions that could permit such a right to reclaim. Ultimately the question of construction, therefore, is whether the "no other conditions" assurance meant that Thinc could recover the supplemental payment because, even though the Armstrongs were willing to stay, they had been told to go: or whether the words of the assurance "as long as they remained with [Thinc] for 3 years there would be no other conditions" (see para 3(d) of the defence) entailed that the decision to go or stay was the Armstrongs'. In my judgment, in a choice between those two alternatives, there is no contest: the latter alternative must prevail. A construction that would permit Thinc to recover the supplemental payment on a whim (or, as bad, for lack of performance when the Armstrongs had been assured that there were no minimum performance requirements, and there were none) would be absurd. It would undo the very basis on which the Armstrongs were willing to join Thinc. It would, in the words of Devlin J, approved in subsequent cases in this court, make the assurance wholly illusory. Such a construction is so unreasonable, so uncommercial, that it is to my mind impossible. The only other construction which I would acknowledge as a possible alternative is that, as a matter of business efficacy, the "no other conditions" assurance would still allow a reclaim if the contracts terminated within three years for cause. However, that would not assist Thinc, because it did not terminate for cause, and could not. In my judgment, this ground of appeal must also fail. "No reliance" The third ground of appeal, albeit only briefly addressed in Thinc's skeleton and by Mr Kealey, was that there was no reliance shown by the Armstrongs. The argument here is that there was no evidence that the Armstrongs understood the assurance in the same way as the judge interpreted it. I disagree. The judge made findings of reliance, which he was fully justified to make. There was evidence, and it stood to reason, that the Armstrongs relied on the "no other conditions" assurance when they applied to join up and signed up with Thinc. It is true that there could still be a question as to what the assurance amounted to – for instance could it be interpreted as permitting reclaim of the payment upon termination by Thinc without cause? However, it would be ridiculous to suppose that that is how they viewed the assurance, and it was plain from Mrs Armstong's evidence that they did not. Clause 5.3 Finally, I should mention clause 5.3 of the supplemental contract, which under the heading of "General" provided as follows: "If there is a conflict between the terms of any agreement made pursuant to this Supplemental Offer and those of any other contract or agreement between you and Thinc Group Limited, Thinc Group Limited will determine reasonably which terms are to prevail." Mr Kealey submitted that this clause entitled Thinc to say that the provisions of clause 4 were to prevail over the collateral warranty. This was an entirely new point. It appears not to have been advanced at trial, and figures nowhere in any grounds of appeal. It is not in Thinc's skeleton argument. In such circumstances, it is not open to Thinc, for there is no sign that Thinc purported at any time to operate this clause, and in any event it would raise new factual questions. However, it also seems to me to be something of an own goal. The supplemental contract itself contemplates that there may well be a collateral contract outside the supplemental contract. Thinc's provision for that eventuality is to claim a right for Thinc to "determine reasonably which terms are to prevail". However, although the point is not formally before the court, in the circumstances found by the judge it would appear to me to be impossible for Thinc "reasonably" to determine that clause 4 should prevail over the collateral warranty found. That would be to arrogate to itself the right to recover the supplemental payment for itself, without cause, by terminating on notice, having put forward a reason which the judge had found was invalid, and to keep for itself the client base of the Armstrongs for which the supplemental payment was the quid pro quo; and all against the background of the collateral contract which is the hypothesis of the exercise. Conclusion For these reasons, I would dismiss the appeal. Both parties also sought an appeal on costs, but were refused permission to appeal on paper. The Armstrongs did not renew their application, but Thinc did, to be heard at the same time as this appeal. However, Thinc did not pursue its application at the hearing before us. Thinc's application is therefore dismissed. Lord Justice McFarlane : I agree. Lord Justice Laws : I also agree.

JISCBAILII_CASE_PROPERTY BAILII Citation Number: [1991] EWCA Civ 1 Court of Appeal 23 January 1991 B e f o r e : Lord DONALDSON OF LYMINGTON MR, Lord Justice RUSSELL and Lord Justice NOLAN ____________________ Between: TAGRO V CAFANE AND ANOTHER ____________________ Robert Carnwath QC and William Geldart (instructed by John Gittens & Co) appeared on behalf of the appellant; David Neuberger QC and Hugh Jackson (instructed by Anthony Gold Lerman & Muirhead) represented the respondent. ____________________ Giving judgment, LORD DONALDSON OF LYMINGTON MR said: This appeal is a cautionary tale for landlords who are minded unlawfully to evict their tenants by harassment or other means. The facts are these. Miss Tagro was the residential tenant of a first floor front-room in premises at 116 Landor Road, Stockwell, London SW9. That was a bed-sitting-room and she had the use of the kitchen, bathroom and toilet jointly with the occupier of another room on that floor. Mr Cafane was Miss Tagro's landlord. He was the tenant of the whole building, the ground floor of which was used for his second-hand furniture business. The first floor, to which I have already referred, was used to provide these two bed-sitting-rooms, and there was a second floor which was similar to the first floor. The freehold owner of the premises was Lambeth London Borough Council and they had let the whole premises to Mr Cafane on a tenancy, which was determinable on one month's notice, subject always, of course, to the effect of the Landlord and Tenant Act 1954. Mr Cafane appeals against a judgment of His Honour Judge Simpson, given in the Lambeth County Court on November 24 1989, whereby he awarded £ 31,000 damages to Miss Tagro for unlawful eviction, those damages being claimed by her under sections 27 and 28 of the relatively new Housing Act of 1988. In addition, he awarded her £ 15,588.28 damages for trespass to her personal belongings which were on the premises. This latter judgment was also given against the second defendant, a Mr Patel, who was the agent of Mr Cafane. Mr Patel does not appeal in respect of that part of the judgment, nor does Mr Cafane. The appeal is limited to the judgment for £ 31,000, which was solely against Mr Cafane because he alone was the landlord. The defendants were not represented below, but we have been greatly assisted by the fact that Mr Cafane has been represented in this court by Mr Robert Carnwath QC and Mr William Geldart, who have put in an admirable skeleton argument which, of course, Mr Carnwath has supplemented orally. The further facts are these. It was in August 1989 that war really broke out, but some mention should be made of the previous history because it obviously affected the reaction of the tenant. For example, on one occasion she had been woken up at two o'clock in the morning with a demand for rent. There was some dispute as to whether the rent was due, but it really does not matter because two o'clock in the morning is not a time at which any landlord is entitled to demand rent from his tenant or even remind the tenant that rent is due. On another occasion there was even more outrageous conduct. Miss Tagro was visiting the lavatory, which was situated in the bathroom, and the landlord, or somebody on his behalf, came and kicked the door down. She complained previously of having been referred to as a black bastard and of loud music being used to disturb her enjoyment of the flat and so on. That was the background. On August 3 she returned to the room to find herself locked out and the locks changed. There has been no challenge in this court, and there could not be any serious challenge, to the fact that the locks were changed with the intention of evicting her. There was some suggestion at one stage that a number of keys had been floating around and got into the possession of various other people and that the lock was changed for security purposes. The judge rejected that on his assessment of the evidence in view of the fact that it was some days later before Miss Tagro was ever offered a key which actually fitted the lock. Faced with that situation, on August 4, the next day, she obtained an ex parte injunction to readmit her to the premises and allow her access to her belongings. That injunction was very properly for a limited period, being given ex parte, and it came up for renewal on August 7, when it was continued, Mr Cafane having taken no step whatever to comply with it in the meantime. The application to continue the injunction was coupled with an application to commit for contempt of court. On August 8 or 9 - it matters not which - Mr Cafane relented to the extent that he offered Miss Tagro a key. Her evidence about this I can take from her affidavit: I collected the key late morning on Wednesday August 9 1989 in the office of Messrs Mohabir & Co and went to the building. The lock to the front door was broken and, in fact, I did not need the key to enter. I went upstairs to the premises. Everything inside was in chaos. Many things were broken. A large amount of my belongings were stolen. On the advice of my solicitor I called the police, who arrived, then had to leave on an emergency call. They said they would be back to take fingerprints and that I should not touch anything shiny or any door or wardrobe or handle until they were able to return which at the time of swearing this affidavit they have not done although I have been reminding them. In the late afternoon my solicitor's surveyor arrived to take photographs and draw up a schedule of broken items. Later in her affidavit, she stated: I did not sleep at the premises on the night of Wednesday August 9 1989. This was partly because the police told me not to touch any of the objects in the premises including everything which was shiny and partly because the lock to the front of the building was damaged and would not 'lock', leaving me with greatly reduced security. The main reason however was that I had by then become too frightened of the defendants. I have not returned to the premises to sleep and do not intend to do so. After the recent events outlined above I cannot conceive of returning to the premises. I would add that the state of the premises to which Miss Tagro swore in her affidavit was attributed by the landlord to the fact that there had been a burglary. The learned judge wholly rejected the suggestion that there had been a burglary. It is perhaps inherently unlikely that there was one, in that the damage done to the flat was not the sort of damage that one would expect from a burglar who was intent upon removing goods. Such an intruder does not smash the goods and the flat itself. Any judge would be entitled to take judicial notice that that was an unusual way of proceeding. At all events, the judge clearly formed the view that this so-called burglary never took place and that what had happened was that, having locked Miss Tagro out, Mr Cafane or those acting on his behalf were determined to make certain that under no circumstance would she be prepared to return even if they were eventually obliged to let her in again as a result of the court order; and of course, they were brilliantly successful. One other date needs to be mentioned because it is relevant to Mr Carnwath's arguments and that is August 25 1989. The proceedings originally were in support of the ex parte injunction and claimed an injunction ordering the defendants to readmit the plaintiff to the building and premises forthwith and to deliver keys to the building to the plaintiff and further restraining the defendants, their servants or agents or otherwise from further interfering with the plaintiff's quiet enjoyment of the premises and from further interfering with the plaintiff and from further trespassing on the premises or the plaintiff's goods and for damages. There was no claim under, or for damages under, section 27 of the Housing Act 1988. That claim was introduced by fairly extensive amendment on August 25 1989. As I have already made clear, this is a claim under the Housing Act and the defences raised also arise under that Act. The principal defences arise under section 27(6)(b) and section 27(7)(b) of the Act. So let me turn to the wording of the Act itself. Section 27 is headed 'Damages for unlawful eviction' and provides: (1) This section applies if, at any time after 9th June 1988, a landlord (in this section referred to as 'the landlord in default') or any person acting on behalf of the landlord in default unlawfully deprives the residential occupier of any premises of his occupation of the whole or part of the premises. I do not think I need refer to subsection (2) save to say that it provides for similar treatment where there is what might be described as constructive eviction of the residential occupier as contrasted with an actual eviction, namely conduct which is such that the occupier cannot reasonably be expected to remain, although physically he or she could remain, and the occupier accordingly gives up his occupation of the premises. The subsections continue: (3) Subject to the following provisions of this section, where this section applies, the landlord in default shall, by virtue of this section, be liable to pay to the former residential occupier, in respect of his loss of the right to occupy the premises in question as his residence, damages assessed on the basis set out in section 28 below. (4) Any liability arising by virtue of subsection (3) above -- (a)   shall be in the nature of a liability in tort; and (b)   subject to subsection (5) below, shall be in addition to any liability arising apart from this section (whether in tort, contract or otherwise). (5) Nothing in this section affects the right of a residential occupier to enforce any liability which arises apart from this section in respect of his loss of the right to occupy premises as his residence; but damages shall not be awarded both in respect of such a liability and in respect of a liability arising by virtue of this section on account of the same loss. (6) No liability shall arise by virtue of subsection (3) above if -- (a)   before the date on which proceedings to enforce the liability are finally disposed of, the former residential occupier is reinstated in the premises in question in such circumstances that he becomes again the residential occupier of them; or (b)   at the request of the former residential occupier, a court makes an order (whether in the nature of an injunction or otherwise) as a result of which he is reinstated as mentioned in paragraph (a) above; and, for the purposes of paragraph (a) above, proceedings to enforce a liability are finally disposed of on the earliest date by which the proceedings (including any proceedings on or in consequence of an appeal) have been determined and any time for appealing or further appealing has expired, except that if any appeal is abandoned, the proceedings shall be taken to be disposed of on the date of the abandonment. I will come to subsection (7) in a moment. I would like first of all to deal with the argument on subsection (6). Before doing so I ought to mention that in subsection (9) ''residential occupier', in relation to any premises, has the same meaning as in section 1 of the 1977 Act', that is to say the Protection from Eviction Act 1977, which in subsection 1(1) provides: In this section 'residential occupier', in relation to any premises, means a person occupying the premises as a residence, whether under a contract or by virtue of any enactment or rule of law giving him the right to remain in occupation or restricting the right of any other person to recover possession of the premises. There is no dispute, of course, that Miss Tagro was a residential occupier, and immediately after August 3 she was a former residential occupier. Mr Carnwath says in relation to subsection (6) that, in the case of Miss Tagro, the court made an order as a result of which she was reinstated as mentioned in para (a), that is to say she was reinstated in the premises in question in such circumstances that she again became the residential occupier of them. He says it cannot seriously be suggested that a tenant who has been unlawfully evicted and who the landlord is able and willing to reinstate simply has an option whether to accept reinstatement or not. There are two quite separate questions there. As to the first - was Miss Tagro actually reinstated? - for my part I have no doubt or hesitation in saying that she was not and could not be at that stage. Reinstatement does not consist in merely handing the tenant a key to a lock which does not work and inviting her to resume occupation of a room which has been totally wrecked. Therefore, on the facts of this case, that is an argument which simply does not run. On the question of whether the tenant has a right to choose whether to accept the offer, subject to a point which arises under a later subsection, I think, for my part, that the tenant has. Mr Carnwath says that cannot be right because it means to say that a tenant who is unlawfully evicted, perhaps for a relatively short period, is able to achieve some enormous financial reward which is only available to him if he does not accept the offer of reinstatement. There is, of course, a good deal to be said for Mr Carnwath's argument, as there always is for Mr Carnwath's arguments, but there is no indication in the statute that the tenant does not have that choice. It is difficult to see how you can reinstate a tenant who does not wish to be reinstated. The apparent intention of Parliament is not as unreasonable as it might appear at first when you take into account the fact that, under section 28, to which I will come in a moment, the damages are designed to be equal in amount to the benefit which the landlord gets by having had the tenant removed from the premises, namely the increase in the value to him of the premises. It is therefore quite intelligible that Parliament should have said: 'Well, if the tenant does not choose to go back, at least the landlord shall not benefit by it', and to have proceeded on that basis. So, for my part, I think that the argument that there is any defence for Mr Cafane under subsection (6) is quite untenable. I turn, therefore, to subsection (7), which provides: If, in proceedings to enforce a liability arising by virtue of subsection (3) above, it appears to the court -- (a)   that, prior to the event which gave rise to the liability, the conduct of the former residential occupier or any person living with him in the premises concerned was such that it is reasonable to mitigate the damages for which the landlord in default would otherwise be liable, or (b)   that, before the proceedings were begun, the landlord in default offered to reinstate the former residential occupier in the premises in question and either it was unreasonable of the former residential occupier to refuse that offer or, if he had obtained alternative accommodation before the offer was made, it would have been unreasonable of him to refuse that offer if he had not obtained that accommodation, the court may reduce the amount of damages which would otherwise be payable to such amount as it thinks appropriate. Let me say straightaway that para (a) has no application whatever to this case. No suggestion has ever been made that Miss Tagro's conduct was such that it could be criticised and would make it reasonable to mitigate the damage. The two paragraphs seem to me to involve two quite different concepts. Para (a) is dealing with what one might describe as a contributory negligence concept, although contributory negligence, in the context of an unlawful eviction, is clearly not a happy phrase. But it is the idea that in some measure, although not in such measure as in any way to excuse the conduct of the landlord, the tenant has brought the problem on his own head and the paragraph enables the court to mitigate the consequences for the landlord. Para (b) seems to me to borrow something from the concept of the defence of tender in relation to a debt, a defence which is only available if tender takes place before the proceedings are begun. It is, therefore, necessary to consider what is meant by the phrase 'before the proceedings were begun' in para (b). It will be remembered that subsection (7) begins with the words, 'If, in proceedings to enforce a liability by virtue of subsection (3) above . . .' Mr Neuberger would have argued, if he had been given the opportunity of doing so, that that meant the totality of the proceedings which were begun at the beginning of August with the claim for an injunction and that, therefore, there is no question here of any offer of reinstatement before the proceedings were begun. Mr Carnwath argues strongly that these were not proceedings to enforce a liability until an amendment took place later in August and that para (b), with its reference to 'before the proceedings were begun', cannot be referring to proceedings which had nothing whatever to do with the enforcement of a liability under subsection (3). I am bound to say that, for my part, although I have to accept that it is an obiter expression of opinion on the facts of this case, I think Mr Carnwath is wholly correct in his argument. I say it is obiter because the question would arise as a matter of decision only if Mr Carnwath could make good his argument that there was an offer to reinstate the former residential occupier in the premises in question at any time and, on the facts as I see them, there never was any such offer. All that was on offer was to give her the key and to readmit her. Certainly, there was no suggestion that the room was put into proper order, the locks repaired or any offer made to Miss Tagro to allow her to resume occupation in any realistic sense of the word. But, had it arisen, as I say, and it may arise in other cases, my view would have been that the subsection is referring to a time before there is a claim in the proceedings under sections 27 and 28 of the Act. So much for the appeal in respect of liability. But Mr Carnwath, on behalf of Mr Cafane, has also addressed arguments to us on the subject of quantum. That is governed by section 28 and I think I need only read subsections (1) and (2): (1) The basis for the assessment of damages referred to in section 27(3) above is the difference in value, determined as at the time immediately before the residential occupier ceased to occupy the premises in question as his residence, between -- (a)   the value of the interest of the landlord in default determined on the assumption that the residential occupier continues to have the same right to occupy the premises as before that time; and (b)   the value of that interest determined on the assumption that the residential occupier has ceased to have that right. (2) In relation to any premises, any reference in this section to the interest of the landlord in default is a reference to his interest in the building in which the premises in question are comprised (whether or not that building contains any other premises) together with its curtilage. On the facts of this case, the learned judge was concerned to consider not the value of the room which had been let to Miss Tagro but the value of the whole building, including four bed-sitting-rooms and the business premises below. Miss Tagro, or those acting on her behalf, called a surveyor, who was an associate member of the Royal Institution of Chartered Surveyors, to give evidence. He had earlier given them a valuation before the judge and he had revised his valuation because he thought there had been a change in market conditions by the time of the hearing. In this he was wrong because the relevant time is immediately before the residential occupier ceased to occupy the premises (subsection (1)). He then gave oral evidence, and his evidence was, first of all, as to a freehold value, which was really immaterial because Mr Cafane was not a freehold owner, and he went on to consider the rental value of the whole building, including the shop. He capitalised a profit rental and he considered the extent to which the value of Mr Cafane's interests would be reduced by the presence of Miss Tagro. He said: I start with freehold with occupancy ie £ 89,000 then made deduction of £ 45,000 ie amount of rent × 10 being capital value of Mr Cafane's interest. This produces £ 44,000 which represents value of leasehold interest with Miss Tagro as sitting tenant. £ 75,000 [which was the figure that he had valued Mr Cafane's interest with vacant possession] minus £ 44,000 equals £ 31,000. This represents the difference in value of the leasehold interest with or without Miss Tagro. £ 31,000 is my final figure for damages. Mr Cafane, who, I imagine, knows something about properties, was invited to cross-examine and asked whether the valuation took account of disrepair because, in the indirect way in which judges normally take notes of evidence, the following sentence appears: Cross-examined -- this takes into account disrepair as in my report. Then there was a re-examination on the same point. Mr Cafane called no evidence to dispute this figure. Mr Carnwath is therefore reduced to saying that the learned judge can be faulted on the footing that no reasonable judge could have accepted that evidence. That submission he made simply and with force and with slightly more difficulty when Russell LJ said, 'Well, what should he have done?' It is true, I suppose, that he could have adjourned the hearing and urged the landlord to call expert evidence. But is difficult to see how he could have said, 'I am not satisfied that any damages are due on this evidence' and, if he is not to say that, then he would have in some way to reduce the surveyor's figure on the basis, I suppose, of what he (the judge) thought were proper values. Had he done so, this court would probably have quashed his decision on the grounds that he was acting not upon evidence and not upon something of which a judge should take judicial knowledge but upon some extraneous view as to a matter of fact. But, essentially, what Mr Carnwath concentrates upon is his submission that there is no evidence that the judge fully appreciated that this was only a monthly tenancy as far as Mr Cafane was concerned and that, had he appreciated that, he could not have accepted this evidence. The difficulty about that argument - apart from any other difficulties and there are many - is that the surveyor was entitled to have regard to the realities of the situation and to have regard to the extent to which Lambeth Council were likely to be minded to serve any notice to quit and would be successful in any event, bearing in mind the provisions of the Landlord and Tenant Act 1954. If the surveyor, applying his local knowledge and professional expertise, came to the conclusion that the lease, other things being equal, notwithstanding that it could be theoretically determinable on a month's notice, would go on virtually for ever, there could be no possible faulting of that aspect of his valuation. He also says that the surveyor should have approached the matter on the basis that the value of the property without Miss Tagro would have been virtually nil because the lease contains prohibitions against assignments and subletting and, says Mr Carnwath, if we were deciding what Mr Cafane could have got for premises without Miss Tagro, no one would have bought it because, as soon as they took an assignment, they would be faced with an application for forfeiture by Lambeth London Borough Council. There is the scintilla of a point of law there in that clearly the court would have to have regard to what was the interest of the landlord whose value had to be determined under section 28(1)(b), but they would have had some guidance from section 28(3), which provides: For the purposes of the valuations referred to in subsection (1) above, it shall be assumed -- (a)   that the landlord in default is selling his interest on the open market to a willing buyer; (b)   that neither the residential occupier nor any member of his family wishes to buy; and (c)   that it is unlawful to carry out any substantial development of any of the land in which the landlord's interest subsists or to demolish the whole or part of any building on that land. I do not understand that section to contemplate, as Mr Carnwath's argument contemplates, that the premises will be treated as virtually inalienable and having no value in consequence. Subsection (3) clearly contemplates that there shall be no increase in the damages because the effect of the tenant being dispossessed is that it enables some very valuable development to take place. But the whole concept of the landlord in default selling his interest on the open market to a willing buyer assumes that he can sell it on the open market to a willing buyer, and that involves the subsidiary proposition on the facts of this case that the willing buyer would take a lease from Lambeth Council on a monthly basis subject to the Landlord and Tenant Act with a covenant against subletting or assignment in exactly the same way as Mr Cafane had done. In my judgment, there is nothing in that point. I accept that the damages do seem to be high, but I have to warn myself against using any knowledge that I may have gained in other ways to support that view, and I am quite unable to say that the judge was at fault. If we were to interfere on this ground, it could only be on the basis of sending it back for a rehearing designed to enable Mr Cafane to call valuation evidence. It is not clear to me why he should have a second opportunity to call valuation evidence when he had the opportunity originally and did not choose to avail himself of it. Accordingly, and for those reasons, I would dismiss the appeal. RUSSELL and NOLAN LJJ agreed and did not add anything. The appeal was dismissed with costs, such order not to be enforced without further order. Legal aid taxation was ordered. The electronic text of this judgment was provided by Estates Gazette, whose assistance is gratefully acknowledged.

FIRST SECTION CASE OF BURDOV v. RUSSIA (No. 2) (Application no. 33509/04) JUDGMENT STRASBOURG 15 January 2009 FINAL 04/05/2009 This judgment has become final under Article 44 § 2 of the Convention. In the case of Burdov v. Russia (no. 2), The European Court of Human Rights (First Section), sitting as a Chamber composed of: Christos Rozakis, President,Anatoly Kovler,Elisabeth Steiner,Dean Spielmann,Sverre Erik Jebens,Giorgio Malinverni,George Nicolaou, judges,and André Wampach, Deputy Section Registrar, Having deliberated in private on 16 December 2008, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 33509/04) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Russian national, Mr Anatoliy Tikhonovich Burdov (“the applicant”), on 15 July 2004. 2. The Russian Government (“the Government”) were represented by Ms V. Milinchuk, former Representative of the Russian Federation at the European Court of Human Rights, and by Mr G. Matyushkin, Representative of the Russian Federation at the European Court of Human Rights. 3. The applicant complained under Article 6 of the Convention and Article 1 of Protocol No. 1 about the authorities’ failure to comply with judgments delivered by domestic courts in his favour. 4. On 22 November 2007 the President of the First Section decided to communicate the applicant’s complaint to the Government. It was also decided to examine the merits of the application at the same time as its admissibility (Article 29 § 3 of the Convention). 5. On 3 July 2008 the Chamber decided, under Rule 54 § 2 (c) of the Rules of Court, to grant the case priority under Rule 41 and to invite the parties to submit written observations on the above application. The Chamber furthermore decided to inform the parties that it was considering the suitability of applying a pilot-judgment procedure in the case (see Broniowski v. Poland [GC], no. 31443/96, §§ 189-94 and the operative part, ECHR 2004-V, and Hutten-Czapska v. Poland [GC], no. 35014/97, §§ 231‑39 and the operative part, ECHR 2006-VIII). The applicant submitted further observations on 11 August 2008 and the Government on 26 September 2008. THE FACTS I. THE CIRCUMSTANCES OF THE CASE 6. The applicant, Mr Anatoliy Tikhonovich Burdov, is a Russian national who was born in 1952 and lives in Shakhty, in the Rostov region of the Russian Federation. 7. On 1 October 1986 the applicant was called up by the military authorities to take part in emergency operations at the site of the Chernobyl nuclear plant disaster. The applicant was engaged in the operations until 11 January 1987 and, as a result, suffered from extensive exposure to radioactive emissions. He is entitled to various social benefits in this connection. 8. Considering that the competent State authorities failed to pay these benefits in full and in due time, the applicant repeatedly sued them in domestic courts from 1997 onwards. The courts repeatedly granted the applicant’s claims but a number of their judgments remained unenforced for various periods of time. A. The Court’s judgment of 7 May 2002 in Burdov v. Russia and further developments 1. The Court’s findings 9. On 20 March 2000 the applicant first complained before the Court about non-enforcement of domestic judicial decisions (application no. 59498/00). In its judgment of 7 May 2002, the Court found that the Shakhty City Court’s decisions of 3 March 1997, 21 May 1999 and 9 March 2000 had remained unenforced wholly or in part at least until 5 March 2001, when the Ministry of Finance took the decision to pay in full the debt owed to the applicant. The Court accordingly held that there had been violations of Article 6 of the Convention and of Article 1 of Protocol No. 1 on account of the authorities’ failure for years to take the necessary measures to comply with these decisions (see Burdov v. Russia, no. 59498/00, §§ 37-38, ECHR 2002‑III). 2. Resolution ResDH(2004)85 of the Committee of Ministers concerning the Court’s judgment of 7 May 2002 10. Under the terms of Article 46 § 2 of the Convention, the Court’s judgment of 7 May 2002 in Burdov was transmitted to the Committee of Ministers for the supervision of its execution. The Committee invited the Government to inform it of the measures which had been taken in consequence of the Court’s judgment of 7 May 2002, having regard to the Russian Federation’s obligation under Article 46 § 1 to abide by it. On 22 December 2004 the Committee adopted Resolution ResDH(2004)85 in this case. The measures taken by the Russian authorities were summarised by the Government in the Appendix to this Resolution: “... With regard to individual measures, the amounts due under the domestic judicial decisions were paid to the applicant on 5 March 2001. ... Subsequently, a fresh indexation of the monthly allowance was ordered by the Shakhty City Court on 11 July 2003 (final on 1 October 2003). The social authorities continue to comply with the domestic judicial decisions by regularly paying the sums awarded. In addition, the following general measures were adopted by the Russian authorities to comply with the European Court’s judgment. (a) Resolving similar cases At the outset, the government paid the arrears accumulated as a result of the non-execution, as in the present case, of domestic judgments ordering the payment of compensation and allowances for the Chernobyl victims in the applicant’s position (a total of 2,846 million Russian roubles were paid between January and October 2002). 5,128 other domestic judgments concerning the indexation of the allowances for the victims of Chernobyl were executed by the authorities. The government has also improved its budgetary process to ensure that the necessary budgetary means are allocated to social security bodies (2,152,071,000 Russian roubles were allocated for 2003, 2,538,280,500 Russian roubles for 2004, and 2,622,335,000 for 2005) to allow them continuously to meet their financial obligations arising, inter alia, from similar judgments. ... (b) New indexation system introduced through legislation As regards the obligation of continuous indexation of the amounts awarded by domestic courts, the legislation in force at the relevant time provided for the cost of living as an index for the calculation of allowances. By a decision of 19 June 2002, the Constitutional Court declared the relevant legislative provisions unconstitutional, in so far as this system was found to lack clarity and predictability; in this decision, the Constitutional Court referred, inter alia, to the conclusions of the European Court in the Burdov judgment. Consequently, on 2 April 2004, the Russian Parliament amended the legislation governing the social insurance of Chernobyl victims. The new law, which has been in force since 29 April 2004, provides for a new system of indexation of allowances, which is based on the inflation rate used for the calculation of the federal budget for the next financial year. (c) Publication and dissemination of the judgment The European Court’s judgment in [the] Burdov case has been published in Rossijskaia Gazeta (on 4 July 2002), the main official periodical publishing all laws and regulations of the Russian Federation and widely disseminated to all authorities. The judgment has also been published in a number of Russian legal journals and Internet databases, and is thus easily available to the authorities and the public. (d) Conclusion In view of the foregoing, the Russian government considers that the measures adopted following the present judgment will prevent new similar violations of the Convention in respect of the category of persons in the applicant’s position and that the Russian Federation has thus fulfilled its obligations under Article 46 § 1 of the Convention in the present case. The government also believes that the measures adopted constitute, moreover, a noticeable step towards resolving the more general problem of non-enforcement of domestic court decisions in various areas, as highlighted in particular by other cases brought before the European Court against the Russian Federation. The government continues to take measures to remedy this problem, not least in the context of the execution, under the Committee’s supervision, of other judgments of the European Court.” 11. The Committee of Ministers was satisfied that on 16 July 2002, within the time-limit set, the Government had paid the applicant the sum of just satisfaction provided for in the judgment of 7 May 2002. It further noted, in particular, the measures taken in respect of the category of persons in the applicant’s position. Having regard to all the measures adopted, the Committee concluded that the Government had exercised its functions under Article 46 § 2 of the Convention in this case. The Committee noted at the same time that the more general problem of non-execution of domestic court decisions in the Russian Federation was being addressed by the authorities, under the Committee’s supervision, in the context of other pending cases. B. Enforcement of new domestic judgments in the applicant’s favour 1. Shakhty City Court’s judgment of 17 April 2003 12. On 17 April 2003 the Shakhty City Court ordered the Directorate of Labour and Social Development (Управление труда и социального развития) of Shakhty to pay the applicant 15,984.80 Russian roubles (RUB) as compensation for delays in payment of benefits in accordance with Article 208 of the Code of Civil Procedure. On 9 July 2003 the judgment was upheld by the Rostov Regional Court and became final. 13. During 2003-05 the applicant consecutively submitted the writ of execution to the defendant authority, to bailiffs, to the Federal Treasury and then again to the defendant authority. On 19 August 2005 the authorities transferred the amount of the court’s award to the applicant’s account. 2. Shakhty City Court’s judgment of 4 December 2003 14. On 4 December 2003 the Shakhty City Court ordered the Directorate of Labour and Social Development to pay the applicant RUB 68,463.54 as default interest for delays in payments between 1999 and 2001, in accordance with the Compulsory Social Insurance Act 1998 (no.125-ФЗ). The judgment was not appealed against and became final on 15 December 2003. 15. According to the applicant, he submitted the writ for execution to the respondent department on the same date. On an unspecified date the writ was submitted to the Shakhty Bailiffs’ Department; the latter decided on 30 June 2004 that the judgment was impossible to enforce as the debtor’s possessions could not be seized. 16. On 14 November 2005 the Shakhty City Court granted the defendant authority’s request for correction of an arithmetic error and reduced the award to RUB 68,308.42. On 9 March 2006 the same court granted the applicant’s request for correction of an arithmetic error and ordered the defendant authority to pay the applicant RUB 108,251.95. On 18 October 2006 the authorities paid the latter amount to the applicant. 3. Shakhty City Court’s judgment of 24 March 2006 17. On 24 March 2006 the Shakhty City Court ordered the Department of Labour and Social Development (Департамент труда и социального развития) of Shakhty to index-link the monthly food allowance due to the applicant as of 1 January 2006. The court set the amount of monthly payments at RUB 1,183.73 with subsequent indexation and ordered a one-off payment of RUB 36,877.06 for compensation for shortfalls in previous monthly payments. In addition, as of 1 January 2006 the Department was ordered to proceed with monthly payments of RUB 1,972.92 with subsequent indexation in respect of compensation for health damage. The court further ordered the defendant authority to pay the applicant RUB 4,980.24 and RUB 13,312.46 as compensation for shortfalls in monthly payments made between 2000 and 2005 for health damage and food allowance respectively and an additional indexation payment of RUB 1,652.35 for health damage. On 22 May 2006 the judgment was upheld by the Rostov Regional Court and became final. 18. On 20 July 2007 the Shakhty City Court corrected an arithmetic error in its judgment and changed the initially awarded amount of RUB 4,980.24 to RUB 5,222.78. 19. On 2 November 2006 the judgment of 24 March 2006 was executed in its major part: a total of RUB 67,940.56 was credited to the applicant’s account. At the same time, the Ministry of Finance did not upgrade the monthly payments as ordered by the court’s judgment and the applicant continued to receive such payments at a lower level. On 1 July 2007 the Ministry decided to upgrade them. On 17 August 2007 the applicant received RUB 9,112.26 as compensation for shortfalls in monthly payments accumulated until that date. 4. Shakhty City Court’s judgments of 22 May 2007 and 21 August 2007 20. On 22 May 2007 the Shakhty City Court decided that the Department of Labour and Social Development was to pay the applicant as of 1 June 2007 the amount of RUB 17,219.43 monthly, with subsequent indexation, in respect of compensation for health damage. In addition, the Department was to pay the applicant RUB 188,566 as compensation for shortfalls in previous monthly payments. The judgment was not appealed against and became final on 4 June 2007. It was enforced on 5 December 2007. 21. On 21 August 2007, the Shakhty City Court ordered the Federal Labour and Employment Agency to pay the applicant RUB 225,821.73 as compensation for certain delayed payments in respect of health damage between 2000 and 2007. The judgment was not appealed against and became final on 3 September 2007. It was enforced on 3 December 2007. II. RELEVANT DOMESTIC MATERIALS A. Execution of domestic judgments 1. Law on Enforcement Proceedings 22. Section 9 of the Federal Law on Enforcement Proceedings of 21 July 1997 (no. 119-ФЗ), as in force at the material time, provided that a bailiff was to set a time-limit of up to five days for the defendant’s voluntary compliance with a writ of execution. The bailiff was also to warn the defendant that coercive action would follow should the defendant fail to comply with the time-limit. Under section 13 of the Law, the enforcement proceedings had to be completed within two months of the receipt of the writ of execution by the bailiff. 2. Special execution procedure for the judgments delivered against the State and its entities 23. In 2001-05 the judgments delivered against the public authorities were executed in accordance with a special procedure established, inter alia, by the Government’s Decree no. 143 of 22 February 2001 and, subsequently, by Decree no. 666 of 22 September 2002, entrusting execution to the Ministry of Finance (see further details in Pridatchenko and Others v. Russia, nos. 2191/03, 3104/03, 16094/03 and 24486/03, §§ 33-39, 21 June 2007). By a judgment of 14 July 2005 (no. 8-П), the Constitutional Court considered certain provisions governing the special execution procedure to be incompatible with the Russian Constitution. Following the judgment, the Law of 27 December 2005 (no. 197-ФЗ) introduced a new Chapter in the Budget Code modifying this special procedure. The Law notably empowered the Federal Treasury to execute judgments against legal entities funded by the federal budget and the Ministry of Finance to execute judgments against the State. Under Article 242 § 2 (6) of the Budget Code, the judgments must be executed within three months after receipt of the necessary documents. 24. Further special procedures governing payment of social benefits to persons who suffered from exposure to radioactive emissions in the Chernobyl disaster were set by Law no. 1244-1 of 15 May 1991 with subsequent amendments and by the Government’s Decrees no. 607 of 21 August 2001, no. 73 of 14 February 2005 and no. 872 of 30 December 2006. In 2002-04 compensation for health damage was ensured by the Ministry of Labour within the limits of the budgetary allocations provided for the relevant fiscal year. In 2005-06 such compensation was ensured by territorial departments of the Federal Labour and Employment Agency and in 2007-08 by the Agency itself on the basis of registers submitted by social welfare bodies and within the limits of the budgetary allocations provided to that effect. 3. Report of the Commissioner for Human Rights of the Russian Federation 25. The 2007 Activities Report of the Commissioner for Human Rights of the Russian Federation pointed out that the perception of domestic judgments as what one might call “non-compulsory recommendations” was still a widespread phenomenon not only in society but also in State bodies. It noted that the non-enforcement problem had also arisen in respect of judgments of the Constitutional Court. According to the report, the problem had been discussed between December 2006 and March 2007 at special meetings in all federal circuits involving regional authorities and representatives of the President’s Administration. An idea thus emerged of setting up a national filter mechanism that would allow for examination of Convention complaints at the domestic level. The Commissioner concluded that joint efforts should be deployed with a view to eliminating the roots of the problem rather than simply reducing the number of complaints. B. Domestic remedies in respect of the non-execution or delayed execution of domestic judgments 1. Legal provisions (a) Civil law 26. Chapter 25 of the Code of Civil Procedure provides a procedure for challenging State authorities’ acts or inaction in courts. If a court finds that the complaint is well-founded, it orders the State authority concerned to remedy the breach or unlawfulness found (Article 258). 27. Article 208 of the Code of Civil Procedure provides for “indexation” of judicial awards: the court which made the award may upgrade it upon a party’s request in line with the increase in the official retail price index until the date of effective payment. Default interest and other compensation for pecuniary damage may in addition be recovered from the debtor for non-compliance with a monetary obligation and use of another person’s funds (Article 395 of the Civil Code). 28. Damage caused by unlawful action or inaction of State or local authorities or their officials is subject to compensation from the Federal Treasury or a federal entity’s treasury (Article 1069). Compensation for damage caused to an individual by unlawful conviction, prosecution, detention on remand or prohibition on leaving his or her place of residence pending trial is granted in full regardless of the fault of the State officials concerned and following the procedure provided for by law (Article 1070 § 1). Damage caused by the administration of justice is compensated if the fault of the judge is established by a final judicial conviction (Article 1070 § 2). 29. A court may hold the tortfeasor liable for non-pecuniary damage caused to an individual by actions impairing his or her personal non-property rights or affecting other intangible assets belonging to him or her (Articles 151 and 1099 § 1). Compensation for non-pecuniary damage sustained through an impairment of an individual’s property rights is recoverable only in cases provided for by law (Article 1099 § 2 of the Civil Code). Compensation for non-pecuniary damage is payable irrespective of the tortfeasor’s fault if damage was caused to an individual’s life or limb, sustained through unlawful criminal prosecution, dissemination of untrue information and in other cases provided for by law (Article 1100 of the Civil Code). (b) Criminal law 30. Article 315 of the Criminal Code provides for sanctions for persistent failure by any State official or civil servant to comply with a judicial decision that has entered into legal force. The sanctions include a fine, temporary suspension from service, community service (обязательные работы) for a maximum term of 240 hours or deprivation of liberty for a maximum term of two years. 2. Constitutional Court’s judgment of 25 January 2001 31. By Ruling no. 1-P of 25 January 2001, the Constitutional Court found that Article 1070 § 2 of the Civil Code was compatible with the Constitution in so far as it provided for special conditions on State liability for damage caused by the administration of justice. It clarified, nevertheless, that the term “administration of justice” did not cover judicial proceedings in their entirety but only judicial acts touching upon the merits of a case. Other judicial acts – mainly of a procedural nature – fell outside the scope of the notion “administration of justice”. 32. State liability for the damage caused by such procedural acts or failures to act, such as a breach of the reasonable time for court proceedings, could arise even in the absence of a final criminal conviction of a judge if the fault of the judge had been established in civil proceedings. The Constitutional Court emphasised, however, that the constitutional right to compensation by the State for the damage should not be tied in with the individual fault of a judge. An individual should be able to obtain compensation for any damage incurred through a violation by a court of his or her right to a fair trial within the meaning of Article 6 of the Convention. 33. The Constitutional Court held that Parliament should legislate on the grounds and procedure for compensation by the State for the damage caused by unlawful acts or failures to act of a court or a judge and determine territorial and subject matter jurisdiction over such claims. 3. Supreme Court’s decision of 26 September 2008 and the new Compensation Bill 34. On 26 September 2008 the Plenum of the Supreme Court adopted a decision (no. 16) to submit to the State Duma of the Russian Federation a draft constitutional law on compensation by the State of damage caused by violations of the right to judicial proceedings within a reasonable time and of the right to the execution within a reasonable time of judicial decisions that have entered into legal force (hereinafter “the Compensation Bill”). The Supreme Court also decided to submit to the State Duma a second draft law introducing changes in certain legal acts in connection with the adoption of the Compensation Bill. Both drafts were formally tabled in the State Duma on 30 September 2008. 35. The purpose of the Compensation Bill is to set up in Russia a domestic legal remedy in respect of violations of the rights to judicial proceedings within a reasonable time and to the execution of an enforceable judicial decision within a reasonable time (section 1(1)). It is also provided that the applicants in cases which have not yet been declared admissible by the Court may apply for compensation of damage under the Bill within six months after its entry into force planned for 1 January 2010 (section 19). The Bill empowers courts of general jurisdiction to consider cases brought against the State on alleged violations of the above-mentioned rights (section 3(1)) and provides for specific rules to govern the proceedings in such cases. The State is represented in the proceedings by the Ministry of Finance (section 3(3)). The latter has to prove that there was no violation of the reasonable-time requirement, while the plaintiff has to prove the existence of pecuniary damage (section 11(1)). To decide a case, the court assesses its complexity, the behaviour of the parties and other actors in the proceedings, and the acts or inaction of judicial or prosecution authorities, the parties to enforcement proceedings or the enforcement authorities. The court also assesses the duration of the violation and the importance of its consequences for the person affected (section 12). If the court finds a violation, it makes a monetary award for damage to be determined taking account of the specific circumstances of the case, of the requirements of equity and of the Convention standards (section 14). The court may take a separate decision finding a breach of law by a court or State official and order specific procedural actions to be taken, with a request to report back within a month (section 15). 36. The Supreme Court’s explanatory memorandum sets out the needs for additional budgetary allocations to ensure the implementation of the Compensation Bill. The average compensation per case is estimated at 3,050 euros (EUR) having regard to the fact that the just satisfaction amounts awarded by the European Court of Human Rights in non-enforcement cases have usually ranged between EUR 1,200 and EUR 4,900. 37. The second draft law introduces amendments to other legal acts. Under new Article 1070 § 1 of the Civil Code, damage caused by violations of the reasonable-time requirement by State authorities in judicial proceedings or in the execution of judgments is compensated from the Federal Treasury. Under new Article 242 § 2 of the Budget Code, judicial decisions granting such compensation must be enforced within two months. 4. The Address by the President of the Russian Federation to the Federal Assembly 38. In his Address to the Federal Assembly delivered on 5 November 2008, the President of the Russian Federation stated in particular that it was necessary to establish a mechanism for compensation of damage caused by violations of citizens’ rights to trial within a reasonable time and to the full and timely implementation of court decisions. The President stressed that the execution of court decisions was still a huge problem, which concerned all courts, including the Constitutional Court. He further stated that the problem was notably due to the lack of real accountability of officials and citizens who fail to execute court decisions and that this accountability was to be established. III. RELEVANT INTERNATIONAL MATERIALS A. Council of Europe 1. Committee of Ministers 39. On 3-5 December 2007 the Committee of Ministers resumed consideration under Article 46 § 2 of the Convention of the group of the Court’s judgments against Russia concerning failure to enforce or delays in the enforcement of domestic judgments (Timofeyev and Others, CM/Del/OJ/DH(2007)1013). The following decision was adopted by the Committee on 19 December 2007 (CM/Del/Dec(2007)1013 FINAL): “The Deputies, ... 1. recalled that these judgments reveal various structural problems in the Russian legal system which, by their nature and scale, severely affect its effectiveness and cause very numerous violations of the Convention an increasing number of which are complained of before the Court; 2. took note, with interest, of various measures adopted or being taken by certain competent authorities to prevent new similar violations and to remedy those that have already occurred by setting up or improving appropriate domestic procedures, measures which remain to be taken; 3. emphasised anew that the problems revealed by the judgments require urgent solutions in order to ensure that the relevant Convention rights are adequately protected at the domestic level, thus preventing an exceedingly high number of similar applications to the Court; 4. invited the competent authorities to continue bilateral consultations with the Secretariat with a view to establishing a proper strategy for adoption of the necessary measures, including the setting up of effective domestic remedies; ...” 40. The problems underlying the non-enforcement of domestic judgments in Russia and various measures taken or considered by the authorities in the context of the implementation of the Court’s judgments were addressed in detail in the Committee of Ministers’ documents CM/Inf/DH(2006)45 of 1 December 2006 and CM/Inf/DH(2006)19 rev3 of 4 June 2007. The latter document presented the progress so far achieved by the Russian authorities, pointed at a number of outstanding questions and proposed further measures, with a view to a comprehensive solution of the problem. The main avenues of action proposed were summarised as follows (see CM/Inf/DH(2006)19 rev3, cited above, p. 1): “– Improvement of budgetary procedures and of practical implementation of the budget decisions; – Identifying a specific State authority as a defendant; – Ensuring effective compensation for delays (indexation, default interest, specific damages, penalties for delays); – Increasing the effectiveness of domestic remedies for proper enforcement of judicial decisions; – Improvement of the legal framework governing compulsory execution against the public authorities; – Ensuring effective liability of civil servants for non-enforcement; Special consideration is given to possible ways of ensuring coherence of the present execution mechanisms by allowing the Treasury and the bailiffs to act in a complementary manner in their respective fields of competence and under appropriate judicial review. A strong emphasis is also put on possible ways of preventing litigation against the State through improved budgetary proceedings, which would allow the State to timely comply with its pecuniary obligations.” 41. In Recommendation Rec(2004)6 to member States on the improvement of domestic remedies adopted on 12 May 2004, the Committee of Ministers recommended, inter alia: “... that member States ... review, following Court judgments which point to structural or general deficiencies in national law or practice, the effectiveness of the existing domestic remedies and, where necessary, set up effective remedies, in order to avoid repetitive cases being brought before the Court ...” 42. The Appendix to the Recommendation further stated, inter alia: “Remedies following a ‘pilot’ judgment 13. When a judgment which points to structural or general deficiencies in national law or practice (‘pilot case’) has been delivered and a large number of applications to the Court concerning the same problem (‘repetitive cases’) are pending or likely to be lodged, the respondent State should ensure that potential applicants have, where appropriate, an effective remedy allowing them to apply to a competent national authority, which may also apply to current applicants. Such a rapid and effective remedy would enable them to obtain redress at national level, in line with the principle of subsidiarity of the Convention system. 14. The introduction of such a domestic remedy could also significantly reduce the Court’s workload. While prompt execution of the pilot judgment remains essential for solving the structural problem and thus for preventing future applications on the same matter, there may exist a category of people who have already been affected by this problem prior to its resolution. ... ... 16. In particular, further to a pilot judgment in which a specific structural problem has been found, one alternative might be to adopt an ad hoc approach, whereby the State concerned would assess the appropriateness of introducing a specific remedy or widening an existing remedy by legislation or by judicial interpretation. ... 18. When specific remedies are set up following a pilot case, governments should speedily inform the Court so that it can take them into account in its treatment of subsequent repetitive cases.” 2. Parliamentary Assembly 43. In Resolution 1516 (2006) on implementation of judgments of the European Court, adopted on 2 October 2006, the Parliamentary Assembly noted with grave concern the continuing existence in several States of major structural deficiencies which cause large numbers of repetitive findings of violations of the Convention and represent a serious danger to the rule of law in the States concerned. The Assembly listed among those deficiencies some major shortcomings in the judicial organisation and procedures in the Russian Federation, including chronic non-enforcement of domestic judicial decisions delivered against the State (see paragraph 10.2 of the Resolution). The Assembly urged the authorities of the States concerned, including the Russian Federation, to resolve the issues of particular importance mentioned in the Resolution and to give this action top political priority. 44. In the report of the Committee on Legal Affairs and Human Rights, the rapporteur, Mr Erik Jurgens, called for an urgent solution to the above-mentioned problems as they affect a very large number of people in Russia. He also warned that the influx of numerous clone cases in the Court was likely to undermine the effectiveness of the Convention mechanism (Doc. 11020). He further stated: “ 58. The rapporteur welcomes the frank and open position of most of the Russian officials and institutions he met in Moscow as well as their clear understanding that the above problems put at stake the effectiveness of the Russian judicial system, and indeed, of the State as a whole. It is perhaps indicative that especially the presidents of the Constitutional Court and of the Supreme Court showed a very constructive attitude, as both of them recognised the problems and encouraged the rapporteur in his endeavours to help find a solution for them. 59. The authorities provided assurances that the most important problems would be addressed as a matter of priority and that appropriate steps would be taken to ensure rapid adoption of reforms required by the European Court’s judgments. 60. The Russian officials’ clear willingness to come to grips with the above-mentioned important problems is most welcome. The rapporteur stresses that the complexity of these issues is such as to require enhanced and concerted efforts of all actors within the Russian legal system. 61. Thorough reform strategies in this respect, however, still remain to be established. In view of the present problems raised in the judgments and others still to come, the rapporteur has strongly recommended to the authorities to set up a special mechanism of interagency cooperation in the implementation of Strasbourg Court judgments. Constant involvement of Parliament and the Russian delegation to the Assembly in the implementation process is also necessary. The rapporteur is convinced that his Russian parliamentary colleagues will seriously consider his recommendation to set up a specific mechanism and procedure for parliamentary oversight to implement Strasbourg Court judgments, as well as other relevant proposals made in the draft resolution. The rapporteur also trusts that the members of the Russian delegation to the Assembly will promote and follow up the adoption of the specific measures required by certain judgments (for details, see Appendix III, Part III).” B. United Nations 45. In the preliminary observations following a visit to Russia from 19 to 29 May 2008, the United Nations special rapporteur on the independence of judges and lawyers, Mr Leandro Despouy, voiced “important concerns at the fact that an important percentage of judicial decisions, including those against State officials, were not implemented”. He added that “problems with the implementation of judicial decisions in Russia had contributed to the poor image of the judiciary in the eyes of the population”. THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION AND OF ARTICLE 1 OF PROTOCOL No. 1 46. The applicant complained that the authorities’ prolonged failure to comply with the binding and enforceable judgments in his favour violated his right to a court under Article 6 of the Convention and his right to the peaceful enjoyment of his possessions under Article 1 of Protocol No. 1, which, in so far as relevant, read as follows: Article 6 § 1 “In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing within a reasonable time by [a] ... tribunal ...” Article 1 of Protocol No. 1 “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. ...” A. The parties’ submissions 1. The Government 47. The Government initially argued in their observations that the applicant had not exhausted domestic remedies. However, in their further observations in response to those of the applicant, the Government did not maintain their objection as to non-exhaustion of domestic remedies. 48. The Government also submitted that the applicant could no longer claim to be a victim of the alleged violations: the damage caused by enforcement delays had been compensated by additional indexation awards granted by courts under Article 208 of the Code of Civil Procedure. The Government supported their submission by reference to certain decisions of the Court (notably Nemakina v. Russia (dec.), no. 14217/04, 10 July 2007, and Derkach v. Russia (dec.), no. 3352/05, 3 May 2007). 49. The Government further argued that the complaints were manifestly ill-founded: in their view, the periods of time from receipt of the necessary documents by the competent authorities to the effective payment of judicial awards had ranged between thirteen days and nine months and were thus reasonable in the light of the Court’s case-law. The Government blamed the applicant for having repeatedly withdrawn the writ of execution concerning the judgment of 17 April 2003 and consecutively sent it to different authorities. The judgment of 4 December 2003 was enforced only six months after its rectification on 9 March 2006. Finally, the judgment of 24 March 2006 was enforced in two steps: on 2 November 2006 in its major part and on 17 August 2007 for the remainder, namely only nine months after the partial execution. 50. The Government lastly referred to the complexity of the enforcement proceedings in this case given that several judgments were involved. They also emphasised objective circumstances, such as the complexity of the federal multilevel budgetary system and legislative changes, which had led to delays in enforcement for which the Government were not responsible. 2. The applicant 51. The applicant submitted that he had complained before different State authorities including the Ministry of Finance, the Federal Treasury, the prosecutor’s office and bailiffs about insufficient regular payments and/or delays in enforcement of judgments in his favour. In his view, the State authorities should also have displayed diligence in this respect, but had failed to take the necessary action. He considered that the surprisingly short delays in the execution of the judgments of 22 May 2007 and 21 August 2007 were presumably a result of the Court’s decision to communicate his application to the Government. 52. As regards the other three judgments, the applicant disagreed with the Government’s calculation of the delays. He argued that an overall thirty-one month delay in the execution of the judgment of 17 April 2003 was imputable to various authorities; the writ of execution concerning the judgment of 4 December 2003 had remained for twenty-one months with the Shakhty Directorate of Labour and Social Development without any action being taken, before it applied to the court for correction of an arithmetic error; the judgment of 24 March 2006 remained unenforced, albeit in part, until August 2007. The applicant concluded that he was still a victim of violations of Article 6 of the Convention and of Article 1 of Protocol No. 1. B. The Court’s assessment 1. Admissibility 53. The Court notes that the Government have explicitly dropped their objection as to non-exhaustion of domestic remedies by the applicant and will not examine this question. 54. As regards the applicant’s victim status, the Court notes that under Article 34 of the Convention, “[t]he Court may receive applications from any person ... claiming to be the victim of a violation by one of the High Contracting Parties of the rights set forth in the Convention or the Protocols thereto ...”. 55. It falls first to the national authorities to redress any alleged violation of the Convention. In this regard, the question whether or not the applicant can claim to be a victim of the violation alleged is relevant at all stages of the proceedings under the Convention (see Burdov v. Russia, no. 59498/00, § 30, ECHR 2002-II). 56. The Court reiterates that a decision or measure favourable to the applicant, such as the enforcement of a judgment after substantial delay, is not in principle sufficient to deprive him of his status as a “victim”, unless the national authorities have acknowledged, either expressly or in substance, and then afforded redress for, the breach of the Convention (see Petrushko v. Russia, no. 36494/02, §§ 14-16, 24 February 2005, with further references). Redress so afforded must be appropriate and sufficient, failing which a party can continue to claim to be a victim of the violation (see Scordino v. Italy (no. 1) [GC], no. 36813/97, § 181, ECHR 2006‑V, and Cocchiarella v. Italy [GC], no. 64886/01, § 72, ECHR 2006‑V). 57. The Government argued that domestic courts granted the applicant compensation for delays in enforcement of the judgments in his favour by way of indexation of the initial awards under Article 208 of the Code of Civil Procedure. The applicant did not contest this fact, but argued that he retained the status of a victim. The Court has thus to consider whether the indexation awards amount to an acknowledgement of the violations of the Convention and constitute appropriate and sufficient redress in this respect. 58. The Court notes on the first point that the decisions referred to by the Government did not explicitly acknowledge violations of the Convention. They awarded compensation on the basis of an objective fact that a certain time had elapsed between the moment when the sums were due and the moment when they were paid. The question would thus arise of whether these decisions acknowledged the alleged violations in substance. However, the Court does not consider it necessary to rule on this issue, given its conclusion below as to whether the redress granted was adequate and sufficient. 59. On the latter point, the Court observes that Article 208 of the Code of Civil Procedure only allows the courts to upgrade the amounts awarded in line with an official price index, thus compensating for depreciation of the national currency. The compensation so awarded thus covered only inflation-related losses but not any further damage sustained by the applicant, either pecuniary or non-pecuniary. The Government did not provide any argument to the contrary. The Court has already considered the issue in other cases concerning Russia and concluded that compensation for inflation losses alone, however accessible and effective in law and practice, does not constitute the adequate and sufficient redress required by the Convention (see Moroko v. Russia, no. 20937/07, § 27, 12 June 2008). As to the earlier decisions quoted by the Government (see paragraph 48 above), the Court reaffirms that they were taken in the specific circumstances of these individual cases (ibid., § 26) and must not be interpreted as establishing any general principle that would contradict the Court’s present conclusion. 60. The Court accordingly concludes that the applicant was not granted adequate and sufficient redress in respect of the alleged violations and can thus still claim to be a victim under Article 34 of the Convention. The Government’s objection must therefore be dismissed. 61. As regards other arguments submitted by the parties, the Court notes that they raise serious questions that require consideration on the merits. The Court accordingly considers that the complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and is not inadmissible on any other grounds. It must therefore be declared admissible. 2. Merits 62. It is not disputed by the parties that the five judgments concerned by the present case were fully enforced but with certain delays. The only issue to be decided by the Court is whether these delays violated the Convention. 63. The parties disagreed on this point, at least with regard to three of the five judgments: the Government considered that the delays were up to ten months and were in conformity with the Convention; the applicant considered the delays to be much longer and, therefore, in breach of the Convention. 64. Given these diverging positions, the Court considers it appropriate to reiterate and clarify the main principles established by its case-law that must guide the determination of the relevant issues under the Convention. (a) General principles 65. The right to a court protected by Article 6 would be illusory if a Contracting State’s domestic legal system allowed a final, binding judicial decision to remain inoperative to the detriment of one party. Execution of a judgment given by any court must therefore be regarded as an integral part of the “trial” for the purposes of Article 6 (see Hornsby v. Greece, 19 March 1997, § 40, Reports of Judgments and Decisions 1997‑II). 66. An unreasonably long delay in enforcement of a binding judgment may therefore breach the Convention (see Burdov, cited above). The reasonableness of such delay is to be determined having regard in particular to the complexity of the enforcement proceedings, the applicant’s own behaviour and that of the competent authorities, and the amount and nature of the court award (see Raylyan v. Russia, no. 22000/03, § 31, 15 February 2007). 67. While the Court has due regard to the domestic statutory time-limits set for enforcement proceedings, their non-respect does not automatically amount to a breach of the Convention. Some delay may be justified in particular circumstances but it may not, in any event, be such as to impair the essence of the right protected under Article 6 § 1 (see Burdov, cited above, § 35). Thus, the Court considered, for example, in a recent case concerning Russia, that an overall delay of nine months taken by the authorities to enforce a judgment was not prima facie unreasonable under the Convention (see Moroko, cited above, § 43). Such an assumption does not, however, obviate the need for an assessment in the light of the above-mentioned criteria (see paragraph 66 above) and having regard to other relevant circumstances (ibid., §§ 44-45). 68. A person who has obtained a judgment against the State may not be expected to bring separate enforcement proceedings (see Metaxas v. Greece, no. 8415/02, § 19, 27 May 2004). In such cases, the defendant State authority must be duly notified of the judgment and is thus well placed to take all necessary initiatives to comply with it or to transmit it to another competent State authority responsible for execution. This is particularly relevant in a situation where, in view of the complexities and possible overlapping of the execution and enforcement procedures, an applicant may have reasonable doubts about which authority is responsible for the execution or enforcement of the judgment (see Akashev v. Russia, no. 30616/05, § 21, 12 June 2008). 69. A successful litigant may be required to undertake certain procedural steps in order to recover the judgment debt, be it during a voluntary execution of a judgment by the State or during its enforcement by compulsory means (see Shvedov v. Russia, no. 69306/01, §§ 29-37, 20 October 2005). Accordingly, it is not unreasonable that the authorities request the applicant to produce additional documents, such as bank details, to allow or speed up the execution of a judgment (see, mutatis mutandis, Kosmidis and Kosmidou v. Greece, no. 32141/04, § 24, 8 November 2007). The requirement of the creditor’s cooperation must not, however, go beyond what is strictly necessary and, in any event, does not relieve the authorities of their obligation under the Convention to take timely action of their own motion, on the basis of the information available to them, with a view to honouring the judgment against the State (see Akashev, cited above, § 22). The Court thus considers that the burden to ensure compliance with a judgment against the State lies primarily with the State authorities starting from the date on which the judgment becomes binding and enforceable. 70. The complexity of the domestic enforcement procedure or of the State budgetary system cannot relieve the State of its obligation under the Convention to guarantee to everyone the right to have a binding and enforceable judicial decision enforced within a reasonable time. Nor is it open to a State authority to cite the lack of funds or other resources (such as housing) as an excuse for not honouring a judgment debt (see Burdov, cited above, § 35, and Kukalo v. Russia, no. 63995/00, § 49, 3 November 2005). It is for the Contracting States to organise their legal systems in such a way that the competent authorities can meet their obligation in this regard (see, mutatis mutandis, Comingersoll S.A. v. Portugal [GC], no. 35382/97, § 24, ECHR 2000‑IV, and Frydlender v. France [GC], no. 30979/96, § 45, ECHR 2000‑VII). (b) Application of these principles to the present case 71. The Court will consider the delays in the execution of the five judgments concerned in this case on the basis of the above principles. (i) Shakhty City Court’s judgment of 17 April 2003 72. The Shakhty City Court’s judgment of 17 April 2003 became binding and enforceable on 9 July 2003 and the defendant authority was or should have been aware of its obligation to pay the applicant the sum awarded as of that date. That the applicant submitted a writ of execution only a month later does not affect the starting point of the authority’s obligation to comply with the judgment. Indeed, he could not be expected to bring any enforcement or other similar proceedings (see paragraph 68 above). Starting from that date, the defendant authority had thus an obligation to take all necessary measures, either on its own or in cooperation with other responsible federal and/or local authorities, to ensure that the necessary funds were made available so as to honour the State’s debt. It appears indeed that the defendant authority had at its disposal all the necessary elements, such as the applicant’s address and bank details, to proceed with the payment at any moment. 73. The time taken by the authorities to comply with a judgment should accordingly be calculated from the moment on which it became final and enforceable, that is, on 9 July 2003, until the moment when the judicial award was paid to the applicant, that is, on 19 August 2005. The time taken to comply with the judgment of 17 April 2003 was thus two years and one month. 74. Such a long delay in payment of a judicial award is on its face incompatible with the Convention requirements stated above and the Court finds no circumstance to justify it. 75. It is noted, in particular, that the enforcement was not of any complexity: the judgment required payment of a sum of money. The applicant made no obstacle to the enforcement. Nor can he be blamed for his attempt to seek relief with the bailiffs and the Federal Treasury after having waited in vain for more than nine months for the defendant’s voluntary compliance with the judgment. On the other hand, the Court notes that the writ of execution fruitlessly stayed with various authorities for lengthy periods, notably nine months with the defendant Department, four months with the bailiffs and eleven months with the Federal Treasury. The Court finds no justification for this inaction. The complexity of the multilevel budgetary system referred to by the Government cannot justify the lack of appropriate coordination between the authorities and their inaction during the above periods. 76. The above elements are sufficient for the Court to conclude that the State failed to enforce the judgment of 17 April 2003 within a reasonable time. (ii) Shakhty City Court’s judgment of 4 December 2003 77. The judgment of 4 December 2003 became final on 15 December 2003 and was enforced on 18 October 2006. The time taken by the authorities to comply with the judgment was two years and ten months. It is true, as pointed out by the Government, that the court modified this judgment twice. The first rectification was made on 14 November 2005 upon the defendant authority’s request to reduce the initial award by RUB 155 (EUR 4). However, the need for such a rectification may explain only a tiny fraction of the overall delay, if any. Yet the Government offered no explanation for the almost two years which elapsed between 15 December 2003 and 14 November 2005. Nor did it inform the Court of any measure taken by the defendant authority to enforce the judgment during that period. Even assuming that the authority acted with more diligence at a later stage, such a long delay suffices for the Court to find a violation of the right to have this judgment enforced within a reasonable time. (iii) Shakhty City Court’s judgment of 24 March 2006 78. The Court finds it beyond any dispute that the judgment of 24 March 2006, which became binding on 22 May 2006, was executed on 2 November 2006, but only in part. The parties also agreed that the full execution of the judgment had only been effected on 17 August 2007. 79. While noting that the authorities acted with relative diligence by paying the awards in their major part within six months, the Court considers that Article 6 imposes an obligation to comply with a binding and enforceable judgment in full. The Court will thus assess the reasonableness of the whole period until full compliance. The time taken by the authorities to comply with the judgment in its entirety was thus one year and almost three months. 80. As it transpires notably from the Government’s submissions and the Shakhty Deputy Prosecutor’s letter of 29 April 2007 submitted by the applicant, the full enforcement of the judgment had not been possible given the absence of appropriate regulations or procedures at the federal level. Indeed, the upgrades decided by the Shakhty City Court had not been paid to the applicant until the adoption of a specific procedure in that connection by the Ministry of Finance (see paragraph 19 above). 81. However, the Court has not found in the Government’s submissions any reason justifying more than one year’s delay in the adoption by the Ministry of Finance of the new procedure. Nor can the Court attribute the delay to objective difficulties referred to by the Government: the matter appeared to be under the sole control of the Government. In any event, the lack of general regulations or procedures at a federal level cannot per se justify such a long delay in compliance with a binding and enforceable judgment. In the Court’s view, the right to a court would not be effective if the execution of a binding and enforceable judgment in a particular case were made conditional on the adoption by the administration of general procedures or regulations in the area concerned. 82. Finally, as regards the nature of the award, the Government argued that the benefits in question were not the applicant’s only income and were thus of less importance. The Court cannot agree with this argument given that at least some of these awards concerned substantial amounts of compensation for health damage sustained by the applicant at the site of the Chernobyl nuclear disaster and leading to his lifelong disability. In the Court’s view, such awards can by no means be qualified as being marginal or insignificant in nature. 83. In view of these circumstances, the Court concludes that the authorities’ failure for one year and almost three months to fully comply with the judgment of 24 March 2006 also violated the applicant’s right to a court. (iv) Shakhty City Court’s judgments of 22 May 2007 and 21 August 2007 84. The Court notes that the Shakhty City Court’s judgments of 22 May 2007 and 21 August 2007 became final on 4 June 2007 and 3 September 2007 respectively; they were enforced on 5 December 2007 and 3 December 2007 respectively. The time taken by the authorities to enforce the judgments was six months and three months respectively. 85. The applicant referred to certain initial difficulties in obtaining enforcement of the former judgment which were swiftly resolved following the communication of his application by the Court to the Government. Be that as it may, the Court is satisfied that the periods of six and three months respectively taken by the authorities to enforce these judgments do not in themselves appear unreasonable; furthermore, the Court finds no particular circumstance showing that these delays impaired the essence of the applicant’s right to a court. (v) Conclusions 86. In view of the foregoing, the Court concludes that by delaying the execution of the Shakhty City Court’s judgments of 17 April 2003, 4 December 2003 and 24 March 2006 the authorities failed to respect the applicant’s right to a court. There is accordingly a violation of Article 6 of the Convention. 87. Given that the binding and enforceable judgments created an established right to payment in the applicant’s favour, which should be considered as a “possession” within the meaning of Article 1 of Protocol No. 1 (see Vasilopoulou v. Greece, no. 47541/99, § 22, 21 March 2002), the authorities’ prolonged failure to comply with these judgments also violated the applicant’s right to peaceful enjoyment of his possessions (see Burdov, cited above, § 41). There is accordingly also a violation of Article 1 of Protocol No. 1. 88. In view of its findings in paragraphs 84-85 above, the Court concludes that there is no violation of Article 6 and of Article 1 of Protocol No. 1 in respect of the enforcement of the judgments of 22 May 2007 and 21 August 2007. II. EXISTENCE OF EFFECTIVE DOMESTIC REMEDIES AS REQUIRED BY ARTICLE 13 OF THE CONVENTION 89. The applicant did not allege the lack of effective domestic remedies in respect of his complaint about prolonged non-enforcement by the authorities of domestic judgments in his favour. The Court observed nonetheless that alleged ineffectiveness of domestic remedies was being increasingly complained of before the Court in cases concerning non-enforcement or delayed enforcement of domestic judgments. It therefore decided of its own motion to examine this question under Article 13 in the present case and requested the parties to submit observations. Article 13 provides as follows: “Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.” A. The parties’ submissions 90. The applicant did not submit any specific argument on the existence of domestic remedies and their effectiveness. In his earlier observations, he mentioned that he had unsuccessfully submitted his grievances to various authorities, including the Ministry of Finance, the Federal Treasury, the prosecutor’s office and bailiffs. 91. The Government argued that there were several effective domestic remedies against non-enforcement that had not been tested by the applicant in the present case. Firstly, the Constitution guarantees to everyone judicial protection and the right to challenge State authorities’ acts or inaction in courts. Law no. 4866-1 of 27 April 1993 and Chapter 25 of the Code of Civil Procedure allow such actions or inaction to be condemned by courts, thus opening a way for claiming damages and bringing criminal proceedings under Article 315 of the Criminal Code against those responsible for enforcement delays. An example of case-law was provided: by a decision of 13 July 2007 the Leninskiy District Court of Cheboksary, Republic of Chuvashiya, found inaction by the regional treasury department to be unlawful and ordered payment of the judicial award within one working day. 92. Secondly, the Government submitted that Chapter 59 of the Civil Code provided grounds for claiming both pecuniary and non-pecuniary damage for enforcement delays and that this remedy had proven its effectiveness in practice. Four examples of case-law awarding compensation for non-pecuniary damage were provided or quoted (decision of 23 October 2006 in the case of Khakimovy by the Novo-Savinovskiy District Court of Kazan, Republic of Tatarstan; decisions delivered on unspecified dates in the case of Akuginova and others by the Elista City Court, Republic of Kalmykiya; decision of 3 August 2004 in the case of Butko by the Kirovskiy District Court of Astrakhan; and decision of 28 March 2008 in the case of Shubin by the Beloretsk City Court, Republic of Bashkortostan). 93. Thirdly, the Government referred to Article 208 of the Code of Civil Procedure and Article 395 of the Civil Code as providing grounds for compensation of pecuniary damage. The former allows index-linking of judicial awards and its application is not conditional on the establishment of fault for delays; several examples of its successful application were provided. The latter allows the claiming of default interest and further compensation for additional pecuniary damage arising from delayed enforcement; two Supreme Court decisions applying this provision in non-enforcement cases in 2002 and 2006 were provided. 94. Lastly, the Government submitted that the Supreme Court had prepared a draft constitutional law introducing a domestic remedy against excessive length of judicial proceedings and delayed enforcement of judgments and that it would shortly be considered by the Government. 95. The Government concluded that Russian law provided for an aggregate of various remedies which should be considered as a whole; they were formulated with clarity and applied in practice as required by Article 13 of the Convention. B. The Court’s assessment 1. General principles 96. The Court notes that Article 13 gives direct expression to the States’ obligation, enshrined in Article 1 of the Convention, to protect human rights first and foremost within their own legal system. It therefore requires that the States provide a domestic remedy to deal with the substance of an “arguable complaint” under the Convention and to grant appropriate relief (see Kudła v. Poland [GC], no. 30210/96, § 152, ECHR 2000‑XI). 97. The scope of the Contracting States’ obligations under Article 13 varies depending on the nature of the applicant’s complaint; the “effectiveness” of a “remedy” within the meaning of Article 13 does not depend on the certainty of a favourable outcome for the applicant. At the same time, the remedy required by Article 13 must be “effective” in practice as well as in law in the sense either of preventing the alleged violation or its continuation, or of providing adequate redress for any violation that has already occurred. Even if a single remedy does not by itself entirely satisfy the requirements of Article 13, the aggregate of remedies provided for under domestic law may do so (ibid., §§ 157-58, and Wasserman v. Russia (no. 2), no. 21071/05, § 45, 10 April 2008). 98. As regards more particularly length-of-proceedings cases, a remedy designed to expedite the proceedings in order to prevent them from becoming excessively lengthy is the most effective solution (see Scordino, cited above, § 183). Likewise, in cases concerning non-enforcement of judicial decisions, any domestic means to prevent a violation by ensuring timely enforcement is, in principle, of greatest value. However, where a judgment is delivered in favour of an individual against the State, the former should not, in principle, be compelled to use such means (see, mutatis mutandis, Metaxas, cited above, § 19): the burden to comply with such a judgment lies primarily with the State authorities, which should use all means available in the domestic legal system in order to speed up the enforcement, thus preventing violations of the Convention (see, mutatis mutandis, Akashev, cited above, §§ 21-22). 99. States can also choose to introduce only a compensatory remedy, without that remedy being regarded as ineffective. Where such a compensatory remedy is available in the domestic legal system, the Court must leave a wider margin of appreciation to the State to allow it to organise the remedy in a manner consistent with its own legal system and traditions and consonant with the standard of living in the country concerned. The Court is nonetheless required to verify whether the way in which the domestic law is interpreted and applied produces consequences that are consistent with the Convention principles, as interpreted in the light of the Court’s case-law (see Scordino, cited above, §§ 187-91). The Court has set key criteria for verification of the effectiveness of a compensatory remedy in respect of the excessive length of judicial proceedings. These criteria, which also apply to non-enforcement cases (see Wasserman, cited above, §§ 49 and 51), are as follows: – an action for compensation must be heard within a reasonable time (see Scordino, cited above, § 195 in fine); – the compensation must be paid promptly and generally no later than six months from the date on which the decision awarding compensation becomes enforceable (ibid., § 198); – the procedural rules governing an action for compensation must conform to the principle of fairness guaranteed by Article 6 of the Convention (ibid., § 200); – the rules regarding legal costs must not place an excessive burden on litigants where their action is justified (ibid., § 201); – the level of compensation must not be unreasonable in comparison with the awards made by the Court in similar cases (ibid., §§ 202-06 and 213). 100. On this last criterion, the Court indicated that, with regard to pecuniary damage, the domestic courts are clearly in a better position to determine the existence and quantum. The situation is, however, different with regard to non-pecuniary damage. There exists a strong but rebuttable presumption that excessively long proceedings will occasion non-pecuniary damage (see Scordino, cited above, §§ 203-04, and Wasserman, cited above, § 50). The Court considers this presumption to be particularly strong in the event of excessive delay in enforcement by the State of a judgment delivered against it, given the inevitable frustration arising from the State’s disregard for its obligation to honour its debt and the fact that the applicant has already gone through judicial proceedings and obtained success. 2. Application of the principles to the present case (a) Preventive remedies 101. The Court notes that it has already found in several cases that there was no preventive remedy in the Russian legal system which could have expedited the enforcement of a judgment against a State authority (see Lositskiy v. Russia, no. 24395/02, §§ 29-31, 14 December 2006, and Isakov v. Russia, no. 20745/04, §§ 21-22, 19 June 2008). It found in particular that the bailiffs did not have power to compel the State to pay the judgment debt. 102. The bailiffs’ incapacity to influence in any way the enforcement of the judgments in the applicant’s favour, let alone to bring him relief, was also demonstrated in the present case. In April and June 2004 enforcement proceedings were instituted by bailiffs in respect of the judgments of 14 April and 4 December 2003. In July 2004 they were discontinued without bringing any result. The Rostov Regional Directorate of the Ministry of Justice informed the applicant by a letter of 12 July 2004 that the bailiffs did not have power to seize funds from the debtor authority’s main bank account (лицевой счет), while its settlements account (расчетный счет), on which bailiffs could seize funds, contained none. 103. The Government further considered that another remedy provided for by Chapter 25 of the Code of Civil Procedure was capable of producing a preventive effect. Yet the Court has already assessed its effectiveness and concluded that a judicial appeal against the debtor authority’s inaction would yield a declaratory judgment reiterating what was in any event evident from the original judgment, namely that the State was to honour its debt (see Moroko, cited above, § 25). As to courts’ capacity to order remedial action under Article 258 of the Code of Civil Procedure, this new judgment would not bring the applicant closer to his desired goal, that is the actual payment of the judicial award (see Jasiūnienė v. Lithuania (dec.), no. 41510/98, 24 October 2000, and Plotnikovy v. Russia, no. 43883/02, § 16, 24 February 2005). It is indicative that, in the only example of application of this provision submitted to the Court (see paragraph 91 above), the Government did not specify if the defendant authority had effectively complied with the domestic court’s order to pay the judicial award within one working day. The Court therefore considers that this remedy does not allow effective prevention of a violation on account of non-enforcement of a judgment against the State. 104. As to Article 315 of the Criminal Code mentioned by the Government and the wide array of sanctions it provides for, the Court does not exclude that such coercive action may contribute to change the attitude of those who unacceptably delay the execution of judgments. The Court has, however, seen no evidence of its effectiveness in practice. On the contrary, no use of this provision was made despite the applicant’s repeated complaints to the competent authorities, including prosecutors (see paragraph 80 above). In these circumstances, the Court cannot consider this provision to be effective both in theory and in practice as required by Article 13 of the Convention. (b) Compensatory remedies (i) Pecuniary damage 105. The Court has also considered on several occasions the question of the effectiveness of certain compensatory remedies relied on by the Government. 106. As regards the compensation of pecuniary damage for delays in enforcement, the Government referred to the possibilities offered by Article 395 of the Civil Code and by Article 208 of the Code of Civil Procedure. As regards the former, the Court has been provided with little evidence demonstrating the effectiveness of this remedy. The two judgments quoted by the Government are far from showing the existence of a widespread and consistent case-law in this regard. On the contrary, in one of the two cases mentioned, lower courts thrice rejected the claim for compensation lodged under Article 395 on the ground that the creditor had not proved that the debtor institution had used the unpaid sum for itself and was thus responsible under that provision. In this connection, the Court refers to its finding that a remedy the use of which is conditional on the debtor’s fault is impracticable in cases of non-enforcement of judgments by the State (see Moroko, cited above, § 29, and paragraphs 111-13 below). 107. The situation is different as regards the remedy provided for by Article 208 of the Code of Civil Procedure allowing index-linking of monetary awards. The Court notes that individuals, like the applicant, were frequently awarded compensation for inflation losses on the basis of Article 208 of the Code of Civil Procedure. Of particular importance is the fact emphasised by the Government and illustrated by specific examples that this compensation was calculated and awarded in a straightforward procedure without requiring the authorities’ fault or unlawful action to be evidenced by the plaintiff. The Court further notes that this compensation is calculated on the basis of an objective official index of retail prices, which actually reflects the depreciation of the national currency (compare Akkuş v. Turkey, 9 July 1997, §§ 30-31, Reports 1997‑IV, and Aka v. Turkey, 23 September 1998, §§ 48-51, Reports 1998‑VI). This remedy is thus capable of adequately compensating inflation losses. That the applicant was awarded such compensation on numerous occasions also tends to confirm that the provision is applicable by courts in non-enforcement cases. 108. On the other hand, the payment of such compensation awards was delayed in the present case, thus severely undermining the effectiveness of this remedy in practice. The Court accepts that the authorities need time in which to make payment. It notes, however, that the period should not generally exceed six months from the date on which the decision awarding compensation becomes enforceable (see Scordino, cited above, § 198). Having regard to all the material at its disposal, the Court is not convinced that this requirement is systematically satisfied in respect of payment of compensation awarded by domestic courts under Article 208 of the Code of Civil Procedure. However, even assuming that the requirement of speedy payment of such compensation is met, this remedy alone would not provide sufficient redress as it can only compensate damage resulting from monetary depreciation (see paragraph 59 above). (ii) Non-pecuniary damage 109. The Court has next to consider whether Chapter 59 of the Civil Code referred to by the Government constitutes an effective remedy for compensation of non-pecuniary damage in the event of non-enforcement of a judicial decision. The Court notes that it has already assessed the effectiveness of this remedy in several recent cases in the context of both Article 35 § 1 and Article 13 of the Convention. 110. The Court found that, while the possibility of such compensation was not totally excluded, this remedy did not offer reasonable prospects of success, being notably conditional on the establishment of the authorities’ fault (see Moroko, cited above, §§ 28-29). The Government did not contest in the present case that compensation under Chapter 59 was subject to this condition, unlike the indexation under Article 208 of the Code of Civil Procedure (see paragraph 107 above). 111. The Court refers in this respect to a very strong, albeit rebuttable, presumption that an excessive delay in execution of a binding and enforceable judgment will occasion non-pecuniary damage (see paragraph 100 above). That compensation of non-pecuniary damage in non-enforcement cases is conditional on the respondent authority’s fault is difficult to reconcile with this presumption. Indeed, enforcement delays found by the Court are not necessarily due to failings of the respondent authority in a given case but may be attributable to deficient mechanisms at the federal and/or local level, not least to excessive complexities and formalism of the budgetary and financial procedures which considerably delay transfers of funds between responsible authorities and their subsequent payment to final beneficiaries. 112. The Court notes that the Civil Code lists a very limited number of situations in which compensation for non-pecuniary damage is recoverable irrespective of the respondent’s fault (notably Articles 1070 § 1 and 1100). Neither excessively lengthy proceedings nor delays in enforcement of judicial decisions appear in this list. The Code provides, in addition, for damage caused by the administration of justice to be compensated if the fault of the judge is established by a final judicial conviction (Article 1070 § 2). 113. Against this background, the Constitutional Court held in 2001 that the constitutional right to compensation by the State for the damage caused by procedural acts, including excessively lengthy proceedings, should not be tied in with the individual fault of a judge. Referring, inter alia, to Article 6 of the Convention, the Constitutional Court held that Parliament should legislate on the grounds and procedure for such compensation. The Court notes, however, that no legislation has yet been enacted to that effect. 114. The Government argued nonetheless that Chapter 59 of the Civil Code had been successfully applied in practice, quoting four specific examples of domestic case-law. The Court notes that the same examples have been quoted by the Government in other similar cases and confirms its view that they appear as exceptional and isolated instances rather than evidence of established and consistent case-law. They cannot, therefore, alter the Court’s earlier conclusion that the remedy in issue is not effective in both theory and practice. 115. Moreover, the Court notes that even in such exceptional cases of application of Chapter 59, the level of the compensation awarded for non-pecuniary damage was at times unreasonably low in comparison with the awards made by the Court in similar non-enforcement cases. For instance, in the case of Butko quoted by the Government, the plaintiff received RUB 2,000 (EUR 55) in respect of non-pecuniary damage (decision of 3 August 2004). The same amount was awarded under this head to V. Mukhlynova in the case of Akuginova and others also mentioned by the Government (decision of 22 January 2006). The Court further notes that it has already found in two other cases that the amounts awarded to the applicants in respect of non-pecuniary damage incurred through belated enforcement of judgments were manifestly unreasonable in the light of the Court’s case-law (see Wasserman, cited above, § 56, and Gayvoronskiy v. Russia, no. 13519/02, § 39, 25 March 2008). The compensation was, in addition, awarded in excessively lengthy proceedings in the former case and was itself paid with considerable delay in the latter. 116. Having regard to the above-mentioned shortcomings, the Court considers that the remedy provided for by Chapter 59 of the Civil Code cannot be considered as effective both in theory and in practice as required by Article 13 of the Convention. (c) Conclusion 117. The Court concludes that there was no effective domestic remedy, either preventive or compensatory, that allows for adequate and sufficient redress in the event of violations of the Convention on account of prolonged non-enforcement of judicial decisions delivered against the State or its entities. There is accordingly a violation of Article 13 of the Convention. III. ALLEGED VIOLATION OF ARTICLE 14 OF THE CONVENTION 118. Relying on Article 14 of the Convention, the applicant complained of discrimination on account on the authorities’ alleged failure to apply the Compulsory Social Insurance Act 1998 (No.125-ФЗ) to the liquidators of the Chernobyl disaster on the same terms as to other professional groups. He submitted, in particular, that he had not received default interest as provided for by this Act. The Government argued that this question concerned the application of domestic law and was solely within the competence of the domestic courts. 119. The Court notes that the Shakhty City Court’s judgment of 4 December 2003 granted the applicant’s claim under the above-mentioned Act (see paragraph 14 above). In any event, the applicant’s complaint about alleged discrimination should first have been submitted to the domestic courts under Article 35 § 1 of the Convention. The applicant failed to demonstrate that he had exhausted domestic remedies in this regard. Nor did he substantiate his allegation before the Court. The Court therefore finds no appearance of a violation of Article 14 of the Convention and rejects this complaint. IV. ALLEGED SHORTFALL IN PAYMENT OF JUST SATISFATION DUE UNDER THE COURT’S JUDGMENT OF 7 MAY 2002 120. The applicant also complained of the authorities’ failure to pay him the full amount of just satisfaction awarded by the Court’s judgment of 7 May 2002. According to his calculation, the sum of EUR 3,000 awarded was equivalent at the date of payment to RUB 94,981.50, while he only received RUB 92,724.60. He accordingly claimed a shortfall of RUB 2,256.90. 121. The Court reiterates that under Article 46 § 2 of the Convention, the supervision of the execution of its judgments is entrusted to the Committee of Ministers (see paragraphs 10-11 above). The Court has no competence to examine this complaint, which should have been submitted to the Committee of Ministers (see Haase and Others v. Germany (dec.), no. 34499/04, 12 February 2008). V. APPLICATION OF ARTICLE 46 OF THE CONVENTION 122. The Court notes at the outset that non-enforcement or delayed enforcement of domestic judgments constitutes a recurrent problem in Russia that has led to numerous violations of the Convention. The Court has already found such violations in more than two hundred judgments since the first such finding in the Burdov case in 2002. The Court therefore finds it timely and appropriate to consider this second case brought by the same applicant under Article 46 of the Convention, the relevant parts of which read as follows: Article 46 Binding force and execution of judgments “1. The High Contracting Parties undertake to abide by the final judgment of the Court in any case to which they are parties. 2. The final judgment of the Court shall be transmitted to the Committee of Ministers, which shall supervise its execution.” A. The parties’ submissions 123. The applicant submitted that the Russian authorities’ recurrent failure to enforce domestic judicial decisions delivered against them constituted a systemic problem as demonstrated by repeated non-enforcement of such decisions in his case. 124. The Government argued that no such problem existed in respect of either enforcement of judgments or domestic remedies. They argued that the Constitutional Court had not contested the existence of a special procedure for the execution of judicial decisions against the State (judgment of 14 July 2005). There were further specific regulations governing payment of benefits to Chernobyl victims. In 2007 considerable budgetary allocations were additionally made to pay outstanding debts under domestic judgments and the actual needs in such funds were reflected in the 2007 budget. The Government concluded that there were clear mechanisms for enforcement of such decisions, notably in respect of Chernobyl victims. The complexity of these mechanisms was attributable to the multilevel structure of the budgetary system and to the need for coordination between federal and local authorities. The Government submitted, in addition, some statistical information about enforcement of judgments provided by federal ministries and bailiffs. B. The Court’s assessment 1. General principles 125. The Court notes that Article 46 of the Convention, as interpreted in the light of Article 1, imposes on the respondent State a legal obligation to implement, under the supervision of the Committee of Ministers, appropriate general and/or individual measures to secure the right of the applicant which the Court found to be violated. Such measures must also be taken in respect of other persons in the applicant’s position, notably by solving the problems that have led to the Court’s findings (see Scozzari and Giunta v. Italy [GC], nos. 39221/98 and 41963/98, § 249, ECHR 2000-VIII; Christine Goodwin v. the United Kingdom [GC], no. 28957/95, § 120, ECHR 2002-V; Lukenda v. Slovenia, no. 23032/02, § 94, ECHR 2005‑X; and S. and Marper v. the United Kingdom [GC], nos. 30562/04 and 30566/04, § 134, ECHR 2008). This obligation was consistently emphasised by the Committee of Ministers in the supervision of the execution of the Court’s judgments (see, among many authorities, Interim Resolutions ResDH(97)336 in cases concerning the length of proceedings in Italy; ResDH(99)434 in cases concerning the action of the security forces in Turkey; ResDH(2001)65 in the case of Scozzari and Giunta (cited above); and ResDH(2006)1 in the cases of Ryabykh v. Russia, no. 52854/99, ECHR 2003-IX, and Volkova v. Russia, no. 48758/99, 5 April 2005). 126. In order to facilitate effective implementation of its judgments along these lines, the Court may adopt a pilot-judgment procedure allowing it to clearly identify in a judgment the existence of structural problems underlying the violations and to indicate specific measures or actions to be taken by the respondent State to remedy them (see Broniowski v. Poland [GC], no. 31443/96, §§ 189-94 and the operative part, ECHR 2004-V, and Hutten-Czapska v. Poland [GC], no. 35014/97, §§ 231-39 and the operative part, ECHR 2006-VIII). This adjudicative approach is, however, pursued with due respect for the Convention organs’ respective functions: it falls to the Committee of Ministers to evaluate the implementation of individual and general measures under Article 46 § 2 of the Convention (see, mutatis mutandis, Broniowski v. Poland (friendly settlement) [GC], no. 31443/96, § 42, ECHR 2005‑IX, and Hutten-Czapska v. Poland (friendly settlement) [GC], no. 35014/97, § 42, 28 April 2008). 127. Another important aim of the pilot-judgment procedure is to induce the respondent State to resolve large numbers of individual cases arising from the same structural problem at the domestic level, thus implementing the principle of subsidiarity which underpins the Convention system. Indeed, the Court’s task, as defined by Article 19, that is to “ensure the observance of the engagements undertaken by the High Contracting Parties in the Convention and the Protocols thereto”, is not necessarily best achieved by repeating the same findings in large series of cases (see, mutatis mutandis, E.G. v. Poland (dec.), no. 50425/99, § 27, ECHR 2008). The object of the pilot-judgment procedure is to facilitate the speediest and most effective resolution of a dysfunction affecting the protection of the Convention rights in question in the national legal order (see Wolkenberg and Others v. Poland (dec.), no. 50003/99, § 34, 4 December 2007). While the respondent State’s action should primarily aim at the resolution of such a dysfunction and at the introduction, where appropriate, of effective domestic remedies in respect of the violations in question, it may also include ad hoc solutions such as friendly settlements with the applicants or unilateral remedial offers in line with the Convention requirements. The Court may decide to adjourn examination of all similar cases, thus giving the respondent State an opportunity to settle them in such various ways (see, mutatis mutandis, Broniowski [GC], cited above, § 198, and Xenides-Arestis v. Turkey, no. 46347/99, § 50, 22 December 2005). 128. If, however, the respondent State fails to adopt such measures following a pilot judgment and continues to violate the Convention, the Court will have no choice but to resume examination of all similar applications pending before it and to take them to judgment so as to ensure effective observance of the Convention (see, mutatis mutandis, E.G. v. Poland, cited above, § 28). 2. Application of the principles to the present case (a) Application of the pilot-judgment procedure 129. The Court notes that the present case can be distinguished in some respects from certain previous “pilot cases”, such as Broniowski and Hutten-Czapska, for example. In fact, persons in the same position as the applicant do not necessarily belong to “an identifiable class of citizens” (compare Broniowski [GC], cited above, § 189, and Hutten-Czapska [GC], cited above, § 229). Furthermore, the two above-mentioned judgments were the first to identify new structural problems at the root of numerous similar follow-up cases, while the present case comes to be considered after some two hundred judgments have amply highlighted the non-enforcement problem in Russia. 130. Notwithstanding these differences, the Court considers it appropriate to apply the pilot-judgment procedure in this case, given notably the recurrent and persistent nature of the underlying problems, a large number of people affected by them in Russia and the urgent need to grant them speedy and appropriate redress at the domestic level. (b) Existence of a practice incompatible with the Convention 131. The Court finds, at the outset, that the violations found in the present judgment were neither prompted by an isolated incident, nor attributable to a particular turn of events in this case, but were rather the consequence of regulatory shortcomings and/or administrative conduct of the authorities in the execution of binding and enforceable judgments ordering monetary payments by State authorities (compare Broniowski [GC], cited above, § 189, and Hutten-Czapska [GC], cited above, § 229). 132. Although the Government denied such a situation in their additional observations, their submissions in the present case appear to run against an almost undisputed recognition at both the domestic and the international level of the existence of structural problems in this field (see paragraphs 25 and 38-45 above). The problems appear, in addition, to have been acknowledged by the Russian competent authorities (see notably CM/Inf/DH(2006)45, cited above) and are being repeatedly emphasised by the Committee of Ministers. The Committee’s recent decisions noted, in particular, that the structural problems in question in the Russian legal system severely affected, by their nature and scale, its effectiveness and caused very numerous violations of the Convention (see paragraph 39 above). 133. The important concerns voiced and the findings made by various authorities and institutions are consonant with some two hundred judgments of the Court which highlighted the multiple aspects of the underlying structural problems, which do not affect only Chernobyl victims, as in the present case, but also other large groups of the Russian population, including in particular some vulnerable groups. The State has thus been very frequently found to considerably delay the execution of judicial decisions ordering payment of social benefits such as pensions or child allowances, of compensation for damage sustained during military service or of compensation for wrongful prosecution. The Court cannot ignore the fact that approximately seven hundred cases concerning similar facts are currently pending before it against Russia and that some of the cases, like the present one, lead the Court to find a second set of violations of the Convention in respect of the same applicants (see Wasserman, cited above, and Kukalo v. Russia (no. 2), no. 11319/04, 24 July 2008). Moreover, the victims of non-enforcement or delayed enforcement dispose of no effective remedy, either preventive or compensatory, that allows for adequate and sufficient redress at the domestic level (see paragraphs 101-17 above). 134. The Court’s findings, taken in conjunction with the other material in its possession, thus clearly indicate that such breaches reflect a persistent structural dysfunction. The Court notes with grave concern that the violations found in the present judgment occurred several years after its first judgment of 7 May 2002, notwithstanding Russia’s obligation under Article 46 to adopt, under the supervision of the Committee of Ministers, the necessary remedial and preventive measures, both at individual and general levels. The Court notes, in particular, that non-compliance with one of the judgments in the applicant’s favour lasted until August 2007, not least because of the competent authorities’ failure to adopt the necessary procedures (see paragraphs 80-81 above). 135. In view of the foregoing, the Court concludes that the present situation must be qualified as a practice incompatible with the Convention (see Bottazzi v. Italy [GC], no. 34884/97, § 22, ECHR 1999‑V). (c) General measures 136. The Court notes that the problems at the basis of the violations of Article 6 and of Article 1 of Protocol No. 1 found in this case are large-scale and complex in nature. Indeed, they do not stem from a specific legal or regulatory provision or a particular lacuna in Russian law. Accordingly, they require the implementation of comprehensive and complex measures, possibly of a legislative and administrative character, involving various authorities at both federal and local level. Subject to monitoring by the Committee of Ministers, the respondent State remains free to choose the means by which it will discharge its legal obligation under Article 46 of the Convention, provided that such means are compatible with the conclusions set out in the Court’s judgment (see Scozzari and Giunta, cited above, § 249). 137. The Court notes that the adoption of such measures has been thoroughly considered by the Committee of Ministers in cooperation with the Russian competent authorities (see decisions and documents cited in paragraphs 39-40 above). The Committee’s decisions and documents show that although the implementation of the necessary measures is far from being completed, further actions are being considered or taken in this respect (see the main avenues outlined in paragraph 40 above). The Court notes that this process raises a number of complex legal and practical issues which go, in principle, beyond the Court’s judicial function. It will thus abstain in these circumstances from indicating any specific general measure to be taken. The Committee of Ministers is better placed and equipped to monitor the necessary reforms to be adopted by Russia in this respect. The Court therefore leaves it to the Committee of Ministers to ensure that the Russian Federation, in accordance with its obligations under the Convention, adopts the necessary measures consistent with the Court’s conclusions in the present judgment. 138. The Court observes, however, that the situation is different as regards the violation of Article 13 on account of the lack of effective domestic remedies. In accordance with Article 46 of the Convention, the Court’s findings in paragraphs 101-17 above clearly require the setting up of an effective domestic remedy or a combination of remedies allowing adequate and sufficient redress to be granted to large numbers of people affected by the violations in question. It appears highly unlikely in the light of the Court’s conclusions that such an effective remedy can be set up without changing the domestic legislation on certain specific points. 139. In this respect, the Court attaches considerable importance to the findings of the Russian Constitutional Court, which has invited Parliament since January 2001 to set up a procedure for compensation of damage arising, inter alia, from excessively lengthy proceedings. Of particular importance is the finding made by reference notably to Article 6 of the Convention that such compensation should not be conditional on the establishment of fault (see paragraphs 32-33 above). The Court also welcomes the legislative initiative recently taken by the Supreme Court in this area and notes the bills tabled in Parliament on 30 September 2008 with a view to introducing remedies in respect on the violations in question (see paragraphs 34-36 above). The Court notes with interest the reference to the Convention standards as a basis for determining compensation for damage, and that the average amounts of compensation for delayed enforcement were calculated by reference to the Court’s case-law (see paragraphs 35 and 36 above). 140. It is not, however, for the Court to assess the overall adequacy of the ongoing reform, nor to specify what would be the most appropriate way to set up the necessary domestic remedies (see the Grand Chamber judgment in Hutten-Czapska, cited above, § 239). The State may either amend the existing range of legal remedies or add new remedies to secure genuinely effective redress for the violation of the Convention rights concerned (see Lukenda, cited above, § 98, and Xenides-Arestis, cited above, § 40). It is also for the State to ensure, under the supervision of the Committee of Ministers, that a new remedy or a combination of remedies respects both in theory and in practice the requirements of the Convention as set out in the present judgment (see, notably, paragraphs 96-100 above). In so doing, the authorities may also have due regard to the Committee of Ministers’ Recommendation Rec(2004)6 to member States on the improvement of domestic remedies. 141. The Court accordingly concludes that the respondent State must introduce a remedy which secures genuinely effective redress for the violations of the Convention on account of the State authorities’ prolonged failure to comply with judicial decisions delivered against the State or its entities. Such a remedy must conform to the Convention principles as laid down notably in the present judgment and be available within six months from the date on which the present judgment becomes final (compare Xenides-Arestis, cited above, § 40 and point 5 of the operative part). (d) Redress to be granted in similar cases 142. The Court notes that one of the aims of the pilot-judgment procedure is to allow the speediest possible redress to be granted at the domestic level to the large numbers of people suffering from the structural problem identified in the pilot judgment (see paragraph 127 above). It may thus be decided in the pilot judgment that the proceedings in all cases stemming from the same structural problem be adjourned pending the implementation of the relevant measures by the respondent State. The Court considers it appropriate to adopt a similar approach following the present judgment, while differentiating between the cases already pending before the Court and those that could be brought in the future. (i) Applications lodged after the delivery of the present judgment 143. The Court will adjourn the proceedings on all new applications lodged with the Court after the delivery of the present judgment, in which the applicants complain solely of non-enforcement and/or delayed enforcement of domestic judgments ordering monetary payments by State authorities. The adjournment will be effective for a period of one year after the present judgment will become final. The applicants in these cases would be informed accordingly. (ii) Applications lodged before the delivery of the present judgment 144. The Court decides, however, to follow a different course of action in respect of the applications lodged before the delivery of the judgment. In the Court’s view, it would be unfair if the applicants in such cases, who have allegedly been suffering for years of continuing violations of their right to a court and sought relief in this Court, were compelled yet again to resubmit their grievances with the domestic authorities, be it on the grounds of a new remedy or otherwise. 145. The Court therefore considers that the respondent State must grant adequate and sufficient redress, within one year from the date on which the judgment becomes final, to all victims of non-payment or unreasonably delayed payment by State authorities of a domestic judgment debt in their favour who lodged their applications with the Court before the delivery of the present judgment and whose applications were communicated to the Government under Rule 54 § 2 (b) of the Rules of the Court. It is recalled that delays in the enforcement of judgments should be calculated and assessed by reference to the Convention requirements and, notably, in accordance with the criteria as defined in the present judgment (see, in particular, paragraphs 66-67 and 73 above). In the Court’s view, such redress may be achieved through implementation proprio motu by the authorities of an effective domestic remedy in these cases or through ad hoc solutions such as friendly settlements with the applicants or unilateral remedial offers in line with the Convention requirements (see paragraph 127 above). 146. Pending the adoption of domestic remedial measures by the Russian authorities, the Court decides to adjourn adversarial proceedings in all these cases for one year from the date on which the judgment becomes final. This decision is without prejudice to the Court’s power at any moment to declare inadmissible any such case or to strike it out of its list following a friendly settlement between the parties or the resolution of the matter by other means in accordance with Articles 37 or 39 of the Convention. VI. APPLICATION OF ARTICLE 41 OF THE CONVENTION 147. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Damage 148. The applicant claimed a global sum of 40,000 euros (EUR) in respect of pecuniary and non-pecuniary damage. He referred to sufferings caused by the State’s repeated and persistent failure to comply with the domestic judgments, notwithstanding his first successful application to the Court. He supported his claim for pecuniary damage by the authorities’ alleged failure to pay him default interest under the Compulsory Social Insurance Act 1998 (see paragraph 118 above). 149. The Government submitted that the applicant had suffered no pecuniary damage and that a finding of a violation would provide adequate just satisfaction for any damage sustained. They referred to certain non-enforcement cases in which the Court had either awarded modest amounts (see Plotnikovy v. Russia, no. 43883/02, § 34, 24 February 2005) in respect of non-pecuniary damage or decided that the finding of a violation was sufficient (see Poznakhirina v. Russia, no. 25964/02, 24 February 2005; Shapovalova v. Russia, no. 2047/03, 5 October 2006; Shestopalova and Others v. Russia, no. 39866/02, 17 November 2005; and Bobrova v. Russia, no. 24654/03, 17 November 2005). 150. The Court notes that it has rejected the applicant’s complaint about non-payment of default interest under the Compulsory Social Insurance Act 1998 (see paragraph 119 above); it therefore also rejects the applicant’s claim for pecuniary damage in this regard. 151. As regards non-pecuniary damage, the Court accepts that the applicant suffered mental distress and frustration on account of the violations found. The Court furthermore considers that the question is ready for decision and may be considered in the present judgment without waiting for the adoption of general measures as decided above (see paragraph 141 above). 152. The Court cannot agree with the Government that a finding of a violation would provide adequate just satisfaction. The Court refers in this respect to a very strong presumption that the authorities’ non-compliance or delayed compliance with a binding and enforceable judgment will occasion non-pecuniary damage (see paragraphs 100 and 111 above). It transpires clearly from the great majority of its judgments that such violations of the Convention give rise, in principle, to frustration and distress that cannot be compensated by the mere finding of a violation. 153. Against this background, the cases referred to by the Government appear rather exceptional. Indeed, the Court’s position in these cases may be explained by their very specific circumstances, not least by the small size of domestic court awards (less than EUR 100 in most of the cases) and the marginal significance of the awards in relation to the applicants’ incomes (see Poznakhirina, cited above, § 35). 154. The Court notes that it determines the size of awards for non-pecuniary damage taking into account such factors as the applicant’s age, personal income, the nature of the domestic court awards, the length of the enforcement proceedings and other relevant aspects (see Plotnikovy, cited above, § 34). The applicant’s health is also taken into account, as well as the number of the judgments that failed to be properly and/or timeously enforced. All these factors may affect in various degrees the Court’s award in respect of non-pecuniary damage and even lead, exceptionally, to no award at all. At the same time, it is demonstrated rather clearly by the Court’s case-law that such awards are, in principle, directly proportionate to the period during which a binding and enforceable judgment remained unenforced. 155. Turning to the circumstances of the present case, the Court notes that by the judgment of 7 May 2002 it awarded the same applicant EUR 3,000 in respect of non-pecuniary damage sustained on account of enforcement delays ranging between almost one and three years within the Court’s jurisdiction and concerning three domestic judgments (see Burdov v. Russia, no. 59498/00, §§ 36 and 47, ECHR 2002-III). 156. In the instant case the same applicant suffered from comparable enforcement delays in respect of similar judicial awards under three other domestic judgments. Accordingly, the violations found by the Court would, in principle, call for a just satisfaction award equal or very close to the one decided by the judgment of 7 May 2002. The Court will, in addition, bear in mind that distress and frustration arising from non-enforcement of domestic judgments may be heightened by the existence of a practice incompatible with the Convention since it seriously undermines, as a matter of principle, the citizens’ confidence in the judicial system. This factor has, however, to be carefully balanced against the respondent State’s attitude and efforts to combat such a practice with a view to meeting its obligations under the Convention (see paragraph 137 above). The Court must also take account of additional special circumstances in the present case. Indeed, it must be accepted that the applicant’s distress and frustration were exacerbated by the authorities’ persistent failure to honour their debts under the domestic judgments, notwithstanding the first finding of violations by the Court in his case. As a result, the applicant had no choice but again to seek relief through time-consuming international litigation before the Court. In view of this important element, the Court considers that an increased award would be appropriate in respect of non-pecuniary damage in the present case. 157. Having regard to the foregoing and making its assessment on an equitable basis, as required by Article 41 of the Convention, the Court awards the applicant EUR 6,000 in respect of non-pecuniary damage. B. Costs and expenses 158. The applicant did not claim any compensation for costs and expenses. The Court therefore makes no award under this head. C. Default interest 159. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Declares admissible the complaint concerning the authorities’ prolonged failure to comply with binding and enforceable judgments in the applicant’s favour and the remainder of the applicant’s complaints inadmissible; 2. Holds that there has been a violation of Article 6 of the Convention and of Article 1 of Protocol No. 1 on account of the State’s prolonged failure to enforce three domestic judgments ordering monetary payments by the authorities to the applicant; 3. Holds that there has been no violation of Article 6 of the Convention and of Article 1 of Protocol No. 1 on account of the enforcement of the judgments of 22 May 2007 and 21 August 2007; 4. Holds that there has been a violation of Article 13 of the Convention on account of the lack of effective domestic remedies in respect of non-enforcement or delayed enforcement of judgments in the applicant’s favour; 5. Holds that the above violations originated in a practice incompatible with the Convention which consists in the State’s recurrent failure to honour judgment debts and in respect of which aggrieved parties have no effective domestic remedy; 6. Holds that the respondent State must set up, within six months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, an effective domestic remedy or combination of such remedies which secures adequate and sufficient redress for non-enforcement or delayed enforcement of domestic judgments in line with the Convention principles as established in the Court’s case-law; 7. Holds that the respondent State must grant such redress, within one year from the date on which the judgment becomes final, to all victims of non-payment or unreasonably delayed payment by State authorities of a judgment debt in their favour who lodged their applications with the Court before the delivery of the present judgment and whose applications were communicated to the Government under Rule 54 § 2 (b) of the Rules of the Court; 8. Holds that pending the adoption of the above measures, the Court will adjourn, for one year from the date on which the judgment becomes final, the proceedings in all cases concerning solely the non-enforcement and/or delayed enforcement of domestic judgments ordering monetary payments by the State authorities, without prejudice to the Court’s power at any moment to declare inadmissible any such case or to strike it out of its list following a friendly settlement between the parties or the resolution of the matter by other means in accordance with Articles 37 or 39 of the Convention; 9. Holds (a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final, EUR 6,000 (six thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage, to be converted into Russian roubles at the rate applicable at the date of settlement; (b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 10. Dismisses the remainder of the applicant’s claim for just satisfaction. Done in English, and notified in writing on 15 January 2009, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. André Wampach Christos RozakisDeputy Registrar President

Friday, 21st May 2004 MR JUSTICE LEVESON: On 24th October 2003 this applicant appeared before His Honour Judge McCreath in the Crown Court at Birmingham, having been committed for sentence by the Birmingham City Magistrates following his conviction for two offences of breaching an antisocial behaviour order and one offence of assaulting a constable in the execution of his duty. He was sentenced to terms of three and a half years' imprisonment on each of the breaches and three months' imprisonment consecutive for the assault, making three years nine months in all. He now renews his application for leave to appeal against that sentence following refusal by the single judge. The background is important. On 31st October 2001, upon the complaint of the Housing Department of Birmingham City Council, an antisocial behaviour order was made by Birmingham Magistrates under section 1 of the Crime and Disorder Act 1998. This order prohibited the applicant for a period of five years from entering Birmingham City Centre, using or engaging in any threatening, abusive, offensive, intimidating, insulting language or behaviour or threatening or engaging in violence or damage against any person or property within the city centre. It is undeniable that this represents a serious infringement upon the liberty of the applicant, not only because it represents a restriction on his right of free movement, but also because breach constitutes a criminal offence punishable with a term of up to five years' imprisonment, which is greater than the maximum penalty which could be imposed for offences which might otherwise be reflected within the terms of the order. It is, however, a response by Parliament to the increasing concern about the impact on the public of antisocial behaviour in its many constituent forms. It follows that this concern must be reflected in the sentences which the court imposes for breach of the order. I go back to the history. Within two months of the order being made, the applicant twice breached its terms. He was prosecuted and, in June 2002, tried in the Crown Court at Birmingham before His Honour Judge Stanley and a jury. He represented himself, as he was entitled to do, but during the course of the prosecution case he fell out with the judge and was not in fact present thereafter. He was convicted and sentenced to terms of four years' imprisonment on each counted concurrent. His appeal against conviction was dismissed, but in relation to sentence, Keith J, giving the judgment of the court (Tuckey LJ, Keith J and Sir Brian Smedley) said: "9. We have every sympathy with the judge's determination to protect the public for as long as possible from a man who he regarded as posing a danger to the public. But, as the judge himself recognised, the sentence which he passed was close to the maximum for a single offence of acting in breach of an antisocial behaviour order and it made the applicant a long term prisoner. We think that a sentence close to the maximum should really be reserved for cases in which the antisocial behaviour order had itself been the subject of persistent and prolonged breaches, or where the breaches of the antisocial behaviour order had consisted of conduct more serious than abusive, offensive and insulting language or conduct, in other words, in which the behaviour was truly intimidating. 10. It is possible that what the judge was doing in the present case was sentencing the applicant for the behaviour which had caused the antisocial behaviour order to be sought in the first place, rather than for the subsequent breaches of the antisocial behaviour order, though we recognise, of course, that the applicant's behaviour following the antisocial behaviour order had to be seen in the context of everything which had gone before. In our judgment, it was not appropriate for sentences as long as these to be passed for the first breaches of an antisocial behaviour order, especially where the behaviour which constituted the breaches was not of the worst kind. In our opinion, sentences totalling two years' imprisonment would have been appropriate." So it was that on 3rd April 2003 the applicant was released from prison on licence, which lasted until 2nd December. Unfortunately, very quickly he was arrested for breaching the antisocial behaviour order in these circumstances. On 8th July 2003 a police officer was working as a CCTV operator, watching cameras trained on Broad Street in the City of Birmingham. At around 10 o'clock the applicant was seen to approach people. He was trying to stop them, bar their way, and he appeared to be begging. His behaviour was described by the operator as aggressive and he looked as if he was asking for money. As soon as people refused he acted in an aggressive manner and then simply went about his way and started blocking other people, again asking for money and again being aggressive in manner. The following day, also in Broad Street, the applicant was again seen by the operator of the CCTV. On this occasion a young lady was seen to refuse the applicant's advances for money, and as she walked past him he slapped her on the bottom. The police arrived and the applicant was arrested. Upon his arrest he was totally compliant. He was cuffed and placed in a police car and taken to the police station. When walking down a corridor from one custody suite to another, however, the applicant happened to cross a police officer whom he knew. He said "Fuck you, Stuart" and then spat in the constable's face. The officer described the spit going into his eyes and mouth. He recoiled and tried to wipe the spittle from his face. When arrested for that offence, the applicant replied in a nonsensical manner. The applicant appeared before Birmingham City Magistrates on 9th July. The court's memorandum of conviction records that on that day, in relation to two allegations of breach of the antisocial behaviour order, he intimated before venue pleas of not guilty. The matter was considered suitable for summary trial, and it is also recorded that he consented to summary trial and pleaded not guilty. He also pleaded not guilty to the allegation of assaulting the police officer. He was remanded in custody for trial on 15th August, on which occasion he was convicted of each and committed for sentence. We have recorded that history because one of the complaints which the applicant now makes is that he had dispensed with the services of his legal adviser and that his right of summary trial was waived in his absence without his consent, or alternatively not offered. The difficulty with that assertion is that, as we understand his lengthy grounds of appeal, he only dispensed with the services of his solicitor after he was refused bail, that is at the end of the process. In any event, this complaint goes to the conviction recorded by the magistrates on 15th August 2003. Even if made out, it could only be the subject of challenge either in the Crown Court or, in some circumstances, by way of judicial review. Each of these routes is now well out of time and, if the services of the solicitor were dispensed with only following the remand in custody, appear to be devoid of merit. It could not, in any event, be the subject of a ground of appeal to the Court of Appeal Criminal Division. When a lawyer within the Criminal Appeal Office sought to assist the applicant by pointing out that he could not appeal his conviction in this court, the applicant made a formal complaint about the lawyer to the effect that his private papers should not have been considered by such a person but only by the judges of the Court of Appeal. That complaint is entirely misconceived. This court is only concerned with convictions imposed following trial in the Crown Court or sentences imposed by the Crown Court, and the attempts by the Criminal Appeal Office to assist the applicant in that regard were both entirely appropriate and proper. We have explained the position only so that the applicant can understand what has happened and why. Whatever other complaints he might have, he has no legitimate grievance with the Criminal Appeal Office. We turn now to the appeal against sentence and summarise, first, the position of the applicant himself. Now 39 years of age, he has appeared before the courts on 37 previous occasions. On no fewer than nine occasions in the eight years prior to his release from prison in April 2003 he had been convicted of using threatening, abusive, insulting words or behaviour contrary to sections 4(1)(a) or 5(1)(a) of the Public Order Act 1986. On nine occasions he had also been convicted of an offence of violence, albeit usually assault or battery. While in custody for these matters he sent a letter to the husband of a prison officer, saying that he intended to kill her. This led to a term of four months' imprisonment, and although obviously not relevant to the appropriate sentence in this case, provides an indication of the applicant's volatility, which is also reflected in comparatively old psychiatric and pre-sentence reports which raise question marks over his psychological health. There was also a pre-sentence report dated 20th October 2003, but it was compiled after the applicant had refused to see the probation officer. The report concluded: "Mr Braxton can present not only as an intelligent man, but also as someone who has a variety of social difficulties. His ability to engage with a range of agencies to resolve such difficulties is questionable and I have grave doubts whether his full co-operation will ever be forthcoming. Because of this he will continue to pose problems for anyone involved in the management or monitoring of his chosen lifestyle." This case thus posed a difficult sentencing decision. Judge McCreath noted the observations of the Court of Appeal on the previous occasion, observing in particular that he had regard to the extent to which behaviour of the kind in which the applicant indulged was menacing to members of the public, disquieting and disturbing. He took the view that he would not re-impose the sentence originally passed by Judge Stanley; neither would he specifically impose the unexpired portion of his previous sentence, amounting to just short of three months. Rather, he had regard to the total sentence commensurate with the gravity of his offending, including the fact that he was in breach of his licence and the fact that this was his second appearance for breach of the antisocial behaviour order, and in that regard to the need to protect the public. In his very lengthy grounds of appeal, the applicant challenges the basis on which he was convicted, but takes the more general point that his behaviour must be considered at the lower end of nuisance activity. He observes that begging, if that is what he was doing, is not an imprisonable offence and that for an officer to say that what he was doing was obviously intimidating, aggressive or likely to cause alarm and distress is no more than the expression of his opinion, at best subjective and wholly devoid of objective deduction. As for slapping the bottom of the woman, this was no more than good natured, boisterous exuberance, and again led to no complaint. Turning to the offence of common assault, he argued that this was committed only in response to nine years of physical and psychological abuse from this officer. Unfortunately, the applicant still does not appear to understand the nature or effect of the order made against him. The antisocial behaviour order is specifically designed to protect the public from frequent and distressing repeated misbehaviour of the type which is the subject of this order, and the applicant was indeed committing a serious criminal offence, even entering the City of Birmingham within the confines set out within the map served upon him when the order was made. He acted in deliberate breach of that order not once but twice (which led to the four year term reduced to two years) and yet again twice more within weeks of his release from that prison sentence. He must understand that what he might consider as trivial in his case, because of the persistence of his conduct, is now treated seriously, specifically to protect the public. It is thus vital that he address this issue and his behaviour in public if he is to avoid further conflict with the law. When refusing leave to appeal, Silber J observed that when reducing the first sentence, the Court of Appeal had considered the applicant "a menace ... and a serious danger to members of the public", and went on to say that the judge was entitled to impose the sentence which he did. We agree that the public are entitled to be protected from this applicant. We have endeavoured to explain why the courts have approached his behaviour in the way in which they have so that he might understand the consequences of what he does and seek some help to deal with his difficulties. For that reason, we direct that a copy of the transcript of this judgment should be sent to him. Having said that, however, this application is refused.

FIRST SECTION CASE OF S.L. v. AUSTRIA (Application no. 45330/99) JUDGMENT STRASBOURG 9 January 2003 FINAL 09/04/2003 This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of S.L. v. Austria, The European Court of Human Rights (First Section), sitting as a Chamber composed of: MrC.L. Rozakis, President,MrsF. Tulkens,MrG. Bonello,MrsN. Vajić,MrsS. Botoucharova,MrA. Kovler,MrsE. Steiner, judges, andMrS. Nielsen, Deputy Section Registrar, Having deliberated in private on 5 December 2002, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 45330/99) against the Republic of Austria lodged with the European Commission of Human Rights (“the Commission”) under former Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by an Austrian national, Mr S.L. (“the applicant”), on 19 October 1998. 2. The applicant was represented by Mr H. Graupner, a lawyer practising in Vienna. The Austrian Government (“the Government”) were represented by their Agent, Ambassador H. Winkler, Head of the International Law Department at the Federal Ministry of Foreign Affairs. 3. The applicant alleged that the maintenance in force of Article 209 of the Austrian Criminal Code, which penalised homosexual acts of adult men with consenting adolescents between fourteen and eighteen years of age, violated his right to respect for his private life and was discriminatory. 4. The application was allocated to the Third Section of the Court (Rule 52 § 1 of the Rules of Court). Within that Section, the Chamber that would consider the case (Article 27 § 1 of the Convention) was constituted as provided in Rule 26 § 1. 5. On 1 November 2001 the Court changed the composition of its Sections (Rule 25 § 1). This case was assigned to the newly composed First Section. 6. By a decision of 22 November 2001 the Court declared the application admissible. 7. The applicant filed observations on the merits (Rule 59 § 1). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 8. The applicant was born in 1981 and lives in Bad Gastein (Austria). 9. At about the age of eleven or twelve the applicant began to be aware of his sexual orientation. While other boys were attracted by women, he realised that he was emotionally and sexually attracted by men, in particular by men who are older than himself. At the age of fifteen he was sure of his homosexuality. 10. The applicant submits that he lives in a rural area where homosexuality is still taboo. He suffers from the fact that he cannot live his homosexuality openly and - until he reached the age of eighteen - could not enter into any fulfilling sexual relationship with an adult partner for fear of exposing that person to criminal prosecution under Article 209 of the Criminal Code (Strafgesetzbuch), of being obliged to testify as a witness on the most intimate aspects of his private life and of being stigmatised by society should his sexual orientation become known. II. RELEVANT DOMESTIC LAW AND BACKGROUND A. The Criminal Code 11. Any sexual acts with persons under fourteen years of age are punishable under Articles 206 and 207 of the Criminal Code. 12. Article 209 of the Criminal Code, in the version in force at the material time, read as follows: “A male person who after attaining the age of nineteen fornicates with a person of the same sex who has attained the age of fourteen years but not the age of eighteen years shall be sentenced to imprisonment for between six months and five years.” 13. This provision was aimed at consensual homosexual acts, as any sexual act of adults with persons up to nineteen years of age are punishable under Article 212 of the Criminal Code if the adult abuses a position of authority (parent, employer, teacher, doctor, etc.). Any sexual acts involving the use of force or threats are punishable as rape, pursuant to Article 201, or sexual coercion pursuant to Article 202 of the Criminal Code. Consensual heterosexual or lesbian acts between adults and persons over fourteen years of age are not punishable. 14. Offences under Article 209 were regularly prosecuted, an average of sixty criminal proceedings being opened per year, out of which a third resulted in a conviction. As regards the penalties applied, a term of imprisonment usually exceeding three months was imposed in 65 to 75% of the cases, of which 15 to 25% were not suspended on probation. According to information given by the Federal Minister for Justice in reply to a parliamentary request, in the year 2001 three persons were serving a term of imprisonment based only or mainly on a conviction under Article 209 of the Criminal Code and four others were held in detention on remand in proceedings relating exclusively to charges under Article 209. 15. On 10 July 2002, following the Constitutional Court's judgment of 21 June 2002 (see below), Parliament decided to repeal Article 209 of the Criminal Code. In addition, it introduced Article 207b of the Criminal Code, which penalises sexual acts with a person under sixteen years of age if that person is for certain reasons not mature enough to understand the meaning of the act and the offender takes advantage of this immaturity or if the person under sixteen years of age is in a predicament and the offender takes advantage of that situation. Further Article 207b penalises inducing persons under eighteen years of age to engage in sexual activities by payment. Article 207b applies irrespective of whether the sexual acts at issue are heterosexual, homosexual or lesbian. The above amendment, published in the Official Gazette (Bundesgesetzblatt) no. 134/2002, entered into force on 14 August 2002. B. Proceedings before the Constitutional Court 16. In a judgment of 3 October 1989, the Constitutional Court found that Article 209 of the Criminal Code was compatible with the principle of equality under constitutional law and in particular with the prohibition on gender discrimination contained therein. That judgment was given upon the complaint of a person who subsequently brought his case before the Commission (Z. v. Austria, no. 17279/90, Commission decision of 13 May 1992, unreported). 17. The relevant passage of the Constitutional Court's judgment reads as follows: “The development of the criminal law in the last few decades has shown that the legislature is striving to apply the system of criminal justice in a significantly more restrictive way than before in pursuance of the efforts it is undertaking in connection with its policy on the treatment of offenders, which have become known under the general heading of "decriminalisation". This means that it leaves offences on the statute book or creates new offences only if such punishment of behaviour harmful to society is still found absolutely necessary and indispensable after the strictest criteria have been applied. The criminal provision which has been challenged is included in the group of acts considered unlawful in order to protect - to an extent thought to be unavoidable - a young, maturing person from developing sexually in the wrong way. ('Homosexual acts are only offences of relevance to the criminal law inasmuch as a dangerous strain must not be placed by homosexual experiences upon the sexual development of young males ...' Pallin in Foregger/Nowakowski (publishers), Vienna commentary to the Criminal Code, 1980, para. 1 on Article 209 ...). Seen in this light, it is the conviction of the Constitutional Court that from the point of view of the principle of equality contained in section 7 para. 1 of the Federal Constitutional Law and section 2 of the Basic Constitutional Act those legislating on the criminal law cannot reasonably be challenged for taking the view, by reference to authoritative expert opinions coupled with experience gained, that homosexual influence endangers maturing males to a significantly greater extent than girls of the same age, and concluding that it is necessary to punish under the criminal law homosexual acts committed with young males, as provided for under Article 209 of the Penal Code. This conclusion was also based on their views of morality, which they wanted to impose while duly observing the current policy on criminal justice which aims at moderation and at restricting the punishment of offences (while carefully weighing up all the manifold advantages and disadvantages). Taking everything into account, we are dealing here with a distinction which is based on factual differences and therefore constitutionally admissible from the point of view of section 7 para. 1 of the Federal Constitutional Law, in conjunction with section 2 of the Basic Constitutional Act.” 18. On 29 November 2001 the Constitutional Court dismissed the Innsbruck Regional Court's request to review the constitutionality of Article 209 of the Criminal Code. 19. The Regional Court had argued, inter alia, that Article 209 violated Articles 8 and 14 of the Convention as the theory that male adolescents ran a risk of being recruited into homosexuality on which the Constitutional Court had relied in its previous judgment, had since been refuted. The Constitutional Court found that the issue was res judicata. It noted that the fact that it had already given a ruling on the same provision did not prevent it from reviewing it anew, if there was a change in the relevant circumstances or different legal argument. However, the Regional Court had failed to give detailed reasons for its contention that relevant scientific knowledge had changed to such an extent that the legislator was no longer entitled to set a different age limit for consensual homosexual relations than for consensual heterosexual or lesbian relations. 20. On 21 June 2002, upon a further request for review made by the Innsbruck Regional Court, the Constitutional Court found that Article 209 Criminal Code was unconstitutional. 21. The Regional Court had argued, firstly, as it had done previously, that Article 209 of the Criminal Code violated Articles 8 and 14 of the Convention and, secondly, that it was incompatible with the principle of equality under constitutional law and with Article 8 of the Convention, as a relationship between male adolescents between fourteen and nineteen years of age was first legal, but became punishable as soon as one reached the age of nineteen and became legal again when the second one reached the age of eighteen. The Constitutional Court held that the second argument differed from the arguments which it had examined in its judgment of 3 October 1989 and that it was therefore not prevented from considering it. It noted that Article 209 concerned only consensual homosexual relations between men aged over nineteen and adolescents between fourteen and eighteen years of age. In the fourteen-to nineteen-year age bracket homosexual acts between persons of the same age (for instance two sixteen-year-olds) or of persons with a one-to five-year age difference were not punishable. However, as soon as one partner reached the age of nineteen, such acts constituted an offence under Article 209 of the Criminal Code. They became legal again when the younger partner reached the age of eighteen. Given that Article 209 did not only apply to occasional relations but also covered ongoing relationships, it led to rather absurd results, namely a change of periods during which the homosexual relationship of two partners was first legal, than punishable and then legal again and could therefore not be considered to be objectively justified. C. Parliamentary debate 22. In the spring of 1995 the Social Democratic Party, the Green Party and the Liberal Party brought motions in Parliament to repeal Article 209 of the Criminal Code. They argued in particular that the legislator in the 1970s had justified this provision on the theory that male adolescents were at a risk of being recruited into homosexuality while female adolescents were not. However, modern science had shown that sexual orientation was already established at the beginning of puberty. Moreover, different ages of consent were not in line with European standards. In this respect they referred in particular to Recommendation 924/1981 of the Parliamentary Assembly of the Council of Europe which had advocated equal ages of consent for heterosexual and homosexual relations. Protection of juveniles against sexual violence and abuse was sufficiently afforded by other provisions of the Criminal Code, irrespective of their sexual orientation. 23. Subsequently, on 10 October 1995, a sub-committee of the Legal Affairs Committee of Parliament heard evidence from eleven experts in various fields such as medicine, sexual science, AIDS prevention, developmental psychology, psychotherapy, psychiatry, theology, law and human-rights law. Nine were clearly in favour of repealing Article 209, an important argument for the experts in the fields of medicine, psychology and psychiatry being that sexual orientation was, in the majority of cases, established before the age of puberty, which disproved the theory that male adolescents were recruited into homosexuality by homosexual experiences. Another recurring argument was that penalising homosexual relations made AIDS prevention more difficult. Two experts were in favour of keeping Article 209: one simply stated that he considered it necessary for the protection of male adolescents; the other considered that despite the fact that there was no such thing as being recruited into homosexuality, not all male adolescents were already sure of their sexual orientation and it was therefore better to give them more time to establish their identity. 24. On 27 November 1996 Parliament held a debate on the motion to repeal Article 209 of the Criminal Code. Those speakers who were in favour of repealing Article 209 relied on the arguments of the majority of the experts heard in the sub-committee. Of those speakers who were in favour of keeping Article 209, some simply expressed their approval while others emphasised that they still considered the provision necessary for those male adolescents who were not sure of their sexual orientation. There was an equal vote at the close of the debate (91 to 91). Consequently, Article 209 remained on the statute book. 25. On 17 July 1998 the Green Party again brought a motion before Parliament to repeal Article 209 of the Criminal Code. The ensuing debate followed much the same lines as before. The motion was rejected by 81 votes to 12. 26. On 10 July 2002 Parliament decided to repeal Article 209 of the Criminal Code (see paragraph 15 above). THE LAW I. ALLEGED VIOLATION OF ARTICLE 8 OF THE CONVENTION TAKEN ALONE AND IN CONJUNCTION WITH ARTICLE 14 27. The applicant complained about the maintenance in force of Article 209 of the Criminal Code which criminalises homosexual acts of adult men with consenting adolescents between fourteen and eighteen years of age. Relying on Article 8 of the Convention, taken alone and in conjunction with Article 14, he alleged that his right to respect for his private life had been violated and that the contested provision was discriminatory, as heterosexual or lesbian relations between adults and adolescents in the same age bracket were not punishable. Article 8 provides: “1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.” Article 14 provides: “The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.” 28. Given the nature of the complaints, the Court deems it appropriate to examine the case directly under Article 14, taken together with Article 8. 29. It is not in dispute that the present case falls within the ambit of Article 8, concerning as it does a most intimate aspect of the applicant's private life (see, for instance, Dudgeon v. the United Kingdom, judgment of 22 October 1981, Series A no. 45, p. 21, § 52; Smith and Grady v. the United Kingdom, nos. 33985/96 and 33986/96, § 90, EHCR 1999-VI). Article 14 therefore applies. 30. The applicant asserted that in Austria, like in the majority of European countries, heterosexual and lesbian relations between adults and consenting adolescents over fourteen years of age were not punishable. He submitted that there was nothing to indicate that adolescents needed more protection against consensual homosexual relations with adults than against such heterosexual or lesbian relations. While not being necessary for protecting male adolescents in general, Article 209 of the Criminal Code also hampered homosexual adolescents in their development by attaching social stigma to their relations with adult men and to their sexual orientation in general. In this connection, the applicant, referring to the Court's case-law, asserted that any interference with a person's sexual sphere and any difference in treatment based on sex or sexual orientation requires particularly weighty reasons (see Smith and Grady v. the United Kingdom, cited above, § 94, and A.D.T v. the United Kingdom, no. 35765/97, § 36, 31 July 2000, unreported). 31. This was all the more true in a field where a European consensus existed to reduce the age of consent for homosexual relations. Despite the fact that a European consensus had been growing ever since the introduction of his application, the Government had failed to come forward with any valid justification for upholding, until very recently, a different age of consent for homosexual relations than for heterosexual or lesbian relations. In particular, the applicant pointed out that in April 1997, in September and December 1998 and again in July 2001, the European Parliament had requested Austria to repeal Article 209. Similarly, the Human Rights Committee, set up under the International Covenant on Civil and Political Rights, has found that Article 209 was discriminatory. The Parliamentary Assembly of the Council of Europe issued two recommendations in 2000 advocating equal ages of consent for heterosexual, lesbian and homosexual relations and a number of member States of the Council of Europe have recently introduced equal ages of consent. 32. Further, the applicant pointed out that the Commission, in the Sutherland case (Sutherland v. the United Kingdom, no. 25186/94, Commission's report of 1 July 1997, unreported) had departed from its earlier case-law relied on by the Government. In his view, the difference between the present application and the Sutherland case is not decisive, as the fact that under United Kingdom law in force at the material time, the adolescent partner was also punishable was only referred to by the Commission as a subsidiary argument. As to the Government's further argument that Article 209 was still considered necessary for the protection of male adolescents, he submitted that the great majority of scientific experts whose evidence had been heard in Parliament in 1995 had disagreed with this view. 33. The Government drew attention to the recent amendment of the Criminal Code. They asserted that the applicant, who has always claimed to be attracted by men older than himself, runs no risk of being punished for any homosexual relations under the newly created section 207b of the Criminal Code. The Government therefore stated that their position remained unchanged and maintained their previous submissions. 34. The Government referred to the Constitutional Court's ruling of 3 October 1989 and to the case-law of the Commission (cf. Z. v. Austria, no. 17279/90, Commission decision of 13 May 1992, unreported, and H.F. v. Austria, no. 22646/93, Commission decision of 26 June 1995, unreported) pointing out that the Commission had found no indication of a violation either of Article 8 alone or taken in conjunction with Article 14 of the Convention in respect of Article 209 of the Austrian Criminal Code. As to the aforementioned case of Sutherland v. the United Kingdom, the Government pointed out that there was an important difference, namely that under Article 209 of the Austrian Criminal Code, the adolescent participating in the offence was not punishable. Moreover, they referred to the fact that, in 1995, the Austrian Parliament had heard numerous experts and had discussed Article 209 extensively with a view to abolishing it, but had decided to uphold it, as the provision was still considered necessary, within the meaning of Article 8 § 2 of the Convention, for the protection of male adolescents. 35. The Court notes at the outset that, following the Constitutional Court's judgment of 21 June 2002, Article 209 of the Criminal Code has been repealed. The amendment in question entered into force on 14 August 2002. However, this development does not affect the applicant's status as a victim within the meaning of Article 34 of the Convention. In this connection, the Court reiterates that a decision or measure favourable to the applicant is not in principle sufficient to deprive him of his status as a victim unless the national authorities have acknowledged, either expressly or in substance, and then afforded redress for, the breach of the Convention (see, for instance, Dalban v. Romania [GC], no. 28114/95, § 44, ECHR 1999-VI). In the admissibility decision of 22 November 2001 in the present case, the Court accepted that the applicant, who has always asserted that he felt attracted by men older than himself, was prevented by Article 209 of the Criminal Code from entering into any sexual relationship corresponding to his disposition. Accordingly, it found that he was directly affected by the maintenance in force of Article 209 until he attained the age of eighteen. Having regard to the present situation, the Court considers that the Constitutional Court's judgment, which is based on other grounds than those relied on in the present application, has not acknowledged let alone afforded redress for the alleged breach of the Convention. Nor can it be said that the “matter has been resolved” within the meaning of Article 37 § 1 (b) of the Convention. The present case differs from the Sutherland case which has been struck off the Court's list upon the request of the parties, who had reached a settlement following a change in domestic law (Sutherland v. the United Kingdom [GC], no. 25186/94, 27 March 2001, unreported). 36. According to the Court's established case-law, a difference in treatment is discriminatory for the purposes of Article 14 if it “has no objective and reasonable justification”, that is if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised”. Moreover, the Contracting States enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment (see the Karlheinz Schmidt v. Germany judgment of 18 July 1994, Series A no. 291‑B, pp. 32–33, § 24; Salgueiro da Silva Mouta v. Portugal, no. 33290/96, § 29, ECHR 1999-IX and Fretté v. France, no. 36515/97, §§ 34 and 40, ECHR 2002-I). 37. The applicant complained about a difference in treatment based on his sexual orientation. In this connection, the Court reiterates that sexual orientation is a concept covered by Article 14 (see the above-cited Salgueiro da Silva Mouta v. Portugal case, § 28). Just like differences based on sex, (see the Karlheinz Schmidt v. Germany judgment, ibid. and the Petrovic v. Austria judgment of 27 March 1998, Reports of Judgments and Decisions 1998-II, p. 587, § 37), differences based on sexual orientation require particularly serious reasons by way of justification (see the above-cited Smith and Grady v. the United Kingdom case, § 90). 38. The Government asserted that the contested provision served to protect the sexual development of male adolescents. The Court accepts that the aim of protecting the rights of others is a legitimate one. It remains to be ascertained whether there existed a justification for the difference of treatment. 39. The Court observes that in previous cases relied on by the Government which related to Article 209 of the Austrian Criminal Code, the Commission found no violation of either Article 8 of the Convention alone or taken together with Article 14. However, the Court has frequently held that the Convention is a living instrument, which has to be interpreted in the light of present-day conditions (see, for instance, the above-cited Fretté v. France case, ibid.) In the Sutherland case, the Commission, having regard to recent research according to which sexual orientation is usually established before puberty in both boys and girls and to the fact that the majority of member States of the Council of Europe have recognised equal ages of consent, explicitly stated that it was “opportune to reconsider its earlier case-law in the light of these modern developments” (Sutherland v. the United Kingdom, Commission's report, cited above, §§ 59-60). It reached the conclusion that in the absence of any objective and reasonable justification the maintenance of a higher age of consent for homosexual than for heterosexual acts violated Article 14 taken together with Article 8 of the Convention (ibid., § 66). 40. Furthermore, the Court considers that the difference between the Sutherland case and the present case, namely that the adolescent partner participating in the proscribed homosexual acts was not punishable, is not decisive. This element was only a secondary consideration in the Commission's report (ibid., § 64). 41. What is decisive is whether there was an objective and reasonable justification why young men in the fourteen-to eighteen-year age bracket needed protection against any sexual relationship with adult men, while young women in the same age bracket did not need such protection against relations with either adult men or women. In this connection the Court reiterates that the scope of the margin of appreciation left to the Contracting State will vary according to the circumstances, the subject matter and its background; in this respect, one of the relevant factors may be the existence or non‑existence of common ground between the laws of the Contracting States (see, for instance, Petrovic v. Austria, cited above, § 38, and Fretté v. France, cited above, § 40). 42. In the present case the applicant pointed out, and this has not been contested by the Government, that there was an ever growing European consensus to apply equal ages of consent for heterosexual, lesbian and homosexual relations. Similarly, the Commission observed in the above-mentioned Sutherland case that “equality of treatment in respect of the age of consent is now recognised by the great majority of Member States of the Council of Europe” (ibid., § 59). 43. The Government relied on the Constitutional Court's judgment of 3 October 1989, which had considered Article 209 of the Criminal Code necessary for avoiding “that a dangerous strain .. be placed by homosexual experiences upon the sexual development of young males”. However, this approach has been out-dated by the 1995 Parliamentary debate on a possible repeal of that provision. As was rightly pointed out by the applicant, the vast majority of experts heard in Parliament clearly expressed themselves in favour of an equal age of consent, finding in particular that sexual orientation was in most cases established before the age of puberty and that the theory that male adolescents were “recruited” into homosexuality had thus been disproved. Notwithstanding its knowledge of these changes in the scientific approach to the issue, Parliament decided in November 1996 to keep Article 209 on the statute book. 44. To the extent that Article 209 of the Criminal Code embodied a predisposed bias on the part of a heterosexual majority against a homosexual minority, these negative attitudes cannot of themselves be considered by the Court to amount to sufficient justification for the differential treatment any more than similar negative attitudes towards those of a different race, origin or colour (see Smith and Grady v. the United Kingdom, cited above, § 97). 45. In conclusion, the Court finds that the Government have not offered convincing and weighty reasons justifying the maintenance in force of Article 209 of the Criminal Code. 46. Accordingly, there has been a violation of Article 14 of the Convention taken in conjunction with Article 8. 47. Having regard to the foregoing considerations, the Court does not consider it necessary to rule on the question whether there has been a violation of Article 8 taken alone. II. APPLICATION OF ARTICLE 41 OF THE CONVENTION 48. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Damage 49. The applicant requested 1 million Austrian schillings (ATS), equivalent to 72,672.83 euros (EUR) as compensation for non-pecuniary damage. He asserted that he was hampered in his sexual development. He reiterates that he felt particularly attracted by men older than himself but that Article 209 of the Criminal Code made any consensual sexual relationship with men over nineteen years of age an offence. Moreover, Article 209 generally stigmatised his sexual orientation as being contemptible and immoral. Thus, he suffered feelings of distress and humiliation during all of his adolescence. 50. The Government did not comment. 51. The Court observes that, in a number of cases concerning the maintenance in force of legislation penalising homosexual acts between consenting adults, it considered that the finding of a violation in itself constituted sufficient just satisfaction for any non-pecuniary damage suffered (see the Dudgeon v. the United Kingdom judgment (just satisfaction) of 24 February 1983, Series A no. 59, pp. 7-8, § 14; the Norris v. Ireland judgment of 26 October 1988, Series A no. 142, pp. 21-22, § 50; and the Modinos v. Cyprus judgment of 22 April 1993, Series A no. 259, p. 12, § 30). 52. Nevertheless the Court notes that the judgments in the above-cited cases were given between twenty and ten years ago. The Court considers it appropriate to award just satisfaction for non-pecuniary damage in a case like the present one, even though Article 209 of the Criminal Code has recently been repealed and the applicant has therefore achieved in part the objective of his application. In fact, the Court attaches weight to the fact that the applicant was prevented from entering into relations corresponding to his disposition until he reached the age of eighteen. Making an assessment on an equitable basis, the Court awards the applicant EUR 5,000. B. Costs and expenses 53. The applicant requested a total amount of EUR 30,305.34 for costs and expenses incurred in the Strasbourg proceedings. 54. The Government did not comment. 55. The Court finds the applicant's claim excessive. Making an assessment on an equitable basis, the Court awards EUR 5,000 for costs and expenses. C. Default interest 56. The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank to which should be added three percentage points. FOR THESE REASONS, THE COURT 1. Holds unanimously that there has been a violation of Article 14 taken in conjunction with Article 8 of the Convention; 2.Holds unanimously that there is no need to rule on the complaints lodged under Article 8 of the Convention alone. 3. Holds (a) by 4 votes to 3 that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final according to Article 44 § 2 of the Convention, EUR 5,000 (five thousand euros) in respect of non-pecuniary damage; (b) unanimously that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final according to Article 44 § 2 of the Convention, EUR 5,000 (five thousand euros) in respect of costs and expenses; (c) unanimously that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 4. Dismisses unanimously the remainder of the applicant's claim for just satisfaction. Done in English, and notified in writing on 9 January 2003, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Søren NielsenChristos Rozakis Deputy RegistrarPresident In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the following separate opinion is annexed to this judgment: (a) parly dissenting opinion of Mrs Vajić, joined by Mrs Botoucharova and Mr Kovler. C.R.S.N. PARTLY DISSENTING OPINION OF JUDGE VAJIĆ JOINED BY JUDGES BOTOUCHAROVA AND KOVLER In the present case I do not share the opinion of the majority on the question of compensation to be awarded to the applicant for non-pecuniary damage under Article 41 of the Convention. Taking account of the facts of the present case I do not see any reason to depart from the established case-law of the Court concerning the maintenance in force of legislation penalising homosexual acts between consenting adults (see the Dudgeon v. the United Kingdom judgment (just satisfaction) of 24 February 1983, Series A no. 59, pp.7-8, § 14; the Norris v. Ireland judgment of 26 October 1988, Series A no. 142, pp. 21-22, § 50; the Modinos v. Cyprus judgment of 22 April 1993, Series A no. 259, p. 12, § 30) in which no non-pecuniary damage was awarded. This is all the more so as Austria has voluntarily taken steps to modify the situation by changing the law in question (i.e. its Criminal Code, see § 15 of the judgment) thus bringing it in line with the requirements of the Convention and its case-law. This being so and having regard to the nature of the breach found, I am of the opinion that in relation to the applicant's claim for non-pecuniary damage the present judgment constitutes in itself adequate just satisfaction for the purposes of Article 41.

Murtaza Fazal Ali, J. This appeal by special leave is directed against the judgment of the Madras High Court dated 15th July, 1974. The appellant has been companyvicted under Section 302 I.P.C. for causing the death of his wife Eswarammal and his father-in-law Chelliah Asari. The prosecution case has been narrated in detail in the judgments of the Sessions Judge and the High Court. It appears that the appellant was married to Eswarammal about 10 years before the occurrence and their relations were little strained because the appellant was a spend-thrift and did number pay any money to his wife. The father-in-law was gracious enough to permit the appellant to live in his house. Inspite of this there had been companystant quarrels between the husband and the wife. Sometimes the father-in-law intervened and at other times the neighbours. Two days prior to the occurrence, at about 10.30 p.m. there was again a quarrel between Eswarammal and the appellant, but P.W 3 intervened and pacified the matter. On the night of 24th May 1973 at about 2.00 a.m. while P.Ws. 1 2 were sleeping in their houses they heard some numberse companying from the companyrt-yard of appellant where the appellant and deceased were living. P.Ws. 1 and 2 got up and companye to the companyrt-yard and saw the accused beating his wife. P. Ws. 1 2 then separated the appellant and his wife. By that time Chellish Asari woke up and abused the appellant. The appellant then took hold of a aruval and started assaulting his wife and after inflicting a large number of injuries on the person he proceeded towards Chellish Asari his father-in-law, whom also he assaulted with the aruval. There were 22 injuries on the person of his deceased wife Eswarammal and 13 injuries on Chellish Asari. The entire occurrence has been proved by P.Ws. 1 2 who have been believed by the two companyrts. Moreover the appellant was caught hold by the witnesses and produced before the Police Station, where a F.I.R. was lodged at 2.30 a.m. the same night. The Police visited the scene of occurrence and after usual investigation submitted charge-sheet against the appellant. The case was thereafter put up before the Sessions Judge who companyvicted the accused and sentenced the appellant to death. The High Court companyfirmed the sentence of death. Hence this appeal by special leave. We have gone through the entire matter and heard Mr. S.J.S. Fernandez, companynsel for the appellant. We are extremely grateful to Mr. S.J.S. Fernandez amicus curiae in this case and his arguments have been of very great assistance to us. We are, however, unable to find any error of law in the judgment of the High Court. The central evidence against the appellant companysists of P. Ws. 1 2 who are close neighbours and who have been believed by the two companyrts. The evidence of these witnesses is companyroborated by the companyduct of the accused in producing the aruval murder weapon at the Police Station. It was argued by Mr. Fernandez that there was some discrepency in the time when the F.I.R. was lodged. We relied on a statement of the Inspector that he came to the Police Station at 4.30 a.m. which according to him falsified the version of the prosecution that the F.I.R. was lodged at 2.30 a. m. We have perused the record and we feel that there is some companyfusion in this regard. According to the evidence of the Investigation Officer he had reached the place of occurrence at 4.30 a.m. and he has also stated that he had received information of the occurrence at 2.30 a.m. It seems to us that the Sessions Judge, instead of recording place of occurrence, wrote Police Station obviously by mistake otherwise, the evidence of Investigation Officer becomes wholly unintelligible. It was than argued that there were other neighbours who were number examined by the prosecution. That, however, by itself is numberground to discredit the prosecution case. Finally, Mr. Fernandez pleaded on the question of sentence. It is, however, a case of unprovoked dastardly double murder and we feel that this was a fit case there the extreme penalty of death was rightly inflicted. The appellant was a spend-thrift. He killed number only his wife but also his father in-law, who was his benefactor and had given shelter to him in his house. As many as 22 injuries were caused to the wife and 13 to the father-in-law of whom some of them proved fatal.

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 16 May 2006 1(1) Case C-68/05 P Koninklijke Coöperatie Cosun UA v Commission of the European Communities (Appeal – Admissibility of new arguments – Remission of an import levy – Sugar – Regulation (EEC) No 1430/79 – Equity)I – Introductory comments 1. The present appeal proceedings essentially concern the question whether the charge on non-exported C sugar is to be regarded as an import or export levy within the meaning of customs legislation. (2) On 2 May 2002 the Commission of the European Communities adopted a decision (3) declaring an application for the remission of import duties to be inadmissible. The appeal is against the judgment of the Court of First Instance of 7 December 2004 (4) dismissing the action brought against that decision. II – Legislative background A – The common organisation of the markets in the sugar sector 2. Council Regulation (EEC) No 1785/81 of 30 June 1981 on the common organisation of the markets in the sugar sector (5) (‘the basic regulation’) governs the production, importation and exportation of sugar. It provides inter alia for a system of production quotas which, according to the 15th recital in its preamble, constitutes a means of guaranteeing producers Community prices and an outlet for their production. 3. Under that quota system, Article 24 of the basic regulation fixes for each marketing year (that is to say, from 1 July in one year until 30 June in the following year) basic quantities for ‘A sugar’ and ‘B sugar’, to be allocated by each Member State to the sugar-producing undertakings established in its territory. Each producing undertaking is thus allocated one A quota and one B quota for each marketing year. Any quantity of sugar which is produced outside the sum of its A and B quotas is termed ‘C sugar’ or ‘non-quota sugar’. 4. The conditions governing the disposal of sugar vary according to its categorisation. A sugar and B sugar are the subject of various support mechanisms laid down in the basic regulation, with A sugar benefiting from a higher level of guarantees (guaranteed intervention prices and export aid in the form of refunds) than that afforded to B sugar (export refunds only). 5. C sugar is not eligible for the price support system nor for the export refunds system. Furthermore, C sugar may not be disposed of on the internal market and must, accordingly, be disposed of outside the Community and sold on the world market. 6. Article 26 of the basic regulation provides in that regard: ‘1. … C sugar which is not carried forward … may not be disposed of on the Community’s internal market and must be exported in the natural state before 1 January following the end of the marketing year in question. … 3. Detailed rules for the application of this article shall be adopted in accordance with the procedure laid down in Article 41. These rules shall provide, in particular, for the levying of a charge on the C sugar … referred to in paragraph 1 in respect of which proof of its export in the natural state within the prescribed period was not furnished at a date to be determined.’ 7. Commission Regulation (EEC) No 2670/81 of 14 September 1981 laying down detailed implementing rules in respect of sugar production in excess of the quota (6) specifies the circumstances in which exports of C sugar shall be considered to have taken place. Article 1 of that regulation, in the version brought into force by Commission Regulation (EEC) No 3892/88 of 14 December 1988 amending Regulation (EEC) No 2670/81, (7) provides in particular: ‘1. The export referred to in Article 26(1) of [the basic regulation] shall be considered to have taken place if: (a) the C sugar … is exported from the Member State on whose territory it was produced; (b) the export declaration in question is accepted by the Member State referred to under (a) before 1 January following the end of the marketing year during which the C sugar … was produced; (c) the C sugar … left the customs territory of the Community at the latest within 60 days from 1 January referred to under (b); (d) the product has been exported without refund or levy … from the Member State referred to under (a). Except in the case of force majeure, if all of the conditions provided for in the first subparagraph are not complied with, the quantity of C sugar … in question shall be considered to have been disposed of on the internal market. In the case of force majeure, the competent agency of the Member State on whose territory the C sugar … has been produced shall adopt the measures which are necessary by virtue of the circumstances invoked by the interested party.’ 8. Article 3 of Regulation No 2670/81, as amended by Article 1 of Commission Regulation (EEC) No 3559/91 of 6 December 1991 amending Regulation No 2670/81, (8) is worded as follows: ‘1. The Member State concerned shall impose on the quantities which, within the meaning of Article 1(1), have been disposed of on the internal market a charge equal to the sum of: (a) for C sugar, per 100 kilograms: – the highest import levy per 100 kilograms of white or raw sugar, as the case may be, applicable during the period comprising the marketing year during which the sugar in question was produced and the six months following that marketing year, and – 1 [euro]; … 4. In the case of quantities of C sugar … which prior to export were destroyed or damaged without possibility of recovery, in circumstances recognised by the competent agency of the Member State concerned as a case of force majeure, the relevant amount referred to in paragraph 1 shall not be levied.’ B – The equity clause in the Community customs legislation 9. The Community customs legislation allows for the repayment in whole or in part of import or export duties paid or for a remission of the amount of a customs debt. The conditions for remission are set out in Article 13 of Council Regulation (EEC) No 1430/79 of 2 July 1979 on the repayment or remission of import or export duties. (9) 10. Article 13(1) provides: ‘Import duties may be repaid or remitted in special situations …, which result from circumstances in which no deception or obvious negligence may be attributed to the person concerned. …’ 11. Article 14 of Regulation No 1430/79 states that the provisions of Article 13 are to apply mutatis mutandis to the repayment or remission of export duties. 1. 12. Article 1(2)(a) of Regulation No 1430/79 provides that ‘import duties’ means ‘customs duties and charges having equivalent effect, as well as agricultural levies and other import charges laid down within the framework of the common agricultural policy or in that of specific arrangements applicable, pursuant to Article 235 of the Treaty [now Article 308 EC], to certain goods resulting from the processing of agricultural products’. 2. 13. Article 1(2)(b) of Regulation No 1430/79 states that ‘export duties’ means ‘agricultural levies and other export charges laid down within the framework of the common agricultural policy, or in that of specific arrangements applicable, pursuant to Article 235 of the Treaty, to certain goods resulting from the processing of agricultural products’. III – The facts of the case, the proceedings before the Court of First Instance and the judgment under appeal A – Facts of the case 12. Koninklijke Coöperatie Cosun UA (‘Cosun’ or ‘the appellant’), which is a cooperative established in the Netherlands, produced C sugar during the marketing years 1991/92 and 1992/93. Between 10 February and 23 September 1993, acting through its subsidiary Limako Suiker BV, it sold to the company Django’s Handelsonderneming a number of consignments of C sugar intended for export to Croatia and Slovenia. Between 22 July and 16 August 1993 and between 26 August and 24 September 1993, Cosun sold consignments of C sugar to the companies NV Voeders SA Aliments Serry and Sieger BV which were intended for Morocco. 13. On 24 June 1993, the Nederlandse Fiscale Inlichtingen- en Opsporingsdienst (Netherlands Tax Inquiry and Investigation Department; ‘FIOD’) requested the Hoofdproduktschap Akkerbouw (‘HPA’), the competent authority in the Netherlands for the application of the provisions relating to the common organisation of markets, including the sugar market, to provide information for the purposes of an investigation relating in particular to Django’s Handelsonderneming. The HPA provided the FIOD with information concerning irregularities relating to customs documents for operations involving exports of C sugar. The FIOD asked the HPA to maintain a certain distance in its dealings with Cosun, in view of the investigation that was being undertaken. The irregularities found in the export documents received by the HPA gave rise to the opening of a judicial inquiry into allegations of fraud against Django’s Handelsonderneming. 3. 16. In June and August 1993, the HPA contacted Cosun and its subsidiary Limako Suiker to inform them of the incorrect stamping of the customs documents for the goods intended for Croatia and Slovenia. In October 1993, incorrectly stamped documents relating to consignments of sugar intended for Morocco were received by the HPA. 4. 17. On 14 October 1993, the Netherlands authorities provided Cosun with a statement of the numbers of the export forms in relation to which there was no proof of export from the Community. 5. 18. On 25 April 1994, the HPA imposed a charge on Cosun of NLG 6 284 721.03, on the ground that it had failed to prove that a certain number of consignments of C sugar had left the territory of the Community for the specified destinations in Croatia, Slovenia and Morocco. On 13 June 1994, the amount of the levy was reduced to NLG 6 250 856.78, that is to say EUR 2 836 515.14, by reason of an error made in the original calculation. 6. 19. On 18 May 1994, Cosun lodged an objection with the HPA in relation to the levy imposed. On 19 June 1995, that objection was rejected by the HPA. On 14 July 1995, Cosun brought an appeal against that decision before the College van Beroep voor het bedrijfsleven (Administrative Court for Trade and Industry; ‘CBB’). 7. 20. The CBB referred two questions to the Court for a preliminary ruling under Article 234 EC in the context of the dispute between Cosun and the HPA over the charge imposed on Cosun because of its failure to export the quantities of C sugar in question. (10) By the first question, the CBB seeks to establish whether, if the possibility of remission under Article 13 of Regulation No 1430/79 is not applicable to levies, the basic regulation and Regulation No 2670/81 are invalid in view of the absence of the possibility of repaying or remitting levies on C sugar on equitable grounds. With the second question, the CBB seeks to establish what effects the invalidity of those regulations would have on the obligation to pay the levy on C sugar in circumstances such as those obtaining in the present case. 8. 21. On 24 April 1995, Cosun applied to the HPA for remission of duties charged, under Article 239 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (11) and Article 905 of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92. (12) On 6 August 2001, the Kingdom of the Netherlands applied to the Commission for remission of the import duties, for the benefit of Cosun. 9. 22. On 2 May 2002, the Commission adopted Decision REM 19/01 declaring the application for remission of import duties presented by the Kingdom of the Netherlands for the benefit of Cosun to be inadmissible. On the basis of that decision, the HPA informed Cosun on 6 June 2002 that its application for remission was inadmissible. B – The proceedings before the Court of First Instance and the judgment under appeal 10. 23. Cosun then instituted proceedings before the Court of First Instance seeking the annulment of Commission Decision REM 19/01 of 2 May 2002. Cosun applied for the contested decision to be declared void and for the Commission to be ordered to pay the costs of the proceedings. The Commission applied for the action to be dismissed as unfounded and for Cosun to be ordered to pay the costs of the proceedings. 11. 24. By judgment of 7 December 2004, the Court of First Instance dismissed the action for annulment in Case T-240/02 Koninklijke Coöperatie Cosun v Commission. IV – Forms of order sought and grounds of appeal 12. 25. Cosun appealed to the Court of Justice against the judgment of the Court of First Instance and requested that – the judgment under appeal be set aside; – a final decision be taken on the legal dispute, through the setting-aside of the contested decision; – in the alternative, the case be referred back to the Court of First Instance; – the Commission be ordered to pay the costs of the proceedings at first instance and of the appeal proceedings. 13. 26. Cosun bases its appeal on four grounds. First, it alleges breach of Community law in that the Court of First Instance found that the charge on non-exported C sugar was not an import or export duty within the meaning of Article 13 of Regulation No 1430/79. 14. 27. Second, Cosun claims, in the alternative, that the Court of First Instance failed to recognise that the charge on non-exported C sugar was indeed treated as an import levy for the purposes of the applicability of Regulation No 1430/79. According to this ground of appeal, which is divided into three parts, the Court of First Instance failed to recognise that: – the charge on non-exported C sugar should be regarded as a customs duty since it serves the same purpose as a customs duty; – the manner in which the charge on non-exported C sugar is determined indicates that the charge should be regarded as a customs duty; – the manner in which the amount to be recovered on non-exported C sugar is determined indicates that the charge is to be regarded as a customs duty. 15. 28. Third, Cosun claims, in the alternative, that, when examining the second and third grounds of appeal raised in the alternative by the appellant in its application, the Court of First Instance breached Community law. This ground is divided into two parts: – When examining the second ground of appeal raised by the appellant in the application submitted to the Court of First Instance, the latter exceeded the limits of the legal dispute. – The Court of First Instance was wrong to ignore the third ground of appeal raised by the appellant in the alternative. 16. 29. Fourth, Cosun complains, in the alternative, of a breach of the principles of equal treatment, legal certainty and equity. 17. 30. The Commission, on the other hand, requests that the appeal be dismissed partly as inadmissible and partly as unfounded. V – The first ground of appeal A – Arguments of the parties 18. 31. Cosun takes the view that the Court of First Instance committed an error of law by finding in paragraphs 36 to 38 and 47 of the judgment under appeal that the charge on C sugar was not an agricultural import or export levy within the meaning of Article 1(2)(a) and (b) of Regulation No 1430/79. 19. 32. The Court of First Instance also failed in its duty to give a statement of reasons by interpreting the term ‘agricultural levy’ narrowly and not explaining why a wider interpretation must be excluded. 20. 33. In contrast, the Commission contends that the Court of First Instance did not in any way interpret the term ‘agricultural levy’ narrowly, but rightly decided that the charge on C sugar could not be formally regarded as an agricultural import or export levy within the meaning of Article 1(2)(a) and (b) of Regulation No 1430/79. B – Analysis 21. 34. As regards the appellant’s argument that the Court of First Instance committed an error of law in failing to state the precise reasons for its very narrow interpretation of Article 1(2)(a) and (b) of Regulation No 1430/79, reference must be made to the statement of reasons given by the Court of First Instance in paragraphs 35 to 38 of the judgment under appeal. 22. 35. The Court of First Instance gives essentially three reasons for the interpretation which it chose. 23. 36. First, it rightly points out that the charge imposed on C sugar does not come within any of the three categories listed conclusively in the provisions cited: first, customs duties, second, charges having equivalent effect, and, third, agricultural levies and other import or export charges laid down within the framework of the common agricultural policy or in that of specific arrangements applicable, pursuant to Article 308 EC, to certain goods resulting from the processing of agricultural products. 24. 37. Second, it states that the charge falls to be levied where there is an absence of proof, on the date by which such proof requires to have been furnished, of the export of a quantity of C sugar within the prescribed period and that the charge is therefore imposed on a producer of C sugar by reason of the fact that that non-quota sugar, which was produced within the Community, was disposed of on the internal market. 25. 38. Third, the Court of First Instance also makes a detailed examination to determine whether the amount imposed on C sugar comes within one of the three categories. 26. 39. As regards the possible classification of the charge as a customs duty, the Court of First Instance emphasises that the charge imposed on C sugar does not constitute a customs duty, that is to say a duty based on the Common Customs Tariff of the European Communities, in terms of Articles 23 EC and 26 EC. 27. 40. Nor, the Court of First Instance argues on the basis of settled case-law, (13) is it a charge having equivalent effect, such a charge being constituted by any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense. 28. 41. Lastly, the Court of First Instance explains why the amount in question is not strictly an agricultural charge on imports or exports, emphasising that it is not a levy charged on agricultural products by reason of their crossing the external frontiers of the Community. 29. 42. The appellant’s first argument is thus unfounded. 30. 43. Second, the appellant alleges that the Court of First Instance did not state the reasons for ruling out a less narrow interpretation of Article 1(2)(a) and (b) of Regulation No 1430/79. 31. 44. It should be pointed out in this respect that the Court of First Instance does not confine itself to an interpretation of the wording of the provision at issue. Instead, it continues the statement of reasons in paragraphs 39 to 46 of its judgment before reaching its final conclusion in paragraph 47. 32. 45. Thus, the Court of First Instance considers the objective – whether the amount charged on non-exported C sugar pursues the same objective as customs duties. In this context, the Court of First Instance emphasises that the levy imposed on non‑quota sugar that is not exported forms part of the mechanisms of the common organisation of the market in sugar. It points out that those mechanisms aim to ensure the attainment of common objectives, in particular that the necessary guarantees in respect of employment and standards of living of producers, the guaranteeing of sugar supplies to all consumers, a certain level of prices and the stability of the sugar market are maintained. 33. 46. On that basis, the Court of First Instance stresses that each of the mechanisms referred to pursues specific objectives or responds to particular needs. The Court of First Instance therefore concludes that the charge on production which applies to C sugar clearly does not pursue the same objectives as a customs duty or the same objectives as the import levies and export refunds provided for under the common organisation of the market in sugar. 34. 47. In addition, the Court of First Instance analyses the aims of the common trading system at the external frontiers of the Community in general and of the common organisation of the market in sugar in particular. In this context, the Court of First Instance clearly emphasises the importance of the prohibition of disposing of C sugar on the internal market and explains at length the significance of the penalties imposed for breaching that prohibition. According to the Court of First Instance, however, the fact that the amount to be classified as a penalty is calculated on the basis of import levies does not make it an import duty. 35. 48. In view of the statement of reasons given by the Court of First Instance, the appellant’s second argument must similarly be regarded as unfounded. 36. 49. The first ground of appeal must accordingly be dismissed as unfounded. VI – The second ground of appeal A – Admissibility 1. Arguments of the parties 37. 50. The Commission maintains that the second ground of appeal is inadmissible primarily because it reproduces the pleadings and arguments previously submitted to the Court of First Instance and in reality amounts to no more than a request for re-examination of the application, which falls outside the jurisdiction of the Court of Justice. 38. 51. In its reply, Cosun explains that with its second ground of appeal it is not in any way seeking to have the original application re-examined, but that it is claiming that the Court of First Instance interpreted and applied Community law incorrectly, from which it followed that the appeal is admissible. 2. Analysis 39. 52. As regards the admissibility of the second ground of appeal, reference must be made to the settled case-law of the Court of Justice, according to which an appeal is inadmissible if it merely reproduces the pleas in law and arguments previously submitted to the Court of First Instance without even including an argument specifically identifying the error of law allegedly vitiating the judgment under appeal. In reality, such an appeal amounts to no more than a request for re-examination of the application submitted to the Court of First Instance, which falls outside the jurisdiction of the Court of Justice. (14) 40. 53. According to this case-law, the second ground of appeal would be inadmissible if the appellant did no more than reproduce submissions made at first instance on the alleged lack of a statement of reasons for the disputed decision, without any indication of the error of law which the Court of First Instance is alleged to have made in the judgment under appeal. (15) 41. 54. These comments by the Court of Justice must not, of course, be seen in absolute terms or in isolation. 42. 55. Where an appellant challenges the interpretation or application of Community law by the Court of First Instance, points of law examined at first instance may be discussed again in the course of an appeal since, if an appellant could not thus base his appeal on pleas in law and arguments already relied on before the Court of First Instance, an appeal would be deprived of part of its purpose. (16) 43. 56. In the present case, however, the second ground of appeal seeks to contest the assessment by the Court of First Instance of a point of law which was referred to it. The appellant accurately specifies the error of law of which the Court of First Instance is accused and so opposes the interpretation of Community law on which it is based. (17) 44. 57. The second ground of appeal is thus admissible. B – The substance 1. Arguments of the parties 45. 58. According to Cosun, the Court of First Instance committed an error of law even if the charge on C sugar did not formally correspond to the concept of import or export levy within the meaning of Article 1(2)(a) and (b) of Regulation No 1430/79, since in paragraphs 40 to 46 of the judgment under appeal the Court of First Instance rejected Cosun’s argument that the amount levied on C sugar should be regarded as an import levy within the meaning of Article 13 of Regulation No 1430/79 since it pursued the same objectives as a customs duty which was calculated on the basis of the import levies applicable to sugar and was intended to ensure that sugar produced in excess of quotas and not exported was subjected to conditions comparable to those applicable to sugar imported from third countries. 46. 59. The Commission, which considers that ground of appeal to be inadmissible, requests the Court of Justice in the alternative to dismiss that ground of appeal as unfounded. 2. Analysis 47. 60. The appellant complains, firstly, that the Court of First Instance failed to recognise that the charge levied on C sugar pursued the same objective as customs duties. In this respect, the appellant criticises the Court of First Instance for not indicating the specific objective of the charge on C sugar and how its objective differed from that of customs duties. 48. 61. As is evident from the judgment of the Court of First Instance, and especially paragraphs 43, 44 and 45 thereof, that Court not only considered the objectives of import levies and export refunds but also explained the objectives of the system of the common organisation of the sugar market and, in this context, the significance of the arrangement relating to C sugar, including the charge. 49. 62. The first part of the second ground of appeal should therefore be dismissed as unfounded. 50. 63. In the second ground of appeal, the appellant also complains that the Court of First Instance failed to realise that it follows from the manner in which the amount levied on non-exported C sugar is calculated that that charge should be regarded as a customs duty. 51. 64. In this respect, it is enough to refer to paragraphs 44, 45 and 46 of the judgment of the Court of First Instance, from which it is clear that the fact that the calculation of the amount of the charge must be based on import levies does not mean that the charge becomes such a levy. 52. 65. As for the appellant’s reliance on a recital in the preamble to Regulation (EEC) No 2645/70, (18) it must be pointed out that the latter is an implementing regulation, which is, moreover, no longer in force. 53. 66. With regard to the legal effect of Regulation No 2645/70 or of the regulation which is the subject of the present proceedings, Regulation No 2670/81, it must also be pointed out that these are Commission regulations. Although they implement Council regulations, they cannot amend fundamental legal classifications effected in superior legislation or effect a legal classification for which such legislation does not provide, such as legal classification as an import levy. 54. 67. The second ground of appeal should therefore be dismissed as unfounded. VII – The third ground of appeal A – Arguments of the parties 55. 68. In the first part of the third ground of appeal, Cosun argues that in its analysis of the second plea in law the Court of First Instance gave judgment outside the scope of the legal dispute limited by the application. 56. 69. Although that plea had not questioned the validity of Regulation No 2670/81, the Court of First Instance had implicitly undertaken an examination of the validity of the general legal principles in paragraphs 58 to 62 of the judgment under appeal. By so doing, it had given judgment outside the scope of the legal dispute defined by Cosun’s application and consequently breached the procedural principle which states that the application determines the limits to the legal dispute. 57. 70. On the first part of the third ground of appeal, the Commission declares that it is by no means evident from paragraphs 58 to 62 of the judgment under appeal that the Court of First Instance had examined the validity of Regulation No 2670/81. 58. 71. In the second part of the third ground of appeal, Cosun argues that the Court of First Instance was wrong to refuse to analyse the third plea in law, in which the appellant had contended that the Commission was obliged to examine the application for remission outside the context of the aforementioned regulation on the basis of the principles of legal certainty, equality and equity if Article 13 of Regulation No 1430/79 was not applicable. 59. 72. On the second part of the third ground of appeal, the Commission argues that the pleas in law termed by Cosun as the ‘second’ and ‘third’ were analysed together by the Court of First Instance as the ‘first part of the second plea in law’ and the ‘second part of the second plea in law’. Consequently, the Court of First Instance had indeed analysed the ‘third’ plea in law in paragraphs 57 to 62 of the judgment under appeal. B – Analysis 60. 73. The first part of the third ground of appeal essentially concerns the question whether the Court of First Instance exceeded the limits of the legal dispute. In accusing the Court of First Instance of having examined the validity of a legal act, namely Regulation No 2670/81, about whose illegality it had not complained as applicant before the Court of First Instance, the appellant has surely seriously misunderstood the wording of the judgment. 61. 74. Although the Court of First Instance makes reference to the cited regulation in paragraphs 56 to 62, it does not examine its validity. It cites this legal act rather so that a full description may be given of the pertinent legal situation. Regulation No 2670/81 is clearly one of the legal sources which are decisive for the charge on C sugar. 62. 75. Before the Court of First Instance, the appellant complained that three legal principles had been breached by the Commission. During its consideration of a possible derogation on grounds of equity, the Court of First Instance referred in paragraph 58 to a derogation from the imposition of the charge on C sugar for which explicit provision is made and infers from this that a derogation from the imposition was inadmissible in other cases. As the rules concerning derogation are set out in Regulation No 2670/81, that legal act naturally had to be cited. 63. 76. Similarly, the Court of First Instance referred to Regulation No 2670/81 in paragraph 62, in the context of the principle of legal certainty. Here again, the Court of First Instance was forced to cite a provision of that regulation as the legal source of the charge owed. 64. 77. It is not only a legally careful reading of the comments of the Court of First Instance that shows the arguments presented by the appellant in the first part of the third ground of appeal to be obviously unfounded. 65. 78. As regards the appellant’s complaint in the second part of the third ground of appeal that the Court of First Instance had not examined its third plea in law, the structure of the judgment and the proceedings before the Court of First Instance need to be considered. 66. 79. While the second plea in law before the Court of First Instance concerns only the principles of equality and equity, the third plea refers to the principles of legal certainty, equality and equity. 67. 80. The Court of First Instance examined all these principles. It discusses the principle of equality in paragraphs 59 to 61. It considers a possible derogation on grounds of equity in paragraphs 57 and 58. The principle of legal certainty, finally, is the subject of paragraph 62. 68. 81. Thus the Court of First Instance considers all three legal principles. The appellant’s difficulty in finding its pleas in law in the judgment may be partly due to the fact that they overlap to some extent. Moreover, to ensure a better understanding, the Judge-Rapporteur in the proceedings before the Court of First Instance had already structured the pleas in law more clearly in his report for the hearing. 69. 82. The third ground of appeal as a whole should thus be dismissed as unfounded. VIII – The fourth ground of appeal A – Admissibility 1. Arguments of the parties 70. 83. The Commission considers the fourth ground of appeal to be inadmissible. It contends that the first and second parts of the ground of appeal reproduce the pleas in law presented before the Court of First Instance and do not therefore satisfy the conditions for a statement of reasons pursuant to Article 58(1) of the Statute of the Court of Justice and Article 112(1), first paragraph, (c), of the Rules of Procedure of the Court of Justice. The third part of the fourth ground of appeal, concerning the difference in the treatment of Cosun and other producers of C sugar, was a new complaint, on which the Court of First Instance had been unable to comment. The fourth ground of appeal was therefore inadmissible. 71. 84. In reply to the claim that the fourth ground of appeal is a new argument, Cosun maintains that it has merely developed further the arguments put to the Court of First Instance. The fourth ground of appeal was therefore admissible. 2. Analysis a) The first and second parts of the fourth ground of appeal 72. 85. As regards the Commission’s objection that the first part of the fourth ground of appeal is inadmissible, it should be pointed out that in its application in the proceedings before the Court of First Instance the appellant complained both that the C sugar at issue had the status of an imported product and that the charge on C sugar formed part of the Community’s own resources. 73. 86. Accordingly, not only are the complaints not exactly backed by profound arguments, but above all they were already lodged before the Court of First Instance and are therefore inadmissible. 74. 87. As for the second part of the fourth ground of appeal, that is to say the line of argument based on the judgment in De Haan, (19) a comparison with the application reveals that the appellant essentially does no more than reproduce its arguments. It is not enough simply to assert that those arguments attack the judgment of the Court of First Instance. If, on the other hand, the arguments were to be described as exceeding what was stated in the application, they would have to be classified as new arguments and therefore as an inadmissible new pleading. 75. 88. The first and second parts of the fourth ground of appeal are therefore inadmissible. b) The third part of the fourth ground of appeal 76. 89. In the third part of the fourth ground of appeal, the appellant claims that the Court of First Instance omitted to consider the difference in the treatment of producers of C sugar like Cosun and other producers of C sugar. 77. 90. This is a line of argument which was not followed in this form before the Court of First Instance. The present appeal proceedings essentially concern the question whether a new line of argument or new arguments are to be regarded as new pleadings. 78. 91. In this context, it is necessary to begin by considering the Rules of Procedure of the Court of Justice itself. From this, it is evident that not all the language versions of the provisions of the Rules of Procedure relevant to appeals include the term ‘arguments’. Thus, unlike the French and Dutch versions, the German version of Article 112 confines itself to ‘grounds of appeal’, without making a separate reference to the related ‘arguments’. 79. 92. In addition, the French version of Article 117 of the Rules of Procedure concerning new arguments and of Article 112 thereof uses the term ‘moyen’, whereas the German and Dutch versions use entirely different terms, namely ‘Gesichtspunkt’ and ‘grond’, respectively. 80. 93. It is at least evident from the Rules of Procedure of the Court of Justice that procedural law does not depend solely on the ‘ground of appeal’ as used in the formal sense in Article 112. 81. 94. In this context, the settled case-law of the Court of Justice should first be recalled. According to this, Article 116 of the Rules of Procedure of the Court of Justice forbids new submissions in an appeal, unless they are based on legal or factual grounds which have come to light only during the proceedings. Otherwise, a party could bring before the Court of Justice a wider case than that heard by the Court of First Instance. (20) 82. 95. In an appeal, the jurisdiction of the Court of Justice is thus confined to review of the findings of law on the pleas argued at first instance. (21) 83. 96. As in Dansk Rørindustri and Others v Commission, where the appellant did not plead an infringement of the principle of the protection of legitimate expectations through the application of the guidelines, Cosun did not lodge with the Court of First Instance a complaint corresponding to the third part of the fourth ground of appeal. 84. 97. The inadmissibility of the appellant’s line of argument could also be inferred from the judgment of the Court of Justice in Atlanta v European Community, (22) according to which a submission which changes the very basis on which the Community could be held liable must be regarded as constituting a new plea in law. This is all the truer of the present case, in which Cosun refers to a different aspect of equal treatment in the appeal from that cited during the proceedings before the Court of First Instance. 85. 98. The Court of Justice has also described as new an argument in which a different interpretation is advanced with regard to the scope of the criterion for the examination of the subject of the appeal. (23) 86. 99. The restrictive attitude of the Court of Justice also becomes clear in the judgment in IPK-München and Commission, in which the Court dismissed a plea as new and therefore inadmissible because the Commission had advanced a certain argument only during the appeal proceedings. (24) 87. 100. What is decisive for the restrictive attitude adopted by the Court of Justice is whether the argument contains new elements (25) or whether it was merely the development of an argument which had already been raised. (26) The distinction between ‘plea’ and ‘argument’ at least does not go far enough in itself. (27) 88. 101. A similarly strict tendency can be inferred from the case-law of the Court of Justice when an argument is not put forward until the oral proceedings rather than in the written appeal. (28) 89. 102. Finally, here, too, it cannot be accepted that Cosun’s argument is merely the development of an argument already raised before the Court of First Instance within the meaning of the case-law of the Court of Justice. 90. 103. Consequently, it is a new argument, which, according to the case-law of the Court of Justice, cannot be taken into account in the appeal. It is therefore best compared to a separate complaint which is first raised during the appeal proceedings. (29) 91. 104. As the third part of the fourth ground of appeal is thus a plea which is inadmissible at the appeal stage, it must be regarded as inadmissible. IX – Costs 92. 105. Pursuant to Article 122 of its Rules of Procedure, the Court of Justice makes a decision as to costs where the appeal is well founded and the Court itself gives final judgment in the case. Pursuant to Article 69(2) of the Rules of Procedure, which, pursuant to Article 118 thereof, is applicable in appeal proceedings, the unsuccessful party is to be ordered to pay the costs if they have been applied for. As the Commission has applied for the appellant to be ordered to pay the costs and the appellant has been unsuccessful in its arguments, it must bear the costs. X – Conclusion 93. 106. In view of the foregoing, it is proposed that the Court of Justice should rule as follows: 1) 1. The appeal is dismissed. 2) 2. The appellant is ordered to pay the costs of the proceedings. 1 – Original language: German. 2 – See the parallel request for a preliminary ruling in Case C-248/04 Koninklijke Coöperatie Cosun [2006] ECR I-0000. 3 – Decision REM 19/01, C(2002) 1580. 4 – Case T-240/02 Koninklijke Coöperatie Cosun v Commission [2004] ECR II-4237. 5 – OJ 1981 L 177, p. 4. 6 – OJ 1981 L 262, p. 14. 7 – OJ 1988 L 346, p. 29. 8 – OJ 1991 L 336, p. 26. 9 – OJ 1979 L 175, p. 1, as amended by Council Regulation (EEC) No 3069/86 of 7 October 1986 (OJ 1986 L 286, p. 1). 10 – Koninklijke Coöperatie Cosun (cited in footnote 2). 11 – OJ 1992 L 302, p. 1. 12 – OJ 1993 L 253, p. 1. 13 – Case C-90/94 Haahr Petroleum [1997] ECR I-4085, paragraph 20, and Case C-213/96 Outokumpu [1998] ECR I-1777, paragraph 20. 14 – See no more than Case C-352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291, paragraph 35, Case C-76/01 P Eurocoton and Others v Council [2003] ECR I-10091, paragraph 47, and Case C-234/02 P European Ombudsman v Lamberts [2004] ECR I-2803, paragraph 77. 15 – Case C-286/04 P Eurocermex v OHIM [2005] ECR I-5797, paragraphs 50 and 51. 16 – Order in Case C-488/01 P Martinez v Parliament [2003] ECR I-13355, paragraph 39 and the case-law cited therein, and the judgments in Joined Cases C-199/01 P and C-200/01 P IPK-München andCommission [2004] ECR I‑4627, paragraph 50, Case C‑254/03 P Eduardo Vieira v Commission [2005] ECR I‑237, paragraph 32, and Case C-208/03 P Le Pen v Parliament [2005] ECR I-6051, paragraph 40. 17 – IPK-München andCommission (cited in footnote 16), paragraph 51, Eduardo Vieira v Commission (cited in footnote 16), paragraph 34, and Le Pen v Parliament (cited in footnote 16), paragraph 41. 18 – Regulation of the Commission of 28 December 1970 on the provisions applicable to sugar produced in excess of the maximum quota (OJ, English Special Edition 1970 (III), p. 957). 19 – Case C-61/98 [1999] ECR I-5003. 20 – Case C-153/96 P De Rijk v Commission [1997] ECR I‑2901, paragraph 18, Case C-64/98 P Petrides v Commission [1999] ECR I‑5187, paragraph 18, Case C-458/98 P Industrie des poudres sphériques v Council and Commission [2000] ECR I‑8147, paragraph 74, and Joined Cases C-280/99 P to C-282/99 P Moccia Irmeand Others v Commission [2001] ECR I‑4717, paragraph 67. 21 – Joined Cases C-183/02 P and C-187/02 P Demesa and Territorio Histórico de Álava v Commission [2004] ECR I‑10609, paragraph 59, Joined Cases C-186/02 P and C-188/02 P Ramondín and Others v Commission [2004] ECR I‑10653, paragraph 60, Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I‑5425, paragraph 165, and Industrie des poudres sphériques v Council and Commission (cited in footnote 20), paragraph 74. See Case C-136/92 P Commission v Brazzelli Lualdi and Others [1994] ECR I‑1981, paragraph 59, Case C-7/95 P JohnDeere v Commission [1998] ECR I‑3111, paragraph 62, and Case C-217/01 P Hendrickx v Cedefop [2003] ECR I‑3701, paragraph 37. 22 – Case C-104/97 P [1999] ECR I‑6983, paragraph 27. 23 – Demesa and Territorio Histórico de Álava v Commission (cited in footnote 21), paragraphs 59 to 64, and Ramondín and Others v Commission (cited in footnote 21), paragraphs 60 to 65. 24 – IPK-München and Commission (cited in footnote 16), paragraph 55 et seq. 25 – Case C-450/98 P IECC v Commission [2001] ECR I‑3947, paragraph 36. 26 – Case C-76/93 P Scaramuzza v Commission [1994] ECR I‑5173, paragraph 18. 27 – See Moccia Irmeand Others v Commission (cited in footnote 20), paragraph 64 et seq. See, on the other hand, the Opinion of Advocate General Léger in Case C-41/00 P Interporc v Commission [2003] ECR I‑2125, point 55 et seq. 28 – Case C-37/03 P BioID v OHIM [2005] ECR I-7975, paragraph 56 et seq. 29 – For its inadmissibility, see Petrides v Commission (cited in footnote 20), paragraph 18.

ADARSH KUMAR GOEL, J. The appellants have called in question the order dated 6th July, 2009 of the High Court of Judicature, Allahabad, Bench at Lucknow in Criminal Miscellaneous Case No.2428 of 2009. Thereby, the High Court declined to interfere with the order of summoning and to quash the companyplaint dated 3rd May, 2008 registered as Criminal Complaint Case No.1066 of 2008 under Section 307 of the Indian Penal Code, P.S. Atrauli, District Hardoi, pending in the Court of Judicial Magistrate-II, Hardoi. According to the appellants, the companyplaint and the proceedings were gross abuse of process of the Court having been filed after gross delay of 16 years after the incident. The incident in question took place on 11th February, 1992. In respect of the said incident, there were two cross cases being Crime Case No.37/92 under Section 307 IPC registered against the appellants, and Crime Case No.37A/92 under Section 307 IPC registered at the instance of the appellants at Police Station Atrauli, District Hardoi. The investigating Agency charge sheeted respondent No.2, which gave rise to Session Trial Case No.760 of 1995. After trial, respondent No.2 and three others were companyvicted under Section 307/34 IPC and sentenced to undergo rigorous imprisonment for seven years and to pay a fine of Rs.5,000/- each vide judgment dated 23rd September, 2009 by Additional Sessions Judge F.T.C.-I, Hardoi. However, an appeal against the said judgment is said to be pending. Respondent No.2, in his statement under Section 313 Cr.P.C. stated that he had also lodged a cross case. He also led defence evidence in support of the cross version. Having regard to the nature of injuries received on the side of the appellants and other evidence, version of the appellants was accepted and respondent No.2 and two others were companyvicted. What is significant and undisputed is the fact that though respondent No.2 had registered Crime Case No.37/92 on 11th February, 1992 against the appellants and numberaction was taken thereon, he kept quiet till 11th August, 2005. Meanwhile, respondent No.2 and other companyaccused were charge sheeted on 21st January, 1993 and session trial companymenced against them in the year 1995. It was only on 11th August, 2005 that respondent No.2 filed an application for summoning progress report of Crime Case No.37/1992, so that the cross case against the appellants companyld also be tried along with the trial against respondent No.2. Case of respondent No.2 is that numberorder was passed on the application but it was only on 1st February, 2008 that respondent No.2 filed another application. There is numberhing to show if any other step was taken by respondent No.2 except on 11th August, 2005 and 1st February, 2008. Application filed on 1st February, 2008 was disposed of on 20th February, 2008 in view of the report of the police that the appellants were exonerated during investigation and the report was filed before the Court. On 3rd May, 2008, respondent No.2 filed the impugned companyplaint alleging that the appellants had companymitted offence under Section 307 IPC on 11th February, 1992. The said companyplaint led to summoning of the appellants vide order dated 3rd June, 2009 which was impugned before the High Court. The High Court dismissed the petition filed by the appellants for quashing on the ground that allegation in the companyplaint and preliminary evidence led in support thereof made out a case for summoning and thus numbercase for quashing was made out. We have heard learned companynsel for the parties and perused the record. While issuing numberice on 23rd November, 2009 further proceeding in Criminal Case No.1066 of 2008 pending in the Court of Judicial Magistrate- II, Hardoi was stayed and the said order has been operative till date. Main companytention raised on behalf of the appellants is that the impugned companyplaint has been filed 16 years after the incident and for 13 and a half years after the incident, respondent No2 did number persue the matter. It is thus submitted that since the companyplainant kept quiet for 13 years after the incident and the companyplaint has been filed after 16 years, respondent No.2 having been companyvicted in the cross case, the prosecution of the appellants at this stage will be unfair and futile. On the other hand, respondent No.2-complainant submitted that bar of limitation does number apply beyond the statutory bar under Section 468 Cr.P.C. A crime never dies. A criminal offence is a wrong against the society even though companymitted against an individual and thus the prosecution cannot be thrown out merely on the ground of delay. In support of this submission, reliance has been placed in Japani Sahoo vs. Chandra Sekhar Mohanty1. In response to this stand of the companyplainant, learned companynsel for the accused submitted that even if it is assumed that the appellants had caused the injury in question, the nature of injury, in the circumstances can at best fall under Section 324 IPC in which case bar under Section 468 Cr.P.C. is applicable. In any case, even cases number companyered by statutory bar of limitation companyld be held to be liable to be quashed on the ground of violation of right of speedy trial under Article21 of the Constitution. We have given due companysideration to the rival submissions. The question whether the proceedings in criminal cases number companyered by Section 468 Cr.P.C. companyld be quashed on the ground of delay has been gone into in several decisions. While it is true that cases companyered by statutory bar of limitation may be liable to be quashed without any further enquiry, cases number companyered by the statutory bar can be quashed on the ground of delay in filing of a criminal companyplaint in appropriate cases. In such cases, the question for companysideration is whether there is violation of right of speedy trial which has been held to be part of Article 21 of the Constitution having regard to the nature of offence, extent of delay, person responsible for delay and other attending circumstances. In this regard, observations in judgments of this Court may be referred to. In Japani Sahoo supra , it was observed At the same time, however, ground reality also cannot be ignored. Mere delay may number bar the right of the Crown in prosecuting criminals. But it also cannot be overlooked that numberperson can be kept under companytinuous apprehension that he can be prosecuted at any time for any crime irrespective of the nature or seriousness of the offence. People will have numberpeace of mind if there is numberperiod of limitation even for petty offences. In Vakil Prasad Singh vs. State of Bihar2, it was observed Time and again this Court has emphasised the need for speedy investigations and trial as both are mandated by the letter and spirit of the provisions of CrPC in particular, Sections 197, 173, 309, 437 6 and 468, etc. and the companystitutional protection enshrined in Article 21 of the Constitution. Inspired by the broad sweep and companytent of Article 21 as interpreted by a seven-Judge Bench of this Court in Maneka Gandhi v. Union of India 1978 1 SCC 248 and in Hussainara Khatoon 1 v. State of Bihar 1980 1 SCC 81 this Court had observed that Article 21 companyfers a fundamental right on every person number to be deprived of his life or liberty except according to procedure established by law that such procedure is number some semblance of a procedure but the procedure should be reasonable, fair and just and therefrom flows, without doubt, the right to speedy trial. It was also observed that Hussainara Khatoon 1 case, SCC p. 89, para 5. No procedure which does number ensure a reasonably quick trial can be regarded as reasonable, fair or just and it would fall foul of Article 21. The Court clarified that speedy trial means reasonably expeditious trial which is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21. The exposition of Article 21 in Hussainara Khatoon 1 case was exhaustively companysidered afresh by the Constitution Bench in Abdul Rehman Antulay v. R.S. Nayak 1992 1 SCC 225. Referring to a number of decisions of this Court and the American precedents on the Sixth Amendment of their Constitution, making the right to a speedy and public trial a companystitutional guarantee, the Court formulated as many as eleven propositions with a numbere of caution that these were number exhaustive and were meant only to serve as guidelines. xxxxxx Speaking for the majority in P. Ramachandra Rao 2002 4 SCC 578, R.C. Lahoti, J. as His Lordship then was while affirming that the dictum in R. Antulay case as companyrect and the one which still holds the field and the propositions emerging from Article 21 of the Constitution and expounding the right to speedy trial laid down as guidelines in the said case adequately take care of the right to speedy trial, it was held that Ramachandra case, SCC p. 603, para 29 3 guidelines laid down in A.R. Antulay case are number exhaustive but only illustrative. They are number intended to operate as hard-and-fast rules or to be applied as a straitjacket formula. Their applicability would depend on the fact situation of each case as it is difficult to foresee all situations and numbergeneralisation can be made. It has also been held that P. Ramachandra case, SCC p. 603, para 29 It is neither advisable, number feasible, number judicially permissible to draw or prescribe an outer limit for companyclusion of all criminal proceedings. Nonetheless, 5 the criminal companyrts should exercise their available powers, such as those under Sections 309, 311 and 258 CrPC to effectuate the right to speedy trial. In appropriate cases, jurisdiction of the High Court under Section 482 CrPC and Articles 226 and 227 of the Constitution can be invoked seeking appropriate relief or suitable directions. emphasis added The outer limits or power of limitation expounded in the aforenoted judgments were held to be number in companysonance with the legislative intent. It is, therefore, well settled that the right to speedy trial in all criminal persecutions sic prosecutions is an inalienable right under Article 21 of the Constitution. This right is applicable number only to the actual proceedings in companyrt but also includes within its sweep the preceding police investigations as well. The right to speedy trial extends equally to all criminal prosecutions and is number companyfined to any particular category of cases. In every case, where the right to speedy trial is alleged to have been infringed, the companyrt has to perform the balancing act upon taking into companysideration all the attendant circumstances, enumerated above, and determine in each case whether the right to speedy trial has been denied in a given case. In Ranjan Dwivedi vs. CBI3, declining to quash proceedings even after 37 years of delay in companypletion of trial, it was observed The length of the delay is number sufficient in itself to warrant a finding that the accused was deprived of the right to a speedy trial. Rather, it is only one of the factors to be companysidered, and must be weighed against other factors. Moreover, among factors to be companysidered in determining whether the right to speedy trial of the accused is violated, the length of delay is least companyclusive. While there is authority that even very lengthy delays do number give rise to a per se companyclusion of violation of companystitutional rights, there is also authority that long enough delay companyld companystitute per se violation of the right to speedy trial. In our companysidered view, the delay tolerated varies with the piccomplexity of the case, the manner of proof as well as the gravity of the alleged crime. This, again, depends on case-to-case basis. There cannot be universal rule in this regard. It is a balancing process while determining as to whether the accuseds right to speedy trial has been violated or number. The length of delay in and itself, is number a weighty factor. In Sajjan Kumar vs. CBI4, even after 23 years of delay in companypletion of trial, proceedings were number quashed and it was observed In the case on hand, though delay may be a relevant ground, in the light of the materials which are available before the Court through CBI, without testing the same at the trial, the proceedings cannot be quashed merely on the ground of delay. As stated earlier, those materials have to be tested in the companytext of prejudice to the accused only at the trial. In NOIDA Entrepreneurs Assn. vs. NOIDA5, even delay of 17-18 years was held number to be adequate to stop criminal proceedings having regard to the gravity of offence, it was observed Thus, it is evident that question of delay in launching criminal prosecution may be a circumstance to be taken into companysideration in arriving at a final decision, but it cannot itself be a ground for dismissing the piccomplaint. More so, the issue of limitation has to be examined in the light of the gravity of the charge. xxxx In view of the above, we are of the companysidered opinion that these allegations being of a very serious nature and as alleged, Respondent 4 had passed orders in companyourable exercise of power favouring himself and certain companytractors, require investigation. Thus, in view of the above, we direct CBI to have preliminary enquiry and in case the allegations are found having some substance warranting further proceeding with criminal prosecution, may proceed in accordance with law. It may be pertinent to mention that any observation made herein against Respondent 4 would be treated necessary to decide the present companytroversy. CBI shall investigate the matter without being influenced by any observation made in this judgment. It is thus clear from the above observations that mere delay in companypletion of proceedings may number be by itself a ground to quash proceedings where offences are serious, but the Court having regard to the companyduct of the parties, nature of offence and the extent of delay in the facts and circumstances of a given case, quash the proceedings in exercise of jurisdiction under Section 482 Cr.P.C. in the interest of justice and to prevent abuse of process of the Court. In the present case, companyduct of the companyplainant can certainly be taken into account.

Judgment of the Court of 7 May 1991. - Commission of the European Communities v Kingdom of Belgium. - Equal treatment for men and women in matters of social security - Determination of the amount of unemployment benefit and invalidity allowances. - Case C-229/89. European Court reports 1991 Page I-02205 Summary Parties Grounds Decision on costs Operative part Keywords ++++ 1. Social policy - Equal treatment for men and women in matters of social security - Amount of unemployment and invalidity benefits taking account of family responsibilities and income of dependants - Permissibility - Conditions (Council Directive 79/7, Art. 4(1)) Summary 1. Article 4(1) of Directive 79/7/EEC must be interpreted as meaning that a system of unemployment or invalidity benefits under which the amount of benefit is determined by taking into account both the existence of persons dependent on the beneficiary and any income received by such persons is in conformity with that provision when that system seeks to secure for families a minimum replacement income, and grants to persons cohabiting with a spouse or children without income increases not exceeding the amount of the burdens which may reasonably be imputed to the presence of those persons. 2. Since such a system corresponds to a legitimate objective of social policy and the means deployed to that end are appropriate and necessary, it is justified by reasons unrelated to discrimination on grounds of sex. Parties In Case C-229/89, Commission of the European Communities, represented by Marie Wolfcarius, a member of its Legal Service, acting as Agent, assisted by Francis Herbert, of the Brussels Bar, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of its Legal Service, Wagner Centre, Kirchberg, applicant, v Kingdom of Belgium, represented by Robert Hoebaer, Director of Administration in the Ministry for Foreign Affairs, External Trade and Development Cooperation, acting as Agent, assisted by C. Deneve, Director of Administrative Affairs at the Ministry of Employment and Labour, and M. Loix, Assistant Adviser at the Ministry of Social Security, with an address for service in Luxembourg at the Belgian Embassy, 4 Rue des Girondins, defendant, APPLICATION for a declaration that the conditions governing the determination of the amount of unemployment benefits and invalidity allowances are incompatible with Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (Official Journal 1979 L 6, p. 24), THE COURT, composed of: O. Due, President, G.F. Mancini, T.F. O' Higgins, J.C. Moitinho de Almeida, G.C. Rodríguez Iglesias and M. Díez de Velasco, Presidents of Chambers, Sir Gordon Slynn, C.N. Kakouris, R. Joliet, F.A. Schockweiler, F. Grévisse, M. Zuleeg and P.J.G. Kapteyn, Judges, Advocate General: M. Darmon, Registrar: J.A. Pompe, Deputy Registrar, having regard to the Report for the Hearing, after hearing oral argument from the parties at the hearing on 17 October 1990, after hearing the Opinion of the Advocate General at the sitting on 20 November 1990, gives the following Judgment Grounds 1 By application lodged at the Court Registry on 18 July 1989, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by failing to adopt within the period prescribed in Article 8(1) of Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (Official Journal 1979 L 6, p. 24) all the measures necessary for the complete and correct application of the directive and, in particular, by maintaining in force up to the present date a system for calculating unemployment benefits and invalidity allowances resulting in objectively unjustified indirect discrimination against women, the Kingdom of Belgium has failed to fulfil its obligations under the Treaty. 2 The Belgian schemes mentioned in the application were laid down respectively by Royal Decree of 8 August 1986 (Moniteur Belge, 27 August 1986, p. 11825, amending Article 160 of the Royal Decree of 20 December 1963) and by Royal Decree of 30 July 1986 (Moniteur Belge, 2 August 1986, p. 10854, amending the second paragraph of Article 226 and Article 227(1) of the Royal Decree of 4 November 1963). 3 Under the terms of Article 4(1) of Directive 79/7/EEC the principle of equal treatment "means that there shall be no discrimination whatsoever on grounds of sex either directly, or indirectly by reference in particular to matrimonial or family status, in particular as concerns (...) the calculation of benefits including increases due in respect of a spouse and for dependants and the conditions governing the duration and retention of entitlement to benefit." 4 Under Article 8(1) of that directive, the Member States were to adopt the measures necessary to comply with those provisions within six years of its notification, that is by 22 December 1984 at the latest. 5 The Belgian provisions on unemployment benefit, which have remained in force after that date, accorded, in so far as the calculation of such benefit is concerned, preferential treatment to unemployed persons who in their capacity as head of household had as a dependant a spouse, a person with whom they were cohabiting, a parent or a child without income. The Commission took the view that this category was predominantly made up of men, and on 2 June 1986 issued a reasoned opinion under Article 169 of the Treaty in which it stated that the Kingdom of Belgium was failing to fulfil its obligations by maintaining a system for calculating unemployment benefits which resulted in objectively unjustified indirect discrimination against women, the latter for the most part falling within the two other categories of unemployed persons laid down in the Belgian rules, namely the "single" persons' category, that is to say unemployed persons residing alone, and the category of persons residing with a spouse, a cohabiting partner, or a child with earned or replacement income. 6 Following that reasoned opinion, the rules complained of were amended by Royal Decree of 8 August 1986, mentioned above, and by the Ministerial Decree of 23 January 1987 (Moniteur Belge of 11 February 1987, p. 1817). The scheme of allowances is based on the division of beneficiaries into three groups: - a worker residing with a married or cohabiting partner, parent or child with no earned or replacement income (group 1); - a worker residing alone (group 2); - a worker cohabiting with a person with earned or replacement income (group 3). 7 The amount of the allowances under that scheme is calculated on the basis of the previous salary, subject to a ceiling and on the basis of different rates according to group. In the first instance all persons concerned receive a basic allowance of 35% of their previous salary. However, after 18 months of unemployment extended by three months for each year of previous employment, persons belonging to group 3 receive a flat-rate allowance together with a supplement if the total monthly allowances of persons residing with them are below a certain amount. Secondly, persons in groups 1 and 2 receive an additional 5% of previous income for loss of single income. Thirdly, an adaptation supplement fixed at 20% of previous income is paid to all recipients of allowances but is limited to the first year of unemployment for persons in groups 2 and 3. 8 With regard to invalidity insurance, the scheme introduced by the Royal Decree of 30 July 1986 follows the same principles as those underlying the unemployment insurance scheme as regards both the division of the recipients of allowances into three groups and the system of calculating the allowance whose amount is proportionate to previous income subject to a ceiling. That amount represents 65% of that income for group 1, 45% for group 2, and 40% for group 3. 9 The Commission considers, on the one hand, that the new provisions essentially resulted in a change in the designation of two of the three categories of unemployed persons, such that, apart from the category of "single" unemployed persons whose designation remains unaltered, the categories "head of household" and "cohabiting partners" correspond to the abovementioned groups 1 and 3 respectively. 10 The Commission claims, on the other hand, that the Belgian rules maintain in force a system of unemployment allowances similar to the previous one and that they extend the method of calculation to the invalidity assurance scheme. In its view the rate of unemployment benefit and of invalidity allowances favours group 1 and, consequently, gives rise to discrimination between men, who predominate in that group, and women, who constitute the majority in group 3. That discrimination runs counter to Article 4(1) of Council Directive 79/7. 11 In its reasoned opinions of 2 June 1986 and 20 June 1988, and then in its application, the Commission points to the existence of discrimination in favour of men on account of the more favourable treatment received by members of group 1. On the other hand, it does not challenge the difference in treatment as between group 2 and group 3 beneficiaries resulting from the 5% increase in previous income for loss of single income which is granted exclusively to unemployed persons in groups 1 and 2. 12 Reference is made to the Report for the Hearing for a fuller account of the provisions of the applicable national legislation, the amounts of benefit and allowances, the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. 13 It should be recalled at the outset that in accordance with settled case-law, Article 4(1) of Directive 79/7 precludes less favourable treatment from being accorded to a social group when it is shown to be made up of a much greater number of persons of one or the other sex, unless the provision in question is "based on objectively justified factors unrelated to any discrimination on grounds of sex" (judgment in Case C-33/89 Kowalska [1990] ECR I-2591, paragraph 16). 14 It should also be pointed out that the Court has specifically held that a system of benefits providing for supplements not directly based on the sex of the beneficiaries but taking account of their marital status or family situation, in respect of which it emerges that a considerably smaller proportion of women than of men are entitled to such supplements, is contrary to Article 4(1) of the directive if that system of benefits cannot be justified by reasons which exclude discrimination on grounds of sex (judgment in Case 30/85, Teuling v Bedrijfivereniging voor de Chemische Industrie [1987] ECR 2497, paragraph 13). 15 The documents before the Court show that, according to the statistics provided by the Belgian Government, male unemployed persons or invalids are appreciably more numerous in group 1, and that, conversely, women make up the majority of persons falling within group 3. 16 In such circumstances a system of unemployment and invalidity benefits linked respectively to family responsibilities in some cases and the existence of a spouse' s income in others would be contrary to Article 4(1) of the directive, if the Belgian Government could not justify it on grounds other than discrimination based on sex. 17 According to the Belgian Government, the difference in incidence as between men and women in the three categories of beneficiaries reflects a social phenomenon, namely the fact that there are fewer women than men in the working population. 18 It is, however, not possible to obtain from considerations of that kind, based on the unequal situation of men and women in the Belgian working population, objective criteria unrelated to any discrimination on grounds of sex. 19 On the other hand, if the Kingdom of Belgium can show that the means chosen meet a necessary aim of its social policy and that they are suitable and requisite for attaining that aim, the mere fact that the system of allowances favours a much greater number of male workers cannot be regarded as an infringement of the principle of equal treatment (judgment in Case 171/88 Rinner-Kuehn [1989] ECR 2743, paragraph 14). 20 The Kingdom of Belgium contends in that connection that its national system seeks to grant to each individual, within the limits necessarily imposed by budgetary resources and without limitation as to time, a minimum replacement income, having regard to the family situation of the claimant, who may be faced with supplementary needs because he had dependants or, on the other hand, may benefit from a spouse' s income. 21 The grant of such an income forms an integral part of the social policy of the Member States. 22 The aim of the Belgian legislation is to take into consideration the existence of different needs. On the one hand, it recognizes the greater burdens resulting from unemployment for households with only one income and, on the other hand, it takes into account the financial aid which the spouse' s income represents for the unemployed person. Moreover, it seeks to encourage the persons concerned to adapt themselves to their new financial situation by avoiding too sudden a drop in their income during the first year, whilst enabling the unemployed person with dependants to bear the expenses of a household beyond a period of 18 months. Those principles and objectives form part of a social policy which in the current state of Community law is a matter for the Member States which enjoy a reasonable margin of discretion as regards both the nature of the protective measures and the detailed arrangements for their implementation (judgment in Hofmann v Barmer Ersatzkasse [1984] ECR 3047, paragraph 27). 23 The ceiling applied in taking into account previous income and the existence of a maximum amount of benefit which may be granted, the determination of a flat-rate allowance for members of group 3 after a certain period of unemployment and the grant of a supplement if the total monthly allowances of cohabiting persons in group 3 do not reach a level corresponding to the maximum amount paid to group 1 beneficiaries, constitute elements which, amongst others, are intended to give to the replacement income introduced in Belgium the character of a guaranteed social minimum for families. It is clear from the documents before the Court that the increases granted to persons cohabiting with a spouse or children without income do not exceed the amount of the charges which may reasonably be imputed to the presence of those persons. 24 With regard to a guaranteed minimum subsistence level, the Court has already held that Community law does not preclude a Member State, in controlling its social expenditure, from taking into account the relatively greater needs of beneficiaries who have a dependent spouse or a dependent child or receive only a very small income, in relation to the needs of single persons. In fact, the Court held that Directive 79/7 did not preclude legislation under which the guarantee previously applicable to all workers suffering from an incapacity for work whose income was approximately equal to the statutory minimum wage that their (net) benefits would be at least equal to the (net) statutory minimum wage is restricted to persons having a dependent spouse or child or whose spouse has a very small income (judgment in Teuling cited above, paragraphs 22 and 23). 25 Accordingly, if for reasons of social policy a Member State may exclude single workers from receipt of a benefit, it may, a fortiori, reduce the allowance paid to them on the ground that there is no dependent person. 26 It follows from all the foregoing considerations that the Belgian Government has shown that its system of unemployment and invalidity benefits corresponds to a legitimate objective of social policy, involving increases suitable and requisite for attaining that aim; it is therefore justified by reasons unrelated to discrimination on grounds of sex. 27 It follows that the Commission' s application is unfounded and must therefore be dismissed. Decision on costs Costs 28 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the applicant has failed in its pleas, it must be ordered to pay the costs. Operative part On those grounds, THE COURT hereby: 1. Dismisses the Commission' s application; 2. Orders the Commission to pay the costs.

SECOND SECTION CASE OF CINDRIĆ AND BEŠLIĆ v. CROATIA (Application no. 72152/13) JUDGMENT STRASBOURG 6 September 2016 FINAL 30/01/2017 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Cindrić and Bešlić v. Croatia, The European Court of Human Rights (Second Section), sitting as a Chamber composed of: Işıl Karakaş, President,Julia Laffranque,Paul Lemmens,Valeriu Griţco,Ksenija Turković,Stéphanie Mourou-Vikström,Georges Ravarani, judges,and Hasan Bakırcı, Deputy Section Registrar, Having deliberated in private on 5 July 2016, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 72152/13) against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by two Croatian nationals, Mr Alojz Cindrić and Ms Katarina Bešlić (“the applicants”), on 5 November 2013. 2. The applicants were represented by Ms L. Kušan, a lawyer practising in Ivanić Grad and Ms Nataša Owens, a lawyer practising in Zagreb. The Croatian Government (“the Government”) were represented by their Agent, Ms Š. Stažnik. 3. The applicants alleged, in particular, that the procedural obligations under Articles 2 and 14 of the Convention had not been complied with; that, contrary to Article 13 of the Convention, they had no effective remedy in that respect; that they had been deprived of their right of access to a court contrary to Article 6 § 1 of the Convention; and that their right to peaceful enjoyment of their possessions protected under Article 1 of Protocol No. 1 to the Convention had also been violated. 4. On 16 December 2013 the Government were given notice of the application. 5. The President of the Chamber acceded to a request by the Government to grant confidentiality to the case (Rule 33 § 1 of the Rules of Court). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 6. The applicants were born in 1973 and 1975 respectively and live in P. A. Background to the case 7. The applicants lived with their parents in A, Croatia. In August 1991 the first applicant joined the Croatian Army and left his home, and in November 1991 the second applicant went to live in Germany. 8. In the second half of November 1991 the Yugoslav People’s Army, together with Serbian paramilitary forces, gained control of A, which thus became a part of the “Serbian Autonomous Region of Krajina” (hereinafter “the Krajina”). 9. On 6 January 1992 two unknown men took the applicants’ parents, S.C. and P.C., from their home in A. On 7 January 1992 the bodies of the applicants’ parents were driven by municipal employees in a truck to the front of their house. The applicants’ uncle was called and he gave the municipal employees clothes for the burial of the applicants’ parents. B. Investigation carried out by the authorities of the “Serbian Autonomous Region of Krajina” 10. On 7 January 1992 the A police carried out a search of a flat occupied by X in A and found an automatic gun, a hand gun and some bullets. 11. On 7 January 1992 the A police interviewed police officers R.B., M.S., D.J., V.K., M.T., D.K. and M.M. The police officers, apart from R.B., had been on duty at a checkpoint in R. Street in A between 7 p.m. on 6 January 1992 and 7 a.m. on 7 January 1992. 12. R.B. said that on 6 January 1992 at about 7 p.m. police officer X had asked him, R.B., as his hierarchical superior, for permission to take a short leave of absence. He, R.B., had granted the request. R.B. did not know when X had returned to duty at the police station, but thought that he had seen him between 11 p.m. and midnight that same evening. 13. M.S. said that at about 8 p.m. on 6 January 1992 a vehicle had approached the checkpoint and D.J. had stopped it. At that time he, M.S., had been in the barracks. D.J. and D.K. had entered and asked him if he knew a police officer with a birthmark on his face or a Volkswagen vehicle with the number 44 as the last digits on its registration plates, which he did not. At about 10 p.m. the same day, however, he stopped a Volkswagen vehicle which had 44 as the last two digits on its registration plates. The vehicle was driven by police officer X, who was known personally to M.S., D.J. and D.K. confirmed that it was the same vehicle which had passed from the opposite direction at about 8 p.m. 14. D.J. said that at about 8.10 p.m. on 6 January 1992 a vehicle of Volkswagen make had approached the checkpoint and that he had stopped it. The driver had been dressed in the uniform of the civil police. D.J.’s attention had been diverted by a vehicle which had come from the opposite direction and he had stopped it. At that moment the Volkswagen had suddenly started up and left in the direction of K. D.K. told him that he had not had the time to fully examine the vehicle but that he had seen that the driver and the person in the front passenger seat were dressed in the uniforms of the civil police. He had also seen two civilians in the back seat, a man and a woman. D.K. noted down the registration number of that vehicle. At about 11 p.m. the same day police officer M.S. stopped a vehicle which had arrived from the direction of K and asked the other police officers on duty whether it was the same vehicle they had stopped at about 8 p.m., which D.J. confirmed. The only occupants were the driver and the person in the front passenger seat. D.J. asked them who the other passengers had been and where they had taken them. The driver said that the passengers had been S.C. and P.C. and that they had left them in a village. 15. M.T. and D.K. confirmed the above events. 16. On 8 January 1992 the A police interviewed X and Y, two police officers. They both admitted that on 6 January 1992 they had taken S.C. and P.C. in X’s vehicle. On the outskirts of A the police had stopped them. However, the attention of the police had been diverted by another vehicle and X and Y had quickly driven away. They had taken S.C. and P.C. to the village of J. X said that there they had taken S.C. and P.C. out of the vehicle and started walking. He had been carrying an automatic gun and at one point S.C. had attempted to take it from him, resulting in a commotion in which the weapon had fired and killed S.C. After that Y had shot and killed P.C. Y said that X had killed S.C. when they had arrived in J and then forced him, Y, to kill P.C. 17. On 9 January 1992 the A police lodged a criminal complaint with the B public prosecutor against X and Y, alleging that on 6 January 1992 at 10.30 p.m. in J, a village near the town of A, they had killed S.C. and P.C. They had first driven the victims in X’s vehicle to J and taken them out of the vehicle. X had then killed S.C. with an automatic gun and Y had killed P.C. with a hand gun. 18. On 28 January 1992 the B County Court opened an investigation in respect of X and Y on suspicion of killing S.C. and P.C. 19. On 13 April 1992 an investigating judge of the B County Court commissioned a ballistics report. C. Investigation carried out by the Croatian authorities 20. In August 1995 the Croatian authorities regained control of the town of A. In 1996 the United Nations Security Council established the United Nations Transitional Administration in Eastern Slavonia, Baranja and Western Sirmium (“UNTAES”). On 15 January 1998 the UNTAES mandate came to an end and the transfer of power to the Croatian authorities began. 21. On 16 April 1996 the A police interviewed M.C., the brother of the late S.C., who told them that his brother and his brother’s wife had been killed on 6 January 1992. Their bodies had been given to him by the police of the “Serbian Autonomous Region of Krajina” and he had been allowed to bury them. 22. On 19 September 2000 the C police interviewed M.M., who said that on 6 January 1992 he had been on duty, together with M.B., at the entrance to village J. At about 9 p.m. he and M.M. had been walking towards a ramp by the barracks where all patrols had their meeting point and had heard a vehicle being driven, followed by several gun shots and then a vehicle starting up again. When they arrived at the meeting point they found Lj.Č., D.J. and M.P. there, who told them that “two fools [had] just brought two people in a car and killed them by the road.” None of the officers on patrol dared go to the crime scene. Soon they all went home. In the morning of 7 January 1992 the police from A came to M.M.’s house and took him to A police station, where they interviewed him and told him that X and his friend had killed S.C. and his wife. He had heard that X had moved to Bosnia and Herzegovina. 23. On 21 September 2000 the C police interviewed the applicants, who had learned from B.Ž., who lived with their parents during the relevant period, that X and Y had been charged with the killing of the applicants’ parents. 24. On 4 January 2001 an investigating judge of the C County Court (Županijski sud u C) ordered an investigation concerning X and Y, who were not available to the Croatian authorities, on suspicion of killing S.C. and P.C. An international arrest warrant was also issued against the suspects, who had absconded. D. Extradition proceedings concerning Y 25. On 8 February 2002 the Ministry of the Interior asked the Ministry of Justice whether extradition proceedings would be instituted against the suspects. 26. On 14 January 2005 Interpol in Washington informed the Croatian authorities that the Department of Homeland Security in Cleveland, Ohio, had a valid location for Y. On 19 January 2005 the Ministry of the Interior informed the Ministry of Justice, asking the latter to institute proceedings for Y’s extradition. On 20 January 2004 the Ministry of Justice asked the C County Court for the relevant documents with a view to seeking Y’s extradition from the United States authorities. All the evidence from the case file was translated into English and on 11 January 2006 the Ministry of Justice sent a “request for [Y’s] temporary arrest” to the US Department of Justice through diplomatic channels. 27. On 10 January 2007 the Ministry of Foreign Affairs informed the Ministry of Justice that the US Department of Justice had requested some additional documents. On 10 May 2007 the C County Court sent the requested information and documents to the Ministry of Justice. 28. It appears that on 12 and 13 February 2008 the Croatian and US authorities held consultations in Zagreb in connection with the extradition of Y. 29. On 8 April 2008 the C County State Attorney’s Office again asked the Ministry of Justice to seek Y’s extradition. On 17 June 2008 the Ministry of Justice sent additional documents to the US Department of Justice in connection with Y’s extradition. 30. In April 2009 the US Department of Homeland Security asked the Croatian Ministry of Justice for legal assistance in connection with the criminal investigation pending against Y in the United States on charges of attempted procurement of United States citizenship by fraud, and fraud and misuse of visas, permits and other official documents. They asked for all documents related to any criminal offences Y might have committed. This request was forwarded to the State Attorney’s Office on 7 January 2013. 31. On 26 March 2014 the State Attorney’s Office forwarded the requested documents, translated into English, to the US Department of Homeland Security. E. Proceedings in respect of X 32. In 2002 the Ministry of Justice agreed that an international arrest warrant should be issued in respect of X. 33. On 2 January 2008 an investigating judge of the C County Court asked the competent court in Serbia to hear evidence from X in connection with the killing of S.C. and P.C. On 28 July 2008 the Serbian authorities asked for a certified translation of that request and all relevant documents into the Serbian language. 34. On 13 August 2008 the Croatian Ministry of Justice sent a note to the Serbian Ministry of Justice to the effect that, according to an agreement between the two States, each State party had the right to communicate in its own language and to submit documents in that language without the need for translations. 35. On 18 February 2009 the Serbian authorities heard evidence from X. He said that the criminal proceedings against him and Y for the murder of S.C. and P.C. had been instituted in 1992 in the B Municipal Court and that they had been acquitted. He also denied any involvement in the killing of S.C. and P.C. On 3 March 2009 his statement was forwarded to the Croatian authorities. F. Civil proceedings for damages 36. On 16 March 2006 the applicants brought a civil action against the State in the C Municipal Court (Općinski sud u C), seeking non-pecuniary damages in the amount of 500,000 Croatian kuna (HRK) each (about 65,500 euros (EUR)), in connection with the killing of their parents. They relied on sections 1 and 2 of the 2003 Liability Act. 37. On 9 March 2007 the C Municipal Court granted the applicants’ claim and awarded them each HRK 300,000 (about EUR 40,000), finding that the killing of the applicants’ parents had been an act of terror. This judgment was reversed by the C County Court on 3 December 2009. The applicants were also ordered to pay the State HRK 52,500 (about EUR 6,800) in costs, comprising the fees chargeable for the State’s representation by the State Attorney’s Office. The relevant part of that judgment reads as follows: “The plaintiffs in the first-instance proceedings based their claim for damages on the provisions of the 2003 Liability Act .... It is necessary to point to the content of section 3 of that Act, which provides that the obligation to compensate for damage exists irrespective of whether the person responsible has been identified, criminally prosecuted or found guilty. However, having regard to the correct establishment of the facts by the first-instance court, which found that the events at issue had occurred on 7 January 1992 in the village of J, in the then occupied territory of the Republic of Croatia which at that time was under the control of illegal formations of the “Serbian Republic of Krajina” and outside the control of the Republic of Croatia and its lawful bodies, the appellant’s submission that [the killing of the plaintiffs’ parents] ... amounted to war-related damage is well-founded. Section 2 of the Act on the Assessment of War-related Damage ... provides that war-related damage is damage caused by enemy or illegal groups, or legal bodies of the Republic of Croatia, as well as accomplices of these groups and bodies, where that damage occurred directly or indirectly at the time specified in section 1 of that Act (from 15 August 1990 until the end of hostilities and war operations conducted against the Republic of Croatia). Therefore, given the nature, place and time of the events at issue (the killing of innocent civilians in the occupied territory of the Republic of Croatia during the Homeland war), it is to be concluded that the events at issue are to be legally classified as war-related damage and that the appellant is not responsible for them or for the damage thus caused. ...” 38. This judgment was upheld by the Supreme Court on 19 June 2012. The court endorsed the County Court’s finding that the killing of the applicants’ parents amounted to war-related damage and added, in so far as relevant, the following: “Even though the act giving rise to the plaintiffs’ claim for damages presents certain similarities with a terrorist act since [both] imply [an act of] violence, the act of damage [in the present case] differs significantly from terrorist acts in its features since it contains additional elements and amounts to war-related damage for which the defendant is not liable. This is because the damage did not occur in the territory under the de facto sovereignty of the Republic of Croatia but in the then occupied territory, where there was no possibility for lawful action by the bodies of the Republic of Croatia; this circumstance excludes the otherwise objective liability of the defendant. Furthermore, the act of damage in the present case was not carried out with the sole aim of seriously disturbing public order (this being the aim characteristic of an act of terror) but also involved the use of force, killing and expulsion of the civilian population on that territory with the aim of destroying the internal security and stability of the Republic of Croatia and preventing its lawful bodies from functioning. ...” 39. On 1 February 2013 the applicants lodged a constitutional complaint. They argued, inter alia, that in a number of its previous judgments the Supreme Court had recognised the plaintiffs’ right to compensation for damage caused by death during the Homeland War in Croatia, and cited seven judgments of that court adopted between 2006 and 2010 (see paragraph 52 below). The constitutional complaint was dismissed on 9 May 2013. II. RELEVANT LAW AND REPORTS A. Croatia 1. Constitution 40. Article 21 of the Constitution (Ustav Republike Hrvatske, Official Gazette nos. 56/1990, 135/1997, 8/1998, 113/2000, 124/2000 and 28/2001) reads as follows: “Every human being has the right to life. ...” 2. State Attorney’s Office 41. The report on the work of the State Attorney’s Office for the year 2012, submitted to Parliament in September 2013, stated that in the period between 1991 and 31 December 2012 there had been 13,749 reported victims of the war in Croatia, of whom 5,979 had been killed. By the time of the report the Croatian authorities had opened investigations in respect of 3,436 alleged perpetrators. There had been 557 convictions for war-related crimes. (a) Agreement on cooperation in respect of the prosecution of war crimes, crimes against humanity and genocide 42. On 13 October 2006 the War Crimes Prosecutor of the Republic of Serbia and the State Attorney of the Republic of Croatia concluded the above agreement (Sporazum o suradnji u progonu počinitelja kaznenih djela ratnih zločina, zločina protiv čovječnosti i genocida). It covers cooperation as regards evidence, information and documents. (b) The Civil Procedure Act (i) Relevant provisions 43. The relevant part of the Civil Procedure Act (Zakon o parničnom postupku, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 4/1977, 36/1977 (corrigendum), 36/1980, 69/1982, 58/1984, 74/1987, 57/1989, 20/1990, 27/1990 and 35/1991, and Official Gazette of the Republic of Croatia nos. 53/91, 91/92, 58/93, 112/99, 88/01, 117/03, 88/05, 02/07, 84/08, 123/08, 57/11 and 148/11) reads as follows: COSTS OF PROCEEDINGS Section 151 “(1) The costs of proceedings shall comprise disbursements made during, or in relation to, the proceedings. (2) The costs of proceedings shall also include a fee for the services of an advocate and other persons entitled to a fee by law.” Section 154 “(1) A party which loses a case completely shall reimburse the costs of the opposing party and his or her representative. (2) If a party succeeds in the proceedings in part, the court may, having regard to the degree to which it was successful, order that each party shall bear its own costs or that one party shall reimburse the corresponding portion of the costs of the other party and his or her representative. (3) The court may decide that one party shall reimburse in full the costs incurred by the opposing party and his or her representative, where the opposing party was unsuccessful in respect of only a relatively insignificant portion of his or her claim, and where no special costs were generated on account of that portion. ...” Section 155 “(1) In deciding which costs shall be reimbursed to a party, the court shall take into account only those costs which were necessary for the conduct of the proceedings. When deciding which costs were necessary and the amount thereof, the court shall carefully consider all the circumstances. (2) If there is a prescribed scale of advocates’ fees or other costs, the costs shall be awarded in accordance with that scale.” Section 156(1) “Regardless of the outcome of the case, a party shall reimburse the costs of the opposing party which he or she caused to be incurred through his or her own fault or as the result of an event that befell him or her [that is, by accident].” Section 162 “Where the State Attorney participates in the proceedings as a party, he or she shall be entitled to the reimbursement of costs under the provisions of this Act, but not to payment of a fee.” Section 163 “The provisions on costs [of proceedings] shall also be applicable to parties which are represented by the State Attorney’s Office. In that case the costs of the proceedings shall also include the amount that would be awarded to the party as advocates’ fees.” (c) The Scales of Advocates’ Fees and Reimbursement of their Costs 44. According to the Scales of Advocates’ Fees and Reimbursement of their Costs (Tarifa o nagradama i naknadi troškova za rad odvjetnika, Official Gazette nos. 91/2004, 37/2005 and 59/2007), an advocate’s fees in a civil case are, as a matter of principle, calculated in proportion to the value of the subject matter of the dispute (the amount in issue) for each procedural action. The value of the subject matter of the dispute normally corresponds to the sum the plaintiff is seeking to obtain through his or her civil action. (d) The Rules on Legal Aid Fees 45. The Rules on Legal Aid Fees (Pravilik o visini nagrade odvjetniku određenom za branitelja po službenoj dužnosti, Official Gazette no. 101/2012) were adopted by the Ministry of Justice and concern advocates’ fees reimbursed by the State. Rule 1 provides that advocates defending accused in criminal proceedings under the legal aid scheme are entitled only to 30% of their usual fee. (e) The Obligations Act 46. The relevant provision of the Obligations Act (Zakon o obveznim odnosima, Official Gazette of the Socialist Federal Republic of Yugoslavia nos. 29/1978, 39/1985 and 57/1989, and Official Gazette of the Republic of Croatia nos. 53/1991, 73/1991, 3/1994 – “the Obligations Act”), as in force before the 1996 Amendment, read as follows: Section 180 “Liability for loss caused by death or bodily injury or by damage or destruction of another’s property, resulting from acts of violence or terrorist acts ..., shall lie with the ... authority whose officers were under a duty, according to the laws in force, to prevent such loss.” (f) The 1996 Amendment to the Obligations Act 47. The relevant part of the 1996 Amendment to the Obligations Act (Zakon o izmjeni Zakona o obveznim odnosima, Official Gazette no. 7/1996 of 26 January 1996 – “the 1996 Amendment”), which entered into force on 3 February 1996, provided as follows: Section 1 “Section 180 of the Obligations Act (Official Gazette nos. 53/91, 73/91 and 3/94) is hereby repealed.” Section 2 “(1) Any proceedings for damages instituted under section 180 of the Obligations Act shall be stayed. (2) The proceedings referred to in paragraph 1 of this section shall be resumed after the enactment of special legislation which will regulate liability for damage resulting from terrorist acts.” (g) The 2003 Liability Act (i) Relevant provisions 48. The relevant parts of the Act on Liability for Damage Resulting from Terrorist Acts and Public Demonstrations (Zakon o odgovornosti za štetu nastalu uslijed terorističkih akata i javnih demonstracija, Official Gazette of the Republic of Croatia no. 117/2003 of 23 July 2003 – “the 2003 Liability Act”), which entered into force on 31 July 2003, provide as follows: Section 1 “(1) This Act regulates liability for damage caused by acts of terrorism or other acts of violence committed with the aim of seriously disturbing public order by provoking fear or stirring up feelings of insecurity in citizens ... (2) A terrorist act within the meaning of this Act is in particular an act of violence committed for political reasons with a view to stirring up fear, terror or feelings of personal insecurity in citizens.” Section 2 “The Republic of Croatia shall be liable for the damage referred to in section 1 of this Act on [the basis of] the principles of social solidarity, equal distribution of public burdens and fair and prompt compensation.” Section 3 “The obligation to compensate damage under this Act exists irrespective of whether the perpetrator has been identified, criminally prosecuted or found guilty.” Section 7(1) “The victim shall have the right to compensation [in the form of damages] for damage resulting from death, bodily injury or impairment of health.” Section 10 “Judicial proceedings for damages stayed pursuant to the 1996 Amendment shall be resumed in accordance with the provisions of this Act.” (ii) The Supreme Court’s case-law 49. In its judgments nos. Rev-348/05-2 of 31 January 2006, Rev-356/07-2 of 18 April 2007, Rev-1133/04-2 of 3 July 2007, Rev-130/08-2 of 10 December 2008, and Rev-104/08-2 of 7 January 2009 the Supreme Court found the State liable for damage caused by terrorist acts committed during the war in Croatia. The relevant parts of these judgments read as follows. Judgment no. Rev-348/05-2 of 31 January 2006: “It has been established that on ... in G.G. the claimants’ parents were killed ... That day between 8 p.m. and 10 p.m. unknown persons fired weapons and threw explosive devices at a large number of houses, with the result that serious material damage was caused and the claimants’ parents were killed in the ruins of their house. ... In the view of this court the events described above (the firing of weapons at houses and the throwing of explosive devices into a number of houses in the village by unknown persons) amount to a terrorist act within the meaning of the statutory provisions. The Republic of Croatia is liable for damage caused by terrorist acts on the basis of the principles of social solidarity, equal distribution of public burdens and fair and prompt compensation (section 2 of the [Liability] Act), and that liability exists irrespective of whether the perpetrator has been identified, criminally prosecuted or found guilty (section 3 of the [Liability] Act).” Judgment no. Rev-356/07-2 of 18 April 2007: “It is undisputed that ... J.B. and M.F. were found guilty of ... throwing an anti-tank mine into the house of the claimant’s parents. The mine exploded and caused serious bodily injuries to the claimant’s mother, from which she died, and serious bodily injuries to the claimant’s father, who survived. ... In the case at issue the liability of the State is objective – irrespective of [anyone’s] guilt. However, the State is not liable for failure to prevent the damage but on the basis of the principles of solidarity, fairness and equal distribution of public burdens (section 2 of the [Liability] Act).” Judgment no. Rev-130/08-2 of 10 December 2008: “Given that war-related damage and damage caused by a terrorist act both result from violence, it being one of the essential elements (so that there is a basic similarity in the nature of the act which is reduced to violence), [the question] whether a specific instance of damage is war-related damage or damage caused by a terrorist act [is to be answered] by assessing the act of violence in the broader context of the circumstances and the events during which such an act was committed; [the answer] will depend in particular on the means used, the motives, the damage caused, and the time and place of the events. ... The courts have established the following facts: - that the late D.J. ... was living alone in the family’s summer house in V. ... that ... a bomb thrown through a window of the house by an unknown person killed D.J., and that at that time there had been no war-related activity in the area of V. ... Given the above facts and the manner in which the deceased was killed, the lower courts correctly established that [the killing of D.J.] amounted to a terrorist act aimed at provoking fear and feelings of insecurity in citizens ...” Judgment no. Rev-104/08-2 of 7 January 2009: “The lower courts established that the late M.V. was injured while working in her garden by an explosive device that had been planted ... Given the circumstances of the damage, the conclusion of the lower courts that the damage was caused by a terrorist act is correct.” B. Serbia 1. War Crimes Act 2003 50. The War Crimes Act 2003 (Zakon o nadležnosti državnih organa u posutpku za ratne zločine, published in Official Gazette of the Republic of Serbia no. 67/2003, amendments published in Official Gazette nos. 135/04, 61/2005, 101/2007 and 104/2009) entered into force on 9 July 2003. The War Crimes Prosecutor, the War Crimes Police Unit and the War Crimes Sections within the Belgrade Higher Court and the Belgrade Court of Appeal were set up pursuant to this Act. They have jurisdiction over serious violations of international humanitarian law committed anywhere in the former Yugoslavia, regardless of the nationality of the victims or perpetrators. 2. Mutual Assistance in Criminal Matters Act 2009 51. The Mutual Assistance in Criminal Matters Act 2009 (published in Official Gazette of the Republic of Serbia no. 20/2009) entered into force on 27 March 2009. Under section 16 of this Act, Serbian citizens cannot be extradited. The Act repealed the corresponding provision of the 2001 Code of Criminal Procedure (published in Official Gazette of the Federal Republic of Yugoslavia no. 70/2001, amendments published in Official Gazette of the Federal Republic of Yugoslavia no. 68/2002 and Official Gazette of the Republic of Serbia nos. 58/2004, 85/2005, 115/2005, 49/2007, 20/2009 and 72/2009), which was in force between 28 March 2002 and 27 March 2009. THE LAW I. ALLEGED VIOLATION OF ARTICLE 2 OF THE CONVENTION 52. The applicants complained that the authorities had not taken appropriate and adequate steps to investigate the death of their parents and to bring the perpetrators to justice. They also claimed that their parents had been killed because of their Croatian ethnic origin and that the national authorities had failed to investigate that factor. The applicants further complained that they had no effective remedy at their disposal in respect of the alleged violation of Article 2 of the Convention. They relied on Articles 2, 13 and 14 of the Convention. The Court, being master of the characterisation to be given in law to the facts of the case, will examine this complaint under the procedural aspect of Article 2 of the Convention which, in so far as relevant, reads as follows: “1. Everyone’s right to life shall be protected by law. ...” A. Admissibility 1. The parties’ submissions 53. The Government argued that the applicants had not complied with the six-month time-limit since they had lodged their application with the Court almost twenty-two years after their parents had been killed and almost sixteen years after the Convention had entered into force in respect of Croatia. 54. They further maintained that the applicants had not exhausted all the relevant domestic remedies available to them because they had not lodged a complaint about the conduct of any of the State bodies such as the police or the State Attorney’s Office, nor had they lodged a criminal complaint against the persons who had conducted the investigation. As to protection against alleged unlawfulness in the conduct of the domestic authorities, the Government pointed out that the applicants could have sought damages from the State. 55. The applicants argued that they had complied with all the admissibility criteria. With regard to the six-month rule, they contended that at the time they had lodged their application with the Court the investigation into the killing of their parents had still been pending and the authorities had been taking steps in order to establish the relevant facts. 56. As to the exhaustion of domestic remedies, they maintained that the State authorities, once they had become aware of the killing of the applicants’ parents, had been under an obligation to conduct an official and effective investigation. 2. The Court’s assessment (a) Compliance with the six-month rule 57. The Court observes that in a number of cases concerning ongoing investigations into the deaths of applicants’ relatives it has examined the period of time from which the applicant could or should start doubting the effectiveness of a remedy and its bearing on the six-month time-limit provided for in Article 35 § 1 of the Convention (see Şükran Aydın and Others v. Turkey (dec.), no. 46231/99, 26 May 2005; Elsanova v. Russia (dec.) no. 57952/00, 15 November 2005; Narin v. Turkey, no. 18907/02, § 50, 15 December 2009; Grubić v. Croatia (dec.), no. 56094/12, §§ 30-41, 9 June 2015; Žarković v. Croatia (dec.), no. 75187/12, §§ 24-35, 9 June 2015; Damjanović v. Croatia (dec.), no. 5306/13, §§ 23-34, 25 August 2015; and Vuković and Others v. Croatia (dec.), no. 3430/13, §§ 23-34, 25 August 2015). The Court has found that in cases concerning instances of violent death, the ineffectiveness of the investigation will generally be more readily apparent than in cases of missing persons; the requirement of expedition may require an applicant to bring such a case to Strasbourg within a matter of months or at most, depending on the circumstances, just a few years after the events (see Varnava and Others v. Turkey [GC], nos. 16064/90 et al., § 158, ECHR 2009). 58. As can be seen from the case-law referred to above, the Court has refrained from indicating a specific period beyond which an investigation is deemed to have become ineffective for the purposes of assessing the date from which the six-month period starts to run (see Bogdanović v. Croatia (dec.), no.72254/11, § 43, 18 March 2014). The determination of whether the applicant in a given case has complied with the admissibility criteria will depend on the circumstances of the case and other factors such as the diligence and interest displayed by the applicant, as well as the adequacy of the investigation in question (see Narin, cited above, § 43). 59. As to the case in issue, the Court notes that the investigation into the death of the applicants’ parents by the Croatian authorities commenced in 1996 and is still pending. In 2014 the Croatian authorities were still corresponding with the United States authorities with a view to having one of the suspects extradited to Croatia. It cannot therefore be said that the six-month time-limit expired at any time during the period between 5 November 1997, when the Convention entered into force in respect of Croatia, and the date when the present application was lodged with the Court, on 5 November 2013. It follows that the applicants have complied with the six-month time-limit. (b) Exhaustion of domestic remedies 60. The Court has already addressed the same objections as regards the exhaustion of domestic remedies in other cases against Croatia and rejected them (see Jelić v. Croatia, no. 57856/11, §§ 59-67, 12 June 2014). The Court sees no reason to depart from that view in the present case. 61. It follows that the Government’s objection must be dismissed. (c) Conclusion as to admissibility 62. The Court notes that the complaint under the procedural aspect of Article 2 of the Convention is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible. B. Merits 1. The parties’ submissions 63. The applicants argued that the investigation into the killing of their parents had not been effective. They pointed in particular to a delay that had occurred between 1996 and 2000 and then again between May 2001 and January 2004. Furthermore, the Croatian authorities had not taken effective measures to have Y, a suspect, extradited from the United States to Croatia. 64. The Government contended that the national authorities had complied with their procedural obligation under Article 2 of the Convention. The applicants’ parents had been killed in territory outside the control of the Croatian authorities. Once those authorities had regained control over the territory, an investigation into the killing of the applicants’ parents had been launched. However, the evidence gathered by the authorities of the “Serbian Autonomous Region of Krajina” had been the result of police inquires which, under Croatian law, could not serve as valid evidence in criminal proceedings in Croatia. The Croatian authorities had taken all available steps in order to identify the perpetrators. However, the two suspects, X and Y, were unavailable to the Croatian authorities. 2. The Court’s assessment (a) General principles 65. The Court reiterates that Article 2 ranks as one of the most fundamental provisions in the Convention. It enshrines one of the basic values of the democratic societies making up the Council of Europe. The object and purpose of the Convention as an instrument for the protection of individual human beings require that Article 2 be interpreted and applied so as to make its safeguards practical and effective (see, among many other authorities, Anguelova v. Bulgaria, no. 38361/97, § 109, ECHR 2002‑IV). 66. The obligation to protect the right to life under Article 2 of the Convention, read in conjunction with the State’s general duty under Article 1 of the Convention to “secure to everyone within [its] jurisdiction the rights and freedoms defined in [the] Convention”, also requires by implication that there should be some form of effective official investigation when individuals have been killed as a result of the use of force (see, Armani Da Silva v. the United Kingdom [GC], no. 5878/08, § 230, 30 March 2016). 67. The State must therefore ensure, by all means at its disposal, an adequate response – judicial or otherwise – so that the legislative and administrative framework set up to protect the right to life is properly implemented and any breaches of that right are repressed and punished (see Armani Da Silva, cited above, § 230). 68. In order to be “effective” as this expression is to be understood in the context of Article 2 of the Convention, an investigation must firstly be adequate. This means that it must be capable of leading to the establishment of the facts, a determination of whether the force used was or was not justified in the circumstances and of identifying and – if appropriate – punishing those responsible. This is not an obligation of result, but of means. The authorities must take whatever reasonable steps they can to secure the evidence concerning the incident, including, inter alia, eyewitness testimony, forensic evidence and, where appropriate, an autopsy which provides a complete and accurate record of injury and an objective analysis of the clinical findings, including the cause of death. Moreover, where there has been a use of force by State agents, the investigation must also be effective in the sense that it is capable of leading to a determination of whether the force used was or was not justified in the circumstances. Any deficiency in the investigation which undermines its ability to establish the cause of death or the person responsible will risk falling foul of this standard (see Armani Da Silva, cited above, § 233). 69. In particular, the investigation’s conclusions must be based on thorough, objective and impartial analysis of all relevant elements. Failing to follow an obvious line of inquiry undermines to a decisive extent the investigation’s ability to establish the circumstances of the case and the identity of those responsible. Nevertheless, the nature and degree of scrutiny which satisfy the minimum threshold of the investigation’s effectiveness depend on the circumstances of the particular case. The nature and degree of scrutiny must be assessed on the basis of all relevant facts and with regard to the practical realities of investigation work. Where a suspicious death has been inflicted at the hands of a State agent, particularly stringent scrutiny must be applied by the relevant domestic authorities to the ensuing investigation (see Armani Da Silva, cited above, § 234). 70. A requirement of promptness and reasonable expedition is implicit in this context (see Yaşa v. Turkey, 2 September 1998, §§ 102-104, Reports 1998-VI; and Mahmut Kaya v. Turkey, no. 22535/93, §§ 106-107, ECHR 2003-III). It must be accepted that there may be obstacles or difficulties which prevent progress in an investigation in a particular situation. However, a prompt response by the authorities in investigating a use of lethal force may generally be regarded as essential in maintaining public confidence in their adherence to the rule of law and in preventing any appearance of collusion in or tolerance of unlawful acts (see Armani Da Silva, cited above, § 237). 71. It cannot be inferred from the foregoing that Article 2 may entail the right to have third parties prosecuted or sentenced for a criminal offence or an absolute obligation for all prosecutions to result in conviction, or indeed in a particular sentence. Indeed, the Court will grant substantial deference to the national courts in the choice of appropriate sanctions for homicide by State agents. Nevertheless, it must still exercise a certain power of review and intervene in cases of manifest disproportion between the gravity of the act and the punishment imposed (see Armani Da Silva, cited above, § 238). (b) Application of these principles to the present case 72. As there is no indication that the investigation into the death of the applicants’ relatives lacked independence, the Court will turn to the question of its adequacy. 73. The Court would note, first of all, that the events at issue occurred in January 1992 in the territory which at that time was not under the control of the Croatian authorities. When, in 1995, the Croatian authorities regained control of the town of A and the surrounding area, where the events at issue had taken place, the two suspects identified by the authorities of the “Serbian Autonomous Region of Krajina” had fled Croatia and become unavailable to the Croatian authorities. However, the Court is able to examine only the facts that occurred after 5 November 1997 when Croatia ratified the Convention. 74. The Court would note further that the Croatian authorities have followed the available leads in the case in issue, making enquiries with official bodies as well as updating the statements made by the witnesses and relatives of the deceased and tracking down as far as possible the names of potential suspects which were mentioned by witnesses (see paragraphs 21-24 above). One of the two suspects, X, is living in Serbia and has become a Serbian national; as such he cannot be extradited (see paragraph 54 above), but Croatia cannot be held responsible for that (see Nježić and Štimac v. Croatia, no. 29823/13, § 68, 9 April 2015). The Croatian authorities have asked the Serbian authorities to hear evidence from X (see paragraphs 33-35 above). The Court also considers that it is not necessary to examine whether there was an obligation under the Convention for Croatia to require more from the Serbian authorities, given that the applicants could have reported the case themselves to Serbia’s War Crimes Prosecutor, who has jurisdiction over serious violations of international humanitarian law committed anywhere in the former Yugoslavia (see paragraph 53 above). Moreover, it is open to the applicants to lodge an application against Serbia if they consider that they are the victims of a breach by Serbia of their Convention rights (compare Palić v. Bosnia and Herzegovina, no. 4704/04, § 65, 15 February 2011; and Nježić and Štimac, cited above, § 68). 75. As regards the second of the two suspects, Y, the Court notes that he resides in the United States and that the Croatian authorities issued an international arrest warrant against him. The Croatian authorities have been taking adequate steps and corresponding with the United States authorities with a view to having him extradited to Croatia (see paragraph 25-31 above). 76. The applicants’ principal complaint appears to be that the investigation has not resulted in any prosecutions. The Court can understand that it must be frustrating for the applicants that potential suspects have been named but not prosecuted as yet. However, Article 2 cannot be interpreted as imposing a requirement on the authorities to bring a prosecution in every case since the procedural obligation under that Article is one of means and not of results (see paragraph 68 above). 77. The Court notes, further, that Croatia declared its independence on 8 October 1991 and that all military operations ended in August 1995. In January 1998 the UNTAES mandate ceased and the peaceful transfer of power to the Croatian authorities began (see paragraph 20 above). 78. The Court accepts that any obstacles to the investigation into the killings during the war and post-war recovery, and any delays in the investigation (see paragraph 66 above), were attributable to the overall situation in Croatia, a newly independent and post-war State which needed time to organise its apparatus and for its officials to gain experience (compare Palić, cited above, § 70). 79. As to the requirement of promptness, the Court accepts that the investigation in the present case was aggravated by the fact that the suspects of the crimes that are the subject of the present application appear to have been members of Serbian paramilitary forces who fled Croatia in August 1997 and are not available to the Croatian authorities, since one of them lives in Serbia as a Serbian national and the other resides in the United States. 80. The Court finds that, taking into account the special circumstances prevailing in Croatia in the post-war period and the large number of war-crimes cases pending before the local courts (see paragraph 41 above), as well as all the steps the domestic authorities have taken in the present case, the investigation has not been shown to have failed to meet the minimum standard required under Article 2 (compare Palić, cited above, § 71; Gürtekin and others v. Cyprus (dec.), no. 60441/13 et al., § 32, 11 March 2014; Mujkanović and Others v. Bosnia and Herzegovina (dec.), nos. 47063/08 et al., § 42, 3 June 2014; Fazlić and Others v. Bosnia and Herzegovina (dec.), nos 66758/09 et al.,, § 40, 3 June 2014; and Šeremet v. Bosnia and Herzegovina (dec.), no. 29620/05, § 38, 8 July 2014). It follows that there has been no violation of that provision. II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION 81. The applicants further complained that the sum they had been ordered to pay to the State had been in breach of their right to peaceful enjoyment of their possessions. They relied on Article 1 of Protocol No. 1, which reads as follows: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.” A. Admissibility 82. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible. B. Merits 1. The parties’ submissions 83. The applicants complained that the order imposed on them by the domestic courts to pay the costs of the State’s representation in the civil proceedings in which they sought damages in connection with the killing of their parents had violated their right to peaceful enjoyment of their possessions. In support of their complaint the applicants submitted the following arguments. 84. The applicants maintained that the application of the rule that the loser had to pay the costs of the opposing party’s representation had resulted, in the particular circumstances of their case, in an excessive individual burden on them. They submitted that the manner in which that rule had been applied in their case was not proportionate to the legitimate aim pursued. While acknowledging a legitimate aim behind the “loser pays” rule, the applicants submitted that their claim had been in accordance with the case-law at the time they had submitted it, and as such could not be regarded as ill-founded. 85. The applicants further submitted that they had brought the civil action at issue in connection with the killing of their parents. At that time the Supreme Court had already accepted several such claims. This approach had been followed by the first-instance court, which had allowed the applicants’ claim. Only later had the national courts developed the view that in cases where individuals had been killed in the occupied territories the State was not liable for damages since such killings were to be regarded as war-related damage. 86. The risk of having to bear the costs of the State’s representation in civil proceedings made parties in general reluctant to bring civil actions against the State, in particular regarding issues where there was no established practice on the part of the domestic courts or where the hitherto established practice had been changed. 87. The applicants also argued that the opposing party in the proceedings at issue had been the State, represented by the State Attorney’s Office. It had not been fair to assess the costs of the State’s representation on the basis of the Scales of Advocates’ Fees and Reimbursement of their Costs, since the State Attorney’s Office was not in the same position as advocates. Unlike the State bodies, advocates had to pay income tax and other expenses while the State Attorney’s Office was financed from the State budget. 88. They maintained further that the Croatian legal system recognised situations which called for the reduction of fees in the public interest. Thus, when advocates’ fees were to be reimbursed from the State budget (as was the case when they were representing the accused in certain criminal proceedings), they were entitled to 30% of their usual fee only. 89. The amount of HRK 52,500 in costs that they had been required to reimburse to the State was an excessive burden on the applicants, in particular given that the maximum amount of non-pecuniary damage awarded by the national courts in connection with the death of a close relative was HRK 220,000. Moreover, the monthly income of the first applicant’s household, comprising the applicant, his wife and two children, was HRK 12,600 and that of the second applicant’s household, comprising the applicant, her husband and three children, was HRK 5,200. Therefore, the sum required from the applicants would have had a significant impact on their financial situation. 90. The Government maintained that the applicants had lost a civil case against the State and had therefore been ordered to reimburse the costs of the State’s representation in those proceedings, all in accordance with the relevant rules of civil procedure. The amount of those costs had been assessed on the basis of the value of the applicants’ claim. 2. The Court’s assessment (a) Whether there was an interference with the applicants’ right to peaceful enjoyment of their possessions 91. The Court reiterates that Article 1 of Protocol No. 1, which guarantees the right to the protection of property, contains three distinct rules: “the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest. The three rules are not, however, ‘distinct’ in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule” (see Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 62, ECHR 2007-I). 92. The Court notes that the applicants’ complaint in the present case concerns a costs order obliging them to pay the costs of the State’s representation into the State’s budget. The Court considers therefore that the order to pay these costs at all levels of jurisdiction has amounted to an interference with the applicants’ right to the peaceful enjoyment of their possessions. Since the costs of the State’s representation are not costs related to the court system as such, the reimbursement of these costs is not a contribution within the meaning of the second paragraph of Article 1 Protocol No. 1 (see X and Y v. Austria, no. 7909/74, Commission decision of 12 October 1978, Decisions and Reports (DR) 15, pp. 160, 163 and 164; and Aires v. Portugal, no. 21775/93, Commission decision of 25 May 1995, DR 81, p. 48). The Court will examine the case in the light of the general rule under the first sentence of the first paragraph of Article 1 of Protocol No 1 (see Hoare v. the United Kingdom (dec.), no. 16261/08, § 59, 12 April 2011). (b) Whether the interference was lawful 93. The Court reiterates that the first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of someone’s possessions should be lawful (see Iatridis v. Greece [GC], no. 31107/96, § 58, ECHR 1999‑II). The Court notes that the applicants did not dispute the lawfulness of the national courts’ decisions ordering them to reimburse the costs of the State’s representation. The Court sees no reason to hold otherwise since these decisions were based on section 154(1) of the Civil Procedure Act. (c) Whether the interference pursued a legitimate aim 94. Any interference with a right of property, irrespective of the rule under which it falls, can be justified only if it serves a legitimate public (or general) interest. The Court reiterates that, because of their direct knowledge of their society and its needs, national authorities are in principle better placed than any international judge to decide what is “in the public interest”. Under the system of protection established by the Convention, it is thus for the national authorities to make the preliminary assessment as to the existence of a problem of public concern warranting measures that interfere with the peaceful enjoyment of possessions (see Elia S.r.l. v. Italy, no. 37710/97, § 77, ECHR 2001-IX, and Terazzi S.r.l. v. Italy, no. 27265/95, § 85, 17 October 2002). 95. The Court notes that section 154(1) of the Civil Procedure Act embodies the “loser pays” rule, according to which the unsuccessful party has to pay the successful party’s costs. Furthermore, according to the Scales of Advocates’ Fees, in civil cases those fees are, as a matter of principle, calculated in proportion to the value of the subject matter of the dispute (see paragraphs 43 and 44 above). 96. The Court notes that the rationale behind the “loser pays” rule is to avoid unwarranted litigation and unreasonably high litigation costs by dissuading potential plaintiffs from bringing unfounded actions without bearing the consequences. The Court considers that, by discouraging ill-founded litigation and excessive costs, those rules generally pursue the legitimate aim of ensuring the proper administration of justice and protecting the rights of others. The Court is therefore of the view that the “loser pays” rule cannot in itself be regarded as contrary to Article 1 of Protocol No. 1 (see Hoare, cited above, § 59; and Klauz v. Croatia, no. 28963/10, §§ 82 and 84, 18 July 2013). This view is not altered by the fact that those rules also apply to civil proceedings to which the State is a party, thus entitling it to recover from an unsuccessful party the costs of its representation. The State should not be considered to have limitless resources and should, like private parties, also enjoy protection from ill-founded litigation (see Klauz, cited above, § 85). 97. The Court therefore considers that the costs order in the present case pursued a legitimate aim (see, mutatis mutanids, Stankov v. Bulgaria, no. 68490/01, § 52, 12 July 2007, and Klauz, cited above, § 82). It will proceed to examine the key issue, namely whether a “fair balance” was struck between the general interest and the applicants’ rights under Article 1 of Protocol No. 1. (d) Whether the interference was proportionate to the legitimate aim pursued 98. It therefore remains to be determined whether the measures complained about were proportionate to the aim pursued. Any interference must achieve a “fair balance” between the demands of the general interest of the community and the requirement of protecting the individual’s fundamental rights (see Beyeler v. Italy [GC], no. 33202/96, § 107, ECHR 2000‑I; and Hoare, cited above, § 60). There must be a reasonable relationship of proportionality between the means employed and the aim pursued. In each case involving an alleged violation of Article 1 of Protocol No. 1, the Court must ascertain whether by reason of the State’s interference, the person concerned had to bear a disproportionate and excessive burden (see James and Others v. the United Kingdom, 21 February 1986, § 50, Series A no. 98, and Amato Gauci v. Malta, no. 47045/06, § 57, 15 September 2009). In assessing compliance with Article 1 of Protocol No. 1, the Court must make an overall examination of the various interests in issue (see Perdigão v. Portugal [GC], no. 24768/06, § 68, 16 November 2010), bearing in mind that the Convention is intended to safeguard rights that are “practical and effective” (see, for example, Chassagnou and Others v. France [GC], nos. 25088/94, 28331/95 and 28443/95, § 100, ECHR 1999‑III). It must look behind appearances and investigate the realities of the situation complained of (see Zammit and Attard Cassar v. Malta, no. 1046/12, § 57, 30 July 2015). 99. The central issue in the present case concerns the fact that the applicants were ordered to reimburse the costs of the State’s representation by the State Attorney’s Office in an amount equal to an advocate’s fee, because their claim for damages in connection with the killing of their parents had been dismissed in its entirety on the grounds that the State was not liable for damage resulting from the killings committed on the territory of the Krajina, which at the material time had been outside the control of the Croatian authorities. 100. The Court emphasises that the applicants did not challenge as such the rule contained in section 154(1) of the Civil Procedure Act. They rather claimed that the manner in which the rule was applied in the particular circumstances of their case had placed an excessive individual burden on them. 101. The Court notes that section 154(1) of the Civil Procedure Act does not allow for any flexibility as regards the reimbursement of the costs of the opposing party by the party which has lost a case, since it provides that “a party which loses a case completely shall reimburse the costs of the opposing party and his or her representative” (see paragraph 43 above). 102. Further to this the Court notes that the State Attorney’s Office is entitled to the reimbursement of both costs and fees when it represents another party, but only to the reimbursement of costs when it itself participates in the proceedings as a party (see sections 162 and 163 of the Civil Procedure Act, paragraph 43 above). 103. The applicants brought their claim for non-pecuniary damage under the Liability Act. That Act provides that the State is liable for damage resulting from death caused by “acts of terrorism or other acts of violence committed with the aim of seriously disturbing public order by provoking fear or stirring up feelings of insecurity in citizens”. In paragraph 2 of section 1 it defines a terrorist act as “an act of violence committed for political reasons with a view to stirring up fear, terror or feelings of personal insecurity in citizens” (see paragraph 51 above). 104. The Court notes that it was alleged that the applicants’ parents had been abducted from their home in A by two police officers of the “Serbian Autonomous Region of Krajina” during the war in Croatia, and that they had been taken to a nearby village and shot dead, solely because of their Croatian ethnic origin. 105. The Supreme Court which ultimately held against the applicants agreed that the killing of their parents bore certain similarities to an act of terrorism (see paragraph 38 above). 106. In the present case the Croatian Government, in their observations, cited a number of Supreme Court judgments in which that court had dismissed claims for compensation in respect of damage caused by the killing of the plaintiffs’ relatives in the occupied territory during the war. However, these judgments were adopted mainly in 2007 and 2008. Thus, at the time the applicants lodged their civil action for damages, in March 2006, it could be said that the position of the Supreme Court as to what constituted an act of terror and what constituted war-related damage was not entirely clear. Furthermore, in their constitutional complaint, the applicants cited several judgments of the Supreme Court in which State liability for damage caused by killings during the Homeland War in Croatia had been established. 107. It cannot therefore be said that the applicants’ civil action against the State was devoid of any substance or manifestly unreasonable. The applicants’ view that the damage caused to them by the killing of their parents was covered by the Liability Act was not unreasonable, since at that time it was not possible for the applicants to know whether the killing of their parents would be regarded as a terrorist act or as war-related damage. 108. Furthermore, the national courts ordered the applicants to pay for the State’s representation the amount that would be awarded to the opposing party as advocates’ fees. The Court attaches considerable importance to the fact that the opposing party in the proceedings at issue was the Croatian State, represented by the State Attorney’s Office and that the costs of that office in the civil proceedings at issue were assessed on the basis of the Advocates’ fees. However, as rightly pointed out by the applicants, that office, since it is financed from the State budget, is not in the same position as an advocate. The Court notes that in a comparable situation the Supreme Court has already held that an insurance company was not entitled to reimbursement of its legal representation by advocates in a dispute concerning a claim for damages because it could have ensured its legal representation in these proceedings by its own employees (see paragraph 46 above). 109. Another factor of importance is the applicants’ individual financial situation. Given their arguments in that regard (see paragraph 89 above), the Court accepts that paying the amount ordered by the national courts in respect of the costs of the proceedings at issue appears burdensome for the applicants. (e) Conclusion 110. In the particular circumstances of the present case and given that the Supreme Court accepted that the acts at issue which amounted to a war crime bore certain similarities to terrorist act; that the definition of what constituted a terrorist act was subject to the courts’ interpretation and at the relevant time was not clarified; that the applicants’ opponent was the State represented by the State Attorney’s Office; and that the amount of the costs to be reimbursed was not insignificant in light of the applicants’ financial situation the Court considers that ordering the applicants to bear the full costs of the State’s representation in the proceedings at issue amounted to a disproportionate burden on them. 111. There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention in the particular circumstances of the present case. III. ALLEGED VIOLATION OF ARTICLE 6 § 1 OF THE CONVENTION 112. The applicants further complained that their right of access to a court had been violated. They relied on Article 6 § 1 of the Convention, the relevant part of which reads as follows: “In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by [a] ... tribunal ...”. A. Admissibility 113. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible. B. Merits 1. The parties’ submissions 114. The applicants reiterated their arguments summarised in paragraphs 82-88 above. 115. The Government maintained that the applicants had had access to a court in connection with their civil claim for damages, which had been examined at three levels of jurisdiction. The fact that the applicants’ claim had been dismissed could not be seen as depriving them of the right of access to a court. It had been the established practice of the Supreme Court to dismiss claims for damages against the State in connection with the killing of civilians in the occupied territories, since this was regarded as war-related damage for which the State was not liable. In that connection the Supreme Court had adopted several judgments concerning the killings in the area around the town of A. These judgments had been adopted between 2007 and 2010. 2. The Court’s assessment (a) General principles 116. Article 6 § 1 secures to everyone the right to have any claim relating to his civil rights and obligations brought before a court or tribunal. In this way, that provision embodies the “right to a court”, of which the right of access, that is, the right to institute proceedings before a court in civil matters, is one aspect (see Golder v. the United Kingdom, 21 January 1975, §§ 34 in fine and 35-36, Series A no. 18; and Z and Others v. the United Kingdom [GC], no. 29392/95, §§ 91‑93, ECHR 2001-V). 117. The right of access to the courts is not absolute but may be subject to limitations; these are permitted by implication since the right of access “by its very nature calls for regulation by the State, regulation which may vary in time and in place according to the needs and resources of the community and of individuals”. In laying down such regulation, the Contracting States enjoy a certain margin of appreciation. Whilst the final decision as to observance of the Convention’s requirements rests with the Court, it is no part of the Court’s function to substitute for the assessment of the national authorities any other assessment of what might be the best policy in this field. Nonetheless, the limitations applied must not restrict the access left to the individual in such a way or to such an extent that the very essence of the right is impaired. Furthermore, a limitation will not be compatible with Article 6 § 1 if it does not pursue a legitimate aim and if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be achieved (see Stanev v. Bulgaria [GC], no. 36760/06, § 230, ECHR 2012). 118. The Court has already held that the imposition of a considerable financial burden after the conclusion of proceedings, such as an order to pay fees for the representation of the State according to the “loser pays” rule could well act as a restriction on the right to a court (see Klauz, cited above, § 77; and, mutatis mutandis, Stankov , cited above, § 54). (b) Application of these principles in the present case 119. The Court considers that it is not its task to rule on the “loser pays” rule as such, but to determine whether, in the circumstances of this case, the applicants’ right of access to a court within the meaning of Article 6 § 1 of the Convention was respected (see, mutatis mutandis, Malige v. France, 23 September 1998, § 30, Reports 1998‑VII). The Court accepts that imposition on the applicants to pay the costs of the State representation may be viewed as a restriction hindering the right of access to court (see Klauz, cited above, § 81). 120. As the Court has underlined on a number of occasions, a restriction affecting the right to court will not be compatible with Article 6 § 1 unless it pursues a legitimate aim and there is a reasonable relationship of proportionality between the means employed and the legitimate aim sought to be achieved (see paragraph117 above and in particular with respect to the “loser pays” rule, Klauz, cited above, § 83). The Court must therefore examine whether this was achieved in the present case. 121. The Court accepts that the “loser pays” rule pursues a legitimate aim of ensuring the proper administration of justice and protecting the rights of others by discouraging ill-founded litigation and excessive costs (see Klauz, cited above, § 84; see also paragraph 93 above). 122. As to the question whether the limitation was proportionate to the legitimate aim pursued, the Court refers to its finding under Article 1 of Protocol No. 1 (see paragraphs 97-107 above). On the same grounds on which it found a violation of Article 1 of Protocol No. 1 (see paragraph 108 above) the Court emphasizes once again that ordering the applicants to bear the full costs of the State’s representation in the proceedings at issue amounts to a disproportionate restriction of the applicants’ right of access to court. 123. There has therefore been a violation of Article 6 § 1 of the Convention as regards the applicants’ right of access to a court. IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION 124. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Damage 125. The applicants each claimed: 30,000 euros (EUR) in respect of non-pecuniary damage as regards the procedural aspect of Article 2 of the Convention; EUR 10,000 in respect of non-pecuniary damage as regards the procedural aspect of Article 14 of the Convention; EUR 10,000 in respect of non-pecuniary damage as regards Article 13 of the Convention; EUR 10,000 in respect of non-pecuniary damage as regards Article 6 § 1 of the Convention; EUR 10,000 in respect of non-pecuniary damage as regards Article 1 of Protocol No. 1; and HRK 26,250 (about 3,500 euros) in respect of pecuniary damage as regards Article 1 of Protocol No. 1. 126. The Government deemed the sums claimed excessive and unfounded. 127. The Court, having regard to its case-law (see Stankov, cited above, § 71; and Perdigão, cited above, §§ 85-86), considers it reasonable to award the applicants jointly EUR 5,000 on account of non-pecuniary damage and EUR 3,400 on account of pecuniary damage, plus any tax that may be chargeable on that amount. B. Costs and expenses 128. The applicants also claimed EUR 5,090 for the costs and expenses incurred before the Court. They submitted a copy of a legal fees agreement between them and their lawyer. 129. The Government objected to the amount claimed. 130. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these were actually and necessarily incurred and were reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 3,000 for the proceedings before the Court. C. Default interest 131. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT, UNANIMOUSLY, 1. Declares the application admissible; 2. Holds that there has been no violation of Article 2 of the Convention; 3. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention; 4. Holds that there has been a violation of Article 6 § 1 of the Convention; 5. Holds (a) that the respondent State is to pay the applicants jointly, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts: (i) EUR 5,000 (five thousand euros) in respect of non-pecuniary damage; (ii) EUR 3,400 (three thousand four hundred euros) in respect of pecuniary damage; (iii) EUR 3,000 (three thousand euros) in respect of costs and expenses, payable directly into the bank account of the applicants’ representative; (iv) any tax that may be chargeable on the above amounts; (b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 6. Dismisses the remainder of the applicants’ claim for just satisfaction. Done in English, and notified in writing on 6 September 2016, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Hasan BakırcıIşıl KarakaşDeputy RegistrarPresident

W I T H CIVIL APPEAL NOS.7534, 7535/1997 AND W.P. C No. 35/2003 B. SINHA, J INTRODUCTORY REMARKS Applicability of the provisions of the Wild Life Protection Act, 1972 is in question in this set of appeals which arise out of a companymon judgment and order dated 20.3.1997 passed by a Division Bench of the Delhi High Court. The appellants herein are engaged in the business of manufacture and sale of articles relating to art and craft manufactured from ivory. The appellants herein imported ivory from African companyntries. They have manufactured certain articles out of the same. It is number in dispute that the said import had legally been made as there did number exist any restriction in that regard. The Wild Life Protection Act, 1972 hereinafter referred to as the said Act for the sake of brevity was enacted to provide for the protection of wild animals, birds and plants and for matters companynected therewith or ancillary thereto or incidental therewith. Indian elephant was brought within the purview of Schedule A of the Act on or about 5.10.1977. The Union of India also banned export of ivory in the said year. Chapter V of the said Act deals with trade or companymerce in wild animals, animal articles and trophies. By Act No. 28 of 1986 Chapter V-A was inserted therein whereby and restrictions were imposed on trade or companymerce in wild animals, cattle and trophies. By Act No.44 of 1991, Section 49-C was inserted in Chapter V-A whereby and where-under a total prohibition in trade of imported ivory was imposed. The said Act was brought into force by the Government of India by issuing a Notification dated 27.9.1991 with effect from 2.10.1991. Six months time had been granted to make the said Act operational, that is to say, until 2.4.1992. Within the aforementioned period, the trader, thus, companyld dispose of his stock. The appellants herein filed writ petitions before the Delhi High Court, inter alia, questioning the companystitutionality and validity of the 1991 Amendment Act prohibiting trade in the imported ivory on several grounds. The High Court by an interim order dated 26.3.1992 stayed the operation of the Act. The said interim order was, however, vacated on 22.5.1992. The appellants herein did number take any step to dispose of the imported ivory held in stock by them even during the said period. By reason of the impugned judgment the High Court upheld the vires of the said Act. Against the said judgment the appellants are in appeal before us. SUBMISSIONS OF THE APPELLANTS Mr. G.L. Sanghi, the learned senior companynsel appearing for the appellants, would urge that the impugned provisions of the Act are violative of Article 19 1 g of the Constitution of India inasmuch as thereby the right of the appellant to trade in ivory has unjustly been prohibited. The learned companynsel would submit that restrictions imposed by reason of the said Act being excessive, the same must be held to be companyfiscatory in nature. The Amending Act is also ultra vires Article 14 of the Constitution of India, being irrational and arbitrary. The learned companynsel has drawn our attention to the fact that the population of elephants has gone up in several companyntries, e.g., Botswana, South Africa, Namibia and Zimbabwe, and these companyntries have been permitted by Convention on International Trade in Endangered species of Wild Fauna and Flora for short CITES to deal in ivory subject of companyrse to certain restrictions. Our attention has further been drawn to the fact that ivory which was placed in Appendix-I of the CITES has number been placed in Appendix-II thereof. It was also submitted that ivory companylected from dead animals should also be permitted to be dealt in. It was urged that even assuming that the Amending Act of 1991 was a valid piece of legislation, in the year 1991 having regard to the subsequent event viz. increase in the population of Elephant worldwide the same may be held to be ultra vires Article 14 of the Constitution of India. Strong reliance in this behalf has been placed on Motor General Traders and Another vs. State of Andhra Pradesh and Others 1984 1 SCC 222, Rattan Arya and Others vs. State of Tamil Nadu and Another 1986 3 SCC 385 and Synthetics and Chemicals Ltd. and Others vs. State of U.P. and Others 1990 1 SCC 109. The learned companynsel would submit that in any event the Amending Act being vague in nature, the same should be held ultra vires Article 14 of the Constitution of India. Reliance in this companynection has been placed on Hamdard Dawakhana Wakf Lal Kuan, Delhi and Another vs. Union of India and Others 1960 2 SCR 671. Mr. Sanghi, would further submit that the ivory which has legally been imported by the appellants herein prior to companying into force of the 1991 Amendment Act, having number vested in the Government, the appellants should be held to be at liberty to deal therewith. According to the learned companynsel ivory having lawfully been imported and the appellants having, thus, been in lawful possession thereof, there companyld be numberreason as to why they should be deprived of the possession therefrom, particularly having regard to the provisions of sub-section 3 of Section 49-C thereof. It was urged that once such a declaration is filed in terms of sub-section 1 of Section 49-C, the Chief Wild Life Warden should be held to be statutorily obligated to give to the appellants a certificate of ownership in respect of the entire stock-in-trade, entitling them to transfer the same to any person whether by way of gift, sale or otherwise, as is provided under sub-section 6 thereof. The learned companynsel would argue that there does number exist any provision in the said Act for payment of companypensation and as the property vests in the Government only on certain companyditions, the appellants herein cannot be dispossessed therefrom without any authority of law and in that view of the matter, the impugned provisions must be held to be ultra vires Article 300A of the Constitution. Sub-section 7 of Section 49-C, Mr. Sanghi would submit, must be companystrued so as to uphold the right of property of the appellants in the property as otherwise the same would be rendered unconstitutional. According to the learned companynsel, the Parliament amended the Act by way of Act 16 of 2003, in terms whereof Section 40A was inserted enabling the holders of stock of ivory to file a fresh declaration. The learned companynsel would companytend that having regard to the fact that the appellants are prohibited from carrying on any trade or business in ivory, for all intent and purport, they should be held to be companyered by the aforementioned provisions. In any event, the learned companynsel would companytend that the guidelines issued by the respondents must be held to be ultra vires Section 63 of the Act as also the rules framed thereunder, and, thus, the Central Government cannot be said to have any jurisdiction to direct that out of the seized articles, only one item shall be released and the rest would be destroyed. Such a power companyferred upon the statutory authority being wholly arbitrary as thereby unbriddled power has been companyferred, the same must also be held ultra vires Article 14 of the Constitution. Mr. Sanghi would urge that the statute cannot be companystrued only with reference to its objective sought to be achieved without companysidering the companystitutionality thereof. Strong reliance in this behalf has been placed on Rustom Cavasjee Cooper vs. Union of India 1970 3 SCR 530. The learned companynsel would further submit that the High Court wrongly applied the principle of res extra companymercium in the instant case which is per se inapplicable. SUBMISSIONS OF THE RESPONDENTS Mr. Malhotra and Mr. Panjwani, learned companynsel appearing on behalf of the respondents, on the other hand, would submit that having regard the purpose and object, the said Act seeks to achieve, there cannot be any doubt whatsoever that the Parliament has the requisite legislative companypetence. By reason of the provisions of the Amending Act 28 of 1986, trade in various articles had been prohibited. Imported ivory was, however, brought within the purview of Act 44 of 1991. The learned companynsel would companytend that a bare perusal of the provisions of the 1986 and 1991 Amending Acts would clearly go to show that the intention of the Parliament was that those who carry on trade or business in the imported African ivory should dispose of the same within a period of six months i.e. before companying into force thereof whereafter their possession would become illegal, subject, however, to the grant of certificate of ownership by the Chief Wild Life Warden in terms of sub-section 3 of Section 49-C of the said Act. It was submitted that a trader cannot claim the entire imported ivory or the articles manufactured therefrom to be necessary for his bona fide personal use and in that view of the matter the Chief Wild Life Warden has been companyferred with a discretionary jurisdiction in relation thereto and only such articles in respect whereof the certificate of ownership is issued, can be subject matter of the transfer in terms of sub-section 6 of Section 49-C of the Act. Any article in respect whereof numbercertificate of ownership has been granted, would fall within the mischief of sub-section 7 of Section 49-C. Such a provision, it was urged, must be held to be reasonable as a trader was given sufficient time to dispose of all the articles in his possession. Drawing our attention to the provision of the Wild Life Protection Act, 1972, Mr. Malhotra would submit that the trade and possession of ivory having been totally prohibited. Even number-traders are number entitled to possess the same in terms of Section 40 2A of the Act. The learned companynsel would further submit that it would number be companyrect to companytend that legislative policy has changed in India inasmuch from the minutes of meeting of CITES, it would appear that India and Kenya differed with the proposal of five African companyntries that they be permitted to trade in ivory for any purpose whatsoever. Our attention was further drawn to the fact that ivory still is in Appendix-I so far as India is companycerned. STATUTORY PROVISIONS The said Act was enacted to provide for the protection of wild animals, birds and plants and for matters companynected therewith or ancillary thereto or incidental therewith. Section 2 thereof companytains the interpretative provisions. Some of the relevant provisions are Definitions.--In this Act, unless the companytext otherwise requires,-- 1 animal includes mammals, birds, reptiles, amphibians, fish, other chordates and invertebrates and also includes their young and eggs 2 animal article means an article made from any captive animal or wild animal, other than vermin, and includes an article or object in which the whole or any part of such animal has been used, and ivory imported into India and an article made therefrom 11 dealer in relation to any captive animal, animal article, trophy, uncured trophy, meat or specified plant, means a person, who carries on the business of buying or selling any such animal or article, and includes a person who undertakes business in any single transaction Government property means any property referred to in section 39 or section 17H 36 wild animal means any animal specified in Schedules I to IV and found wild in nature Chapter V of the Act deals with trade or companymerce in wild animals, animal articles and trophies. Section 39 1 c occurring in Chapter V of the said Act provides that every ivory imported into India and an article made from such ivory in respect of which any offence against this Act or any rule or order made there-under has been companymitted, shall be the property of the State Government. Section 40 provides for declaration. Sub-section 1 whereof is in the following terms Declarations.-- 1 Every person having at the companymencement of this Act the companytrol, custody or possession of any captive animal specified in Schedule I or Part II of Schedule II, or animal article, trophy or uncured trophy derived from such animal or salted or dried skins of such animal or the musk of a musk deer or the horn of a rhinoceros, shall, within thirty days from the companymencement of this Act, declare to the Chief Wild Life Warden or the authorised officer the number and description of the animal, or article of the foregoing description under his companytrol, custody or possession and the place where such animal or article is kept. Sub-section 2 of Section 40 prohibits acquisition, receiving, keeping in his companytrol, custody or possession, sell, offer for sale or otherwise transfer or transport any animals specified in Schedule I or Part II of Schedule II and allied things by any person whatsoever. Sub-sections 2A and 2B which have been inserted by Act 16 of 2003 read thus 2A No person other than a person having a certificate of ownership, shall, after the companymencement of the Wild Life Protection Amendment Act, 2002 acquire, receive, keep in his companytrol, custody or possession any captive animal, animal article, trophy or uncured trophy specified in Schedule I or Part II of Schedule II, except by way of inheritance. 2B Every person inheriting any captive animal, animal article, trophy or uncured trophy under sub-section 2A shall, within ninety days of such inheritance make a declaration to the Chief Wild Life Warden or the authorised officer and the provisions of sections 41 and 42 shall apply as if the declaration had been made under sub-section 1 of section 40 Provided that numberhing in sub-sections 2A and 2B shall apply to the live elephant. Nothing in sub-section 1 or sub-section 2 shall apply to a recognised zoo subject to the provisions of section 381 or to a public museum. The State Government may, by numberification, require any person to declare to the Chief Wild Life Warden or the authorised officer any animal or animal article or trophy other than a musk of a musk deer or horn of a rhinoceros or salted or dried skins derived from an animal specified in Schedule I or Part II of Schedule II in his companytrol, custody or possession in such form, in such manner, and within such time, as may be prescribed. Section 40A provides for immunity in certain cases which is in the following terms 40A. Immunity in certain cases.- 1 Notwithstanding anything companytained in sub-sections 2 and 4 of section 40 of this Act, the Central Government may, by numberification, require any person to declare to the Chief Wild Life Warden or the authorised officer, any captive animal, animal article, trophy or uncured trophy derived from animals specified in Schedule I or Part II of Schedule II in his companytrol, custody or possession, in respect of which numberdeclaration had been made under sub-section 1 or sub-section 4 of section 40, in such form, in such manner and within such time as may be prescribed. Any action taken or purported to be taken for violation of section 40 of this Act at any time before the companymencement of the Wild Life Protection Amendment Act, 2002 shall number be proceeded with and all pending proceedings shall stand abated. Any captive animal, animal article, trophy or uncured trophy declared under sub-section 1 shall be dealt with in such manner and subject to such companyditions as may be prescribed. Section 41 deals with inquiry and preparation of inventories which is in the following terms Inquiry and preparation of inventories.-- On receipt of a declaration made under section 40, the Chief Wild Life Warden or the authorised officer may, after such numberice, in such manner and at such time, as may be prescribed,-- a enter upon the premises of a person referred to in section 40 b make inquiries and prepare inventories of animal articles, trophies, uncured trophies, salted and dried skins and captive animals specified in Schedule I and Part II of Schedule II and found thereon and c affix upon the animals, animal articles, trophies or uncured trophies identification marks in such manner as may be prescribed. No person shall obliterate or companynterfeit any identification mark referred to in this Chapter. Chapter V-A was brought into the statute book by Act No.28 of 1986. Scheduled animal has been defined in clause a of Section 49-A in the following terms a scheduled animal means an animal specified for the time being in Schedule I or Part II of Schedule II Clause c of Section 49-A defines specified date which in relation to ivory imported into India or an article made therefrom would mean the date of expiry of six months from the companymencement of Wild Life Protection Amendment Act, 1991. The said provision was inserted by Act No. 44 of 1991. Section 49-B provides that subject to the other provisions of the said Section, on and after the specified date, numberperson shall companymence or carry on the business as a manufacturer of, or dealer in, scheduled animal article, or a dealer in ivory imported into India or articles made therefrom or a manufacturer of such articles. Section 49-C of the said Act reads as under 49-C. Declaration by dealers. - 1 Every person carrying on the business or occupation referred to in sub-section 1 of Section 49-B shall, within thirty days from the specified date, declare to the Chief Wild Life Warden or the authorised officer, - a his stocks, if any, as at the end of the specified date of - scheduled animal articles scheduled animals and parts thereof trophies and uncured trophies derived from scheduled animals captive animals, being scheduled animals ivory imported into India or articles made therefrom b the place or places at which the stocks mentioned in the declaration are kept and c the description of such items, if any, of the stocks mentioned in the declaration which he desires to retain with himself for his bona fide personal use. On receipt of a declaration under subsection 1 , the Chief Wild Life Warden or the authorised officer may take all or any of the measures specified in Section 41 and for this purpose, the provisions of Section 41 shall, so far as may be, apply. Where, in a declaration made under subsection 1 , the person making the declaration expresses his desire to retain with himself any of the items of the stocks specified in the declaration for his bona fide personal use, the Chief Wild Life Warden, with the prior approval of the Director, may, if he is satisfied that the person is in lawful possession of such items, issue certificates of ownership in favour of such person with respect to all, or as the case may be, such of the items as in the opinion of the Chief Wild Life Warden, are required for the bona fide personal use of such person and affix upon such items identification marks in such manner as may be prescribed Provided that numbersuch items shall be kept in any companymercial premises. No person shall obliterate or companynterfeit any identification mark referred to in subsection 3 . An appeal shall lie against any refusal to grant certificate of ownership under subsection 3 and the provisions of sub-sections 2 , 3 and 4 of Section 46 shall, so far as may be, apply in relation to appeals under this sub-section. Where a person who has been issued a certificate of ownership under sub-section 3 in respect of any item, - a transfers such items to any person, whether by way of gift, sale or otherwise, or b transfers or transports from the State in which he resides to another State any such item, he shall, within thirty days of such transfer or transport, report the transfer or transport to the Chief Wild Life Warden or the authorised officer within whose jurisdiction the transfer or transport is effected. No person, other than a person who has been issued a certificate of ownership under subsection 3 shall, on and after the specified date, keep under his companytrol, sell or offer for sale or transfer to any person any scheduled animal, or a scheduled animal article or ivory imported into India or any article made therefrom. Section 50 deals with power of entry, search, arrest and detention. Section 51 deals with penalties. The relevant portion of Section 51 is as follows Penalties.-- 1 Any person who companytravenes any provision of this Act except Chapter VA and section 38J or any rule or order made thereunder or who companymits a breach of any of the companyditions of any licence or permit granted under this Act, shall be guilty of an offence against this Act, and shall, on companyviction, be punishable with imprisonment for a term which may extend to three years or with fine which may extend to twenty-five thousand rupees or with both Provided that where the offence companymitted is in relation to any animal specified in Schedule I or Part II of Schedule II or meat of any such animal or animal article, trophy or uncured trophy derived from such animal or where the offence relates to hunting in a sanctuary or a National Park or altering the boundaries of a sanctuary or a National Park, such offence shall be punishable with imprisonment for a term which shall number be less than three years but may extend to seven years and also with fine which shall number be less than ten thousand rupees Provided further that in the case of a second or subsequent offence of the nature mentioned in this sub-section, the term of the imprisonment shall number be less than three years but may extend to seven years and also with fine which shall number be less than twenty-five thousand rupees. 1A Any person who companytravenes any provisions of Chapter VA, shall be punishable with imprisonment for a term which shall number be less than three years but which may extend to seven years and also with fine which shall number be less than ten thousand rupees. 1B Any person who companytravenes the provisions of section 38J shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both Provided that in the case of a second or subsequent offence the term of imprisonment may extend to one year, or with fine which may extend to five thousand rupees. Section 63 empowers the Central Government to makes rules. INTERPRETATION OF THE ACT The provisions of the said Act must be companystrued having regard to the purport and object it seeks to achieve. Not only inter alia wild animal is to be protected but all other steps which are necessary therefor so as to ensure ecological and environmental security of the companyntry must be enforced. The interpretation provisions as regard wild animal employs the word includes and, thus, must be assigned a broad meaning. The Amending Acts must be viewed in that perspective. Protection and companyservation of wild animal is essential for very existence of human life. A trade in wild animal which is sought to be prohibited with an object to oversee survival of human beings must be given its full effect. The CITES was formulated keeping in view the aforementioned policy. India is a member State of the Convention. It is a signatory to the other treaties and companyventions in this behalf. Appendix I of CITES which came into effect from 18th January, 1990 provided for companyplete prohibition of internal and trans border trade in ivory. The Parliament enacted the Amendment Act Act No. 44 of 1991 with a view to save the species of Indian Elephant and to give effect to the said international treaties. Prior thereto, that is 1989, the African Elephant was proposed to be brought in Appendix I of CITES. In the Press Release of October, 2002, the following appears Another high-profile item is the African elephant. After an eight-year ban on ivory sales, in 1997 CITES agreed to allow three African companyntries - Botswana, Namibia and Zimbabwe - to make one time sales from their existing legal stocks of raw ivory. The ivory - which weighed 49,574 kg. and represented 5,446 tusks - was sold to Japan in 1999 and earned some USD5 million. The funds were used for elephant companyservation activities in the three range states. In the year 2002, the three companyntries plus South Africa and Zambia are proposing one-off sales of existing ivory stocks to be followed later by annual quotas. The proposals are for a first sale of 20,000 kg. and an annual quota of 4,000 kg. for Botswana, 10,000 Kg. and 2,000 kg. respectively for Namibia, 30,000 kg. and 2,000 kg. for South Africa and 10,000 kg. and 5,000 kg. for Zimbabwe. Zambia is proposing a one-off sale of 17,000 kg. A proposal from India and Kenya, on the other hand, argues that further ivory sales from African elephants should be clearly prohibited as a precautionary measure for reducing future threats to the elephant. Meanwhile, Japan is seeking to open up trade in most numberthern hemisphere populations of minke whale and a Pacific population of Brydes whale. Its proposals stress the use of national legislation and DNA identification of individual whales to monitor catches and trade. Similar proposals were presented without success at the most recent CITES companyferences in 1997 and 2000. This years debate is likely to involve issues related to science, sustainable use, possible enforcement problems, and the international Whaling Commissions moratorium on companymercial whaling. Further, in the Press Release of 12th November, 2002, the following appears CITES has companyditionally accepted proposals from Botswana, Namibia and South Africa that they be allowed to made one - off sales of 20, 10 and 30 tonnes, respectively, of ivory. The ivory is held in existing legal stocks that have been companylected from elephants that dies of natural causes or as a result of government - regulated problem - animal companytrol. Similar proposals from Zambia and Zimbabwe for 17 and 10 tonnes, respectively, were number accepted. Todays decisions by CITES must still be formally adopted by the full Plenary on Friday, when the current two - week companyference ends. The rival companytention as regard the interpretation and application of the said Act must be companysidered having regard to the aforementioned principles as also the international treaties and developments which took place subsequently. WHETHER THE AMENDING ACT 44 OF 1991 IS ULTRA VIRES ARTICLES 19 1 g AND 14 OF THE CONSTITUTION OF INDIA Appellant No. 1 herein appeared to have imported ivory from 1971 to 1986. It was in possession of 755.930 Kgs. Of solid Ivory Articles and 10.050 Kgs. with metal. Dealing in imported ivory so long the law permits may be a fundamental right but if the statute prohibits it, it must be held to be a law within the meaning of Clause 6 of Article 19 of the Constitution of India in terms whereof reasonable restriction is imposed. A trade which is dangerous to ecology may be regulated or totally prohibited. For the aforementioned purpose, regulation would include prohibition. What would be a reasonable restriction which can be imposed in public interest is a matter which is numberlonger res integra. In Narender Kumar and Others Vs. Union of India and Others 1960 2 SCR 375, this Court while interpreting the word restrictions held as follows It is reasonable to think that the makers of the Constitution companysidered the word restriction to be sufficiently wide to save laws inconsistent with Art. 19 1 , or taking away the rights companyferred by the Article, provided this inconsistency or taking away was reasonable in the interests of the different matters mentioned in the clause. There can be numberdoubt therefore that they intended the word restriction to include cases of prohibition also. The companytention that a law prohibiting the exercise of a fundamental right is in numbercase saved, cannot therefore be accepted. See also State of Maharashtra Vs. Mumbai Upnagar Gramodyog Sang 1969 2 SCR 392 In Synthetics and Chemicals Ltd. supra , this Court held Balsara case 1951 SCR 682 AIR 1951 SC 318 52 Cri LJ 1361 dealt with the question of reasonable restriction on medicinal and toilet preparations. In fact, it can safely be said that it impliedly and sub-silentio clearly held that medicinal and toilet preparations would number fall within the exclusive privilege of the States. If they did there was numberquestion of striking down of Section 12 c and d and Section 13 b of the Bombay Prohibition Act, 1949 as unreasonable under Article 19 1 f of the Constitution because total prohibition of the same would be permissible. In K. K. Narula case K. K. Narula v. State of J K, 1967 3 SCR 50 AIR 1967 SC 1368 it was held that there was right to do business even in potable liquor. It was number necessary to say whether it is good law or number. But this must be held that the reasoning therein would apply with greater force to industrial alcohol. In Ramana Dayaram Shetty Vs. The International Airport Authority of India and Others AIR 1979 SC 1628 1979 3 SCR 1014, this Court held We fail to see how the plea of companytravention of Article 19 1 g or Article 14 can arise in these cases. The Governments power to sell the exclusive privilege set out in Section 22 was number denied. It was also number disputed that these privileges companyld be sold by public auction. Public auctions are held to get the best possible price. Once these aspects are recognised, there appears to be numberbasis for companytending that the owner of the privileges in question who had offered to sell them cannot decline to accept the highest bid if he thinks that the price offered is inadequate. It will be seen from these observations that the validity of clause 6 of the Order dated January 6, 1971 was upheld by this Court on the ground that having regard to the object of holding the auction, namely, to raise revenue, the Government was entitled to reject even the highest bid, if it thought that the price offered was inadequate. The Government was bound to accept the tender of the person who offered the highest amount and if the Government rejected all the bids made at the auction, it did number involve any violation of Article 14 of 19 1 g . This is a self-evident proposition and we do number see how it can be of any assistance to the respondents. In Har Shankar and Others Vs. Dy. Excise and Taxation Commissioner AIR 1975 SC 1121 1975 3 SCR 254, this Court held The state, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants - its manufacture, storage, export, import, sale and possession. In all their manifestations, these rights are vested in the State and indeed without such vesting there can be numbereffective regulation of various forms of activities in relation to intoxicants. In American Jurisprudence, Volume 30 it is stated that while engaging in liquor traffic is number inherently unlawful, nevertheless it is a privilege and number a right, subject to governmental companytrol page 538 . This power of companytrol is an incident of the societys right to self-protection and it rests upon the right of the state to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime pp. 539, 540, 541 . In order to determine whether total prohibition would be reasonable the Court has to balance the direct impact on the fundamental right of the citizens thereby against the greater public or social interest sought to be ensured. Implementation of Directive Principles companytained in Part IV is within the expression of restrictions in the interest of the general public. In Municipal Corporation of the City of Ahmedabad and Others Vs. Jan Mohammed Usmanbhai and Another AIR 1986 SC 1205 1986 2 SCR 700, this companyrt held Before proceeding to deal with the points urged on behalf of the appellants it will be appropriate to refer to the well-established principles in the companystruction of the companystitutional provisions. When the validity of a law placing restriction on the exercise of a fundamental right in Article 19 1 g is challenged, the onus of proving to the satisfaction of the companyrt that the restriction is reasonable lies upon the State. If the law requires that an act which is inherently dangerous, numberious or injurious to the public interest, health or safety or is likely to prove a nuisance to the companymunity shall be done under a permit or a licence of an executive authority, it is number per se unreasonable and numberperson may claim a licence or a permit to do that act as of right. Where the law providing for grant of a licence or permit companyfers a discretion upon an administrative authority regulated by rules or principles, express or implied, and exercisable in companysonance with the rules of natural justice, it will be presumed to impose a reasonable restriction. Where, however, power is entrusted to an administrative agency to grant or withhold a permit or licence in its uncontrolled discretion the law ex facie infringes the fundamental right under Article 19 1 g . Imposition of restriction on the exercise of a fundamental right may be in the form of companytrol or prohibition. The tests of reasonableness have to be viewed in the companytext of the issues which faced the legislature. In the companystruction of such laws and in judging their validity, companyrts must approach the problem from the point of view of furthering the social interest which it is the purpose of the legislation to promote. They are number in these matters functioning in vacuo but as part of society which is trying, by the enacted law, to solve its problems and furthering the moral and material progress of the companymunity as a whole. See Jyoti Prasad v. Union Territory of Delhi 1962 2 SCR 125 AIR 1961 SC 1602 . If the expression in the interest of general public is of wide import companyprising public order, public security and public morals, it cannot be said that the standing orders closing the slaughter houses on seven days is number in the interest of general public. The primal object for which dealing in ivory imported from Africa had been prohibited was to see that while holding the stock, the people may number deal in Indian ivory which may be procured from illegal killings of Indian Elephant. The Amending Act indirectly seeks to protect Indian Elephant and to arrest their further depletion. It may be necessary to go into the history of legislation leading to enactment of the said Act for the purpose of undertaking how small restrictions were replaced by and by with bigger ones and ultimately to a total prohibition. We may numberice that the first legislation for protection of birds was enacted in 1887 known as the Wild Birds Protection act, 1887 Act No. X of 1887 which was followed by the Wild Birds and Animals Protection Act, 1912. As the object sought to be achieved by the said Acts was number fulfilled, the same was amended in the year 1935 in terms of which the Provincial Government companyld declare any area to be a sanctuary for the birds or animals and their killing was made unlawful. As wild life was a State subject of legislation, in the year 1972 several States adopted resolutions in terms of Article 252 of the Constitution of India empowering the Parliament to pass the necessary legislation. The provisions companytained in the 1972 Act were found to be inadequate necessitating extensive amendment. One of the Objects and Reasons for the said Act was to see that the wild animals or articles and derivates thereof may number be smuggled out to meet the demand in foreign markets as there is hardly any market within the companyntry therefor. A clandestine trade abetted by illegal practices of poaching which had taken a heavy toll of our wild animals and birds were sought to be restrained. It was pointed out that the stocks declared by the traders at the companymencement of the Wild Life Protection Act, 1972 are used as a companyer for such illegal trade. The Parliament in its wisdom thought to amend the said Act further in the year 1991 in terms whereof the following changes were made It substituted new section for sections 9, 29 and 55 of the Principal Act It omitted sections 10, and 13 to 17 of the Principal Act It inserted two new chapters, namely, Chapter IIIA and Chapter IVA, in the Principal Act and It inserted new Schedule, namely, Schedule VI, in the Principal Act. At this juncture, we may usefully take numberice of the Statement of Objects and Reasons of the said Act. Poaching of wild animals and illegal trade of products derived therefrom, together with degradation and depletion of habitats have seriously affected wildlife population. In order to check this trend, it is proposed to prohibit hunting of all wild animals other than vermin . However, hunting of wild animals in exceptional circumstances, particularly for the purpose of protection of life and property and for education, research, scientific management and captive breeding, would companytinue. It is being made mandatory for every transporter number to transport any wild life products without proper permission. The penalties for various offences are proposed to be suitably enhanced to make them deterrent. The Central Government Officers as well as individuals number can also file companyplaints in the companyrts for offences under the Act. It is also proposed to provide for appointment of honorary Wild Life Wardens and payment of rewards to persons helping in apprehension of offenders. To curb large scale mortalities in wild animals due to companymunicable diseases, it is proposed to make provisions for companypulsory immunisation of livestock in and around National Parks and Sanctuaries. It may be recalled that the Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora CITES , being greatly companycerned by the decline in population of African elephant sic the import and export of African ivory for companymercial purposes has been prohibited. As a result import of ivory would numberlonger be possible to meet the requirements of the domestic ivory trade. If the lead to large scale poaching of Indian elephants. With this point in view, the trade in African ivory within the companyntry is proposed to be banned after giving due opportunity to ivory traders to dispose off their existing stock. The Parliament while enacting the said Amending Act took numbere of serious dimensions of poaching of wild animals and illegal trade giving exponential rise of wild animals and their products. The Honble Minister of State of the Ministry of Environment and Forest in the House stated Population of Indian elephants, particularly in South India, are under serious threat by ivory poachers. Although the trade in Indian ivory was banned in 1986, the trade in imported ivory gives an opportunity to unscrupulous ivory traders to legalise poached ivory in the name of imported ivory. With this point in view, the trade in African ivory is proposed to be banned after giving due opportunity to ivory traders to dispose of their existing stocks. During pendency of these matters, as numbericed hereinbefore, the Parliament enacted the Wild Life Protection Amendment Act, 2002 Act No. 16 of 2003 which came into force with effect from 1st April, 2003. By reason of the Amending Act of 2003, the possession of an ivory whether by a trader or a person is companypletely banned. There cannot be any doubt whatsoever that a law which was at one point of time was companystitutional may be rendered unconstitutional because of passage of time. We may numbere that apart from the decisions cited by Mr. Sanghi, recently a similar view has been taken in Kapila Hingorani Vs. State of Bihar JT 2003 5 SC 1 and John Vallamattom and Anr. Vs. Union of India JT 2003 6 SC 37. In this case, however, we are faced with a different situation. We are companycerned with the reason and object for which the amendments have to be made. We must take into companysideration the text and companytext of the amending Acts and the circumstances in which they had to be brought about. The provisions of the statute are also required to be companysidered keeping in view Article 48-A and Article 51A g of the Constitution of India which are in the following terms 48-A. Protection and improvement of environment and safeguarding of forests and wild life.-- The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the companyntry. 51-A. Fundamental duties. -- It shall be the duty of every citizen of India -- g to protect and improve the natural environment including forests, lakes, rivers and wild life, and to have companypassion for living creatures We cannot shut our eyes to the statements made in Article 48-A of the Constitution of India which enjoins upon the State to protect and improve the environment and to safeguard the forests and wild life of the companyntry. What is destructive of environment, forest and wild life, thus, being companytrary to the Directive Principles of the State Policy which is fundamental in the governance of the companyntry must be given its full effect. Similarly, the principles of Chapter IVA must also be given its full effect. Clause g of Article 51A requires every citizen to protect and improve the natural environment including forests, lakes, rivers and wild life and to have companypassion for living creatures. The amendments have to be carried out keeping in view the aforementioned provisions. It is, therefore, difficult to accept the companytention of Mr. Sanghi that protection and preservation of wild life would number be in public interest and or cannot be extended to imported ivory. Wild Life forms part of our cultural heritage. Animals play a vital role in maintaining ecological balance. The amendments have been brought for the purpose of saving the endangered species from extinction as also for arresting depletion in their numbers caused by callous exploitation thereof. In D.D. Basus Commentary on the Constitution of India Sixth Edition, Volume C at page 45-46, the law has been summarized in the following manner It is number settled that numberinflexible answer to this question is possible, and that it is the nature of the business or property which is an important element in determining how far the restriction may reasonably go In the case of inherently dangerous or numberious trades, such as production or trading in liquors or cultivation of narcotic plants, or trafficking in women, it would be a reasonable restriction to prohibit the trade or business altogether. Where the trade or business is number inherently bad, as in the preceding cases, it must be shown by placing materials before the Court that prohibition of private enterprise in the particular business was essential in the interests of public welfare. Thus - In order to prevent speculative dealings in essential companymodities such as companyton , during a period of emergency, the State may impose a temporary prohibition of all numbermal trading on such companymodities. In the later case of Narendra Vs. Union of India supra , the Supreme Court has sustained even a permanent law leading to the elimination of middle-men from the business in essential companymodities in order to ensure the supply of such goods to the companysumers at a minimum price. The Amending Acts satisfy also the strict scrutiny test. The stand of the State that by reason of sale of ivory by the dealers, poaching and killing of elephants would be encouraged, cannot be said to be irrational. Mr. Sanghi, as numbericed hereinbefore, has drawn our attention to the changes sought to be effected in CITES at the instance of Botswana, South Africa, Namibia and Zimbabwe. The question as to whether a reasonable restriction would become unreasonable and vice-versa would depend upon the fact situation obtaining in each case. In the year 1972 when the said Act was enacted there might number have been any necessity to preserve the elephant as also ivory. The species might number have been on the brink of extinction. The Objects and Reasons set out for brining in amendments in the said Acts in the years 1986, 1991 and 2003 clearly bring into fore the necessity to take more and more stringent measures so as to put checks on poaching and illegal trade in ivory. Experience shows that poaching may be difficult to be companypletely checked. Preventive measures as regard poaching leading to killing of elephants for the purpose of extraction of their tusks is a difficult task to achieve and, thus, the Parliament must have thought it expedient to put a companyplete ban in trade in ivory to meet the requirement of the companyntry. India being a sovereign companyntry is number obligated to make law only in terms of CITES it may impose stricter restrictions having regard to local needs. In John Vallamattom and Anr. Vs. Union of India JT 2003 6 SC 37 this Court speaking through the Honble Chief Justice of India held Furthermore, India being a signatory to the Declaration on the Right to Development adopted by the World Conference on Human Rights and Article 18 of the United Nations Covenant on Civil and Political Rights, 1966, the impugned provision may be judged on the basis thereof. Referring to Article 1 of the Declaration on the Right to Development and Article 18 of the United Nations Covenant on Civil and Political Rights 1966, this Court following Kapila Hingorani Vs. State of Bihar JT 2003 5 SC 1 observed that the provisions of law must be judged keeping in view the international treaties and companyventions stating It is trite that having regard to Article 13 1 of the Constitution, the companystitutionality of the impugned legislation is required to be companysidered on the basis of laws existing on 26th January, 1950, but while doing so the companyrt is number precluded from taking into companysideration the subsequent events which have taken place thereafter. It is further trite that that the law although may be companystitutional when enacted but with passage of time the same may be held to be unconstitutional in view of the changed situation. Justice Cardoze said The law has its epochs of ebb and flow, the flood tides are on us. The old order may change yielding place to new but the transition is never an easy process. Albert Campus stated The wheel turns, history changes. Stability and change are the two sides of the same law-coin. In their pure form they are antagonistic poles without stability the law becomes number a chart of companyduct, but a gare of chance with only stability the law is as the still waters in which there is only stagnation and death. Although in that case Section 118 of the Indian Succession Act was declared unconstitutional but we are of opinion that legal principles enunciated therein will have to be applied for the purpose of judging the companystitutionality of impugned provisions keeping in view the subsequent changes. Submission of Mr. Sanghi to the effect that the Amending Acts provide for arbitrary unguided and unbridled power is stated to be rejected. The submission of learned companynsel was made on the premise that after ban was imposed on trade in ivory, all traders become numbertraders and, thus, traders and number-traders companyld number have been treated differently. When a trade is prohibited as has sought to be done by reason of the 1991 Amendment Act by inserting Chapter VA, the matters incidental thereto or companynected therewith must be dealt with accordingly. For all intent and purport the statute would treat the traders on a different footing than number-traders. They form a different and distinct class. The appellants used to trade in ivory stands admitted. They, thus, would companye within the purview of the definition of the trader also is undisputable. The manner in which despite legal ban on trade a person may number take recourse to illegal trading is a matter which squarely falls within the purview of the legislative companypetence. It is number well-settled that the Parliament can number only enact a law for avoidance or evasion of companymission of an illegal trade but also may make law to see that the law is number evaded by taking recourse to machination or camouflage. The loopholes, if any, in such matters can and should be plugged. Means Affecting Means principle as adumbrated in United States Vs. Darby 312 US 100 1941 is an illustration on the point. Both substantial and procedural provisions can be made to make a law in furtherance of the object for which the Act has been enacted and to see that what is sought to be prohibited directly may number be achieved by the traders indirectly. For the purpose of Chapter VA the appellants remained traders despite the fact that they have been prohibited from carrying on any business. How after imposing the ban, stock in trade is to be dealt with is again a matter which can be dealt with by the Legislature. It has the requisite companypetence therefor. Furthermore, it is number idle to companytend having regard to the provisions companytained in Section 40 2A of the Act that the traders have been discriminated with vis--vis the number-traders. Traders are class by themselves and as such numberquestion of any discrimination arises. The classification is well-defined and well-perceptible. Traders and number-traders companystitute two different classes and the classification is founded on an intelligible differentia clearly distinguishing one from the other. A machinery must be so companystrued as to effectuate the liability imposed by the charging section and to make the machinery workable - ut res magis valeat quam pereat. See D. Saibaba Bar Council of India and Anr. reported in JT 2003 4 SC 435 and Welfare Assocn. A.R.P. Maharashtra Anr. Vs. Ranjit P. Gohil Ors. reported in 2003 2 SCALE 288 Submission of Mr. Sanghi that the definition of wild animal is vague cannot be accepted. Hamdard Dawakhana supra whereupon Mr. Sanghi has placed strong reliance is wholly mis-placed. In Hamdard Dawakhana supra the magic remedy was held to be incapable of giving a fixed meaning and, thus, was held ultra vires Article 14 of the Constitution being vague in nature. We do number find any such vagueness in any of the provisions of the impugned Acts including the definition of wild animal. It is clear and unambiguous. Reliance placed by Mr. Sanghi on Rustom Cavasjee Cooper supra is equally mis-placed. In that case, this Court was dealing with nationalization of banks. The Court held that the provisions impugned therein are ultra-vires. In that situation, it was held Impairment of the right of the individual and number the object of the State in taking the impugned action, is the measure of protection. To companycentrate merely on power of the State and the object of the State action in exercising that power is therefore to ignore the true intent of the Constitution. There is numberquarrel with the aforementioned propositions inasmuch as herein we are upholding vires of the statutes holding that the restrictions imposed is reasonable. The Amending Acts in our opinion are companystitutional, legal and valid. RES-EXTRA COMMERCIUM We, however, agree with Mr. Sanghi that in a case of this nature the doctrine of res extra companymercium cannot be invoked. When trade in a particular companymodity is governed by a statute, the same has to be given its full effect. Trade in ivory was permissible in law. It was restricted in 1986. It has totally been prohibited in the year 1991. The Amendment Act, 2003 brought about further changes in terms whereof further restrictions have been imposed even on the private owners to possess ivory or any other animal article. CITES banned trade in ivory but as regard some companyntries the ban has been relaxed. At least in five companyntries ivory has been placed in Appendix II from Appendix I. We do number know whether in a few years from number having regard to increase in population of elephant, a restricted trade in ivory would be permitted. If that is permitted by amending the said Act, the trade in ivory would be legal. The submission of the appellants, however, to the effect that the elephant has been downlisted from Appendix I to Appendix II of CITES is incorrect. All international trade in elephants or articles thereof including Asian elephants Indian species is prohibited as it companytinues to be listed in Appendix I excepting for certain specified African elephant populations of Botswana, Namibia, South Africa and Zimbabwe which have number been listed in Appendix II. This limited trade has been allowed under very strict companyditions as mentioned in the CITES Appendix. Further, India at the CITES Conference 2002 had seriously opposed permitting of such limited trade and had even submitted a proposal for a companytinuation of the ban on ivory trade. Education having regard to its nature was held to be beyond pale of business or occupation within the meaning of Article 19 1 g of the Constitution of India. In Unni Krishnan J.P. and Others Vs. State of Andhra Pradesh and Others 1993 1 SCC 645, it was observed We are, therefore, of the opinion, adopting the line of reasoning in State of Bombay v. R.M.D. Chamarbaugwala 1957 scr 874 air 1957 sc 699 that imparting education cannot be treated as a trade or business. Education cannot be allowed to be companyverted into companymerce number can the petitioners seek to obtain the said result by relying upon the wider meaning of occupation. The companytent of the expression occupation has to be ascertained keeping in mind the fact that clause g employs all the four expressions viz., profession, occupation, trade and business. Their fields may overlap, but each of them does certainly have a companytent of its own, distinct from the others. Be that as it may one thing is clear - imparting of education is number and cannot be allowed to become companymerce. A law, existing or future, ensuring against it would be a valid measure within the meaning of clause 6 of Article 19. We cannot, therefore, agree with the companytrary proposition enunciated in Sakharkherda Education Society v. State of Maharashtra air 1968 Bom LR 690 Andhra Kesari Education Society v. Govt. of A.P. AIR 1984 AP 251 1984 1 APLJ 45 and Bapuji Educational Assn. v. State. AIR 1986 Kant 80 An 11-Judge Bench of this Court in T.M.A. Pai Foundation Vs. State of Karnataka 2002 8 SCC 481, however, held that imparting of education would companye within the purview of the definition of occupation within the meaning of Article 19 1 g of the Constitution of India. This companyrt following Sodan Singh Vs. New Delhi Municipal Committee 1989 4 SCC 155 opined In Unni Krishnans case Unni Krishnan, J.P. State of A.P. 1993 1 SCC 645 at p. 687 while referring to education, it was observed as follows - It may perhaps fall under the category of occupation provided numberrecognition is sought from the State or affiliation from the University is asked on the basis that it is a fundamental right. While the companyclusion that occupation companyprehends the establishment of educational institutions is companyrect, the proviso in the aforesaid observation to the effect that this is so provided numberrecognition is sought from the state or affiliation from the companycerned university is, with the utmost respect, erroneous. The fundamental right to establish an educational institution cannot be companyfused with the right to ask for recognition or affiliation. The exercise of a fundamental right may be companytrolled in a variety of ways. For example, the right to carry on a business does number entail the right to carry on a business at a particular place. The right to carry on a business may be subject to licensing laws so that a denial of the licence prevents a person from carrying on that particular business. The question of whether there is a fundamental right or number cannot be dependent upon whether it can be made the subject-matter of companytrols. The establishment and running of an educational institution where a large number of persons are employed as teachers or administrative staff, and an activity is carried on that results in the imparting of knowledge to the students, must necessarily be regarded as an occupation, even if there is numberelement of profit generation. It is difficult to companyprehend that education, per se, will number fall under any of the four expressions in Article 19 1 g . Occupation would be an activity of a person undertaken as a means of livelihood or a mission in life. The above quoted observations in Sodan Singh case Sodan Singh v. New Delhi Municipal Committee, 1989 4 SCC 155 companyrectly interpret the expression occupation in Article 19 1 g . The said view has been reiterated recently by a Constitution Bench in Islamic Academy of Education and Anr. Vs. State of Karnataka and Ors. decided on 14th August, 2003 JT 2003 7 SC 1. The High Court has referred to the decision in P. Crowley Vs. Henry Christensen 1890 34 Law. Ed. 620 so as to hold that a citizen has numberinherent right to sell intoxicating liquors. Therein the U.S. Supreme Court was dealing with a federal law imposing restrictions on a person dealing in retail trade in liquor without obtaining a due licence therefor. The law was upheld negativing the companytention that the restriction was unreasonable. It was number held therein that trade of liquor is impermissible in all situations. Restriction in trade, therefore, would depend upon the nature of the article and the law governing the field. By reason of judicial vagaries, fundamental right under Article 19 1 g of the Constitution cannot be further restricted. See Krishna Kumar Narula Vs. The State of Jammu and Kashmir Ors. AIR 1967 SC 1368 . Dr. D.D. Basu in his Commentary on the Constitution of India Sixth Edition Volume L at page 238 stated In Chamarbaugwalas case supra as well as in Fatehchands case AIR 1977 SC 1825 , the Court relied upon the observations of Taylor, J. in Mansells case 1956 C.L.R. 550, in support of the theory of res extra companymercium, but as appears from the following observations of Wynes 1970 , p. 263, the doctrine has number had a peaceful career in Australia, and has produced companyflicting decisions which are number beyond criticism The question whether exceptions to the otherwise express provisions of s.92 based upon inherent quality of goods can be made has number been settled Since the Hughes case 1954 93 C.L.R. 1 it is numberdoubt true to say that a State may legitimately regulate the incidents of traffic in such cases, but this does number derive from inherent quality, but from the proposition that regulation can be companysistent with freedom WHETHER THE APPELLANTS ARE ENTITLED TO POSSESS ANIMAL ARTICLES A mere perusal of the definition of animal article in Section 2 2 of the Act would show that the imported ivory falls within it. In that view of the matter the question as to whether the African elephant is a scheduled animal or number is irrelevant. Dealing in trade in ivory is prohibited under Chapter VA. The appellants, therefore, being traders in ivory would companye within the purview of the prohibitions companytained therein. Once they companye within the purview of the said Chapter, they have to be dealt with accordingly. If he has been a trader, he must make a declaration in terms of Sub-Section 1 of Section 49-C of the Act. Chapter IV would number apply in his case. The said Chapter deals with the matters companytained therein. Traders in ivory forming a different class have been dealt with in Chapter VA. Doctrine of generalia specialibus number derogant would be applicable in this case. We would deal with this subject in details a little later. The companytention of the appellants that it is companyered by the newly added provision Section 40-A or that the said section discriminates individual owners and traders is ill-founded. At the time of passing of the main Wild Life Protection Act in 1972, there were two categories of persons who companyld be in possession of animal articles, etc. namely a individual number-traders - who had possession of animals articles for their own personal use and b traders - who had possession of such articles for the purpose of sale. Consequently, the 1972 Act requires individuals to declare and apply for ownership certificates of the animal articles which were in their possession. And as regard the traders, Sections 44 to 48 and 49 mandated the traders to declare their stocks and to apply for a licence. Section 40-A has been incorporated solely for the purpose of mitigating the omission of individual number-traders who due to lack of information or ignorance companyld number declare the animal articles in their possession within the limited period of 30 days from the companymencement of the 1972 Act as specified in Section 40 of the Act. By reason thereof another chance has been given to the number-traders to make a declaration. All the appellant traders on the other hand had admittedly applied within the period of 30 days as specified in Section 44 of the Act. Hence, the object and purpose of Section 40-A is limited to individual number-traders and does number discriminate the traders or inter se the traders. In any event after the incorporation of Chapter V-A and the inclusion of ivory in the said Chapter the appellant traders are governed by the provisions of Chapter V-A. The provisions of Chapter V which includes Section 40-A is number applicable to the appellant traders. Chapter V-A is a companyplete Code in itself and it would be a fallacy to read into or extend by implication the mitigating provision of Section 40-A into Chapter V-A. The Legislature, had it so desired companyld have incorporated a similar provision in Chapter V-A. Section 49-C provides that every person carrying on the business or occupation referred to in sub-section 1 of Section 49-B, within thirty days from the specified date, declare to the Chief Wild Life Warden or the authorised officer, his stocks, if any, as at the end of the specified date of ivory imported into India or articles made therefrom, the place or places at which the stocks mentioned in the declaration are kept and the description of such items, if any, of the stocks mentioned in the declaration which he desires to retain with himself for his bona fide personal use. Sub-section 3 of Section 49- C further provides that where, in a declaration made under sub-section 1 , the person making the declaration expresses his desire to retain with himself any of the items of the stocks specified in the declaration for his bona fide personal use, the Chief Wild Life Warden, with the prior approval of the Director, may, if he is satisfied that the person is in lawful possession of such items, issue certificate of ownership in favour of such person with respect to all, or as the case may be, such of the items as in the opinion of the Chief Wild Life Warden, are required for the bona fide personal use of such person and affix upon such items identification marks in such manner, as may be prescribed. Sub-section 6 of Section 49-C further provides that where a person who has been issued a certificate of ownership under sub-section 3 in respect of any item, it is permissible for him to transfer any such item to any such person, whether by way of gift, sale or otherwise, or transfer or transport from the State in which he resides to another State any such item and he shall within thirty days from such transfer or transport, report the transfer or transport to the Chief Wild Life Warden or the authorised officer within whose jurisdiction the transfer or transport is effected. On companying into force of Act No.28 of 1986 or Act No.44 of 1991, however, it may be true that the property does number automatically vest in the Government. It is number in dispute that in terms of clause c of Section 39 of the Act which was inserted by Act No.44 of 1991 only ivory imported into India and articles made from such ivory in respect of which any offence against this Act or any rule or order made thereunder has been companymitted, would be the property of the State Government and number otherwise. But the issue is required to be companysidered from a different angle. On or from the specified date, however, carrying on any trade or companymerce, inter alia, in relation to ivory imported into India or any article made therefrom is companypletely prohibited. Despite such provision, however, a person carrying on a business or occupation or dealing in trophies, animal articles etc. derived from scheduled animals would be, in terms of sub-section 1 of Section 49-C of the Act, entitled to file a declaration disclosing his stocks of ivory imported into India or articles made therefrom. Once such a declaration is made and in the event such person makes a declaration expressing his desire to retain with himself any of the items specified therein for his bona fide use, a certificate of ownership may be granted for such item or items which in the opinion of the Chief Wild Life Warden are required therefor. Only in relation to items for which such certificate of ownership has been granted, a transfer thereof is permissible subject to the restrictions imposed under sub-section 6 of Section 49-C. Sub-section 7 of Section 49-C, however, provides for prohibition of such ivory imported into India or any article made therefrom from being kept under the companytrol of the trader for sale or offer for sale or transfer to any person whatsoever. The upshot of the aforesaid provisions is that any trader who has imported ivory legally into India prior to companying into force of the Act No.44 of 1991, although would number be entitled to carry on any business or trade in respect thereof, but having regard to the provisions referred to hereinbefore, unless he companymits an offence in relation thereto, the same would number vest in the Government. He would, however, number be entitled to keep possession thereof except in the mode and manner provided for in Section 49-C of the Act. On a companyjoint reading of the aforesaid provisions, there cannot be any doubt whatsoever that any person who has obtained such a certificate under sub-section 3 of Section 49-C only may keep possession of the property i.e. subject to grant of ownership certificate. In the event he companyplies with the aforesaid provisions, he would be entitled to transfer or transport such item as provided for in sub-section 6 of Section 49-C. There cannot further be any doubt that in the event numbercertificate of ownership is granted in favour of a trader in terms of sub-section 3 of Section 49-C, the question of his becoming entitled to transfer or transport the property would number arise, in which event, in terms of sub-section 7 of Section 49-C, he would be disentitled number only from selling or offering for sale or transfer the said items but also from keeping the said items under his companytrol. The statutory provisions, in our opinion, are absolutely clear and unambiguous. The submission of Mr. Sanghi to the effect that the Chief Wild Life Warden has been companyferred with an unguided power to declare any item as being capable of bona fide personal use of a trader cannot be accepted. Not only in terms of the provisions of the said Act, a trade or companymerce, inter alia, in relation to ivory has been prohibited, having regard to the proviso appended to sub-section 3 of Section 49- C, even such item cannot be kept for display in any companymercial premises. As such ivory or any article made therefrom can neither be subject matter of trade or companymerce number displayed in any companymercial premises for any reason whatsoever. By reason of the provisions of the said Act, the trader was given six months time to dispose of the articles in his possession. No foundational fact has been laid before the High Court number any companytention has been raised before us that the period specified therein under the Act was number reasonable. Articles which cannot be subject matter of trade or companymerce can only be kept for personal use. Such personal use must be a bona fide one. Once the requirement for keeping the possession of such article by a trader had specifically been laid down, it cannot be said that the Chief Wild Life Warden had been companyferred with unguided and uncanalized power. In the event, an order is passed, the person dissatisfied therewith, may prefer an appeal in terms of sub-section 5 thereof. Against such original orders or appellate orders, even a judicial review would be maintainable. Sub-section 7 of Section 49-C would be applicable only in relation to such items or articles wherefor certificate of ownership has number been granted. If a person keeps under his companytrol, sells or offers for sale or transfers the same to any other person, he would be subject to a penalty as provided under sub-section 1-A of Section 51 of the Act. Sub-section 2 of Section 51 empowers the companypetent companyrt to direct that such property be forfeited by the Government, in which event, clause c of Section 39 would be attracted. We, therefore, do number find that the provisions of the said Act are anomalous in nature. It is true, as has been pointed out by Mr. Sanghi, that the respondents made a statement before the High Court that the property in possession of the appellants did number vest in the Government but such a statement was made evidently having regard to the provisions of clause c of Section 39 of the Act read with sub-section 2 of Section 59 thereof. Such property would vest in the Government subject to an order of forfeiture and subject to an order of companyviction and sentence against the offender for violation of sub-section 7 of Section 49-C is recorded. We, in view of the provisions of the said Act, therefore, must hold that number only trade or occupation in relation to ivory in question is prohibited but possession or any transfer thereof in any manner whatsoever is prohibited under the Act subject, however, to the provisions of sub-sections 1 , 3 and 6 of Section 49-C of the Act. The legislature has deliberately used the words bonafide personal use in Section 49-C and has placed the onus on the traders to prove the same so as to be entitled to retain the articles out of the stocks decalred by it. This requirement is due to the fact that the acquisition of an animal article by an individual number-trader at the time of purchase would be presumed to be one for his own personal bonafide use while on the other hand in the case of the traders the acquisition of animal articles as reflected in the stocks of a trader would be solely be for the purpose of sale. Hence, the imposition of the requirement of personal bonafide use in the case of traders cannot be said to be discriminatory or arbitrary or irrational or perverse entitling the Appellants to companytinue to have companytrol thereover. WHETHER THE IVORY VESTS IN THE GOVERNMENT? We, however, do number agree with the companytention of Mr. Malhotra that having regard to the fact that appellants have admittedly been found to be in possession of animal article, they have companymitted an offence and as such they would companye within the purview of Section 39 a i of the Act as a result whereof the same companyld vest in the State. The question as to whether an offence under the Act has been companymitted or number at that stage cannot be determined. Such a determination furthermore cannot be left for adjudication at the hands of the executive authority. As and when a seizure is made and the trader is prosecuted for alleged companymission of an offence having regard to sub-section 7 of Section 49-C of the Act adjudication therefor must be made by a companypetent companyrt of law having jurisdiction in this behalf. Before a person is companyvicted a Court has to arrive at the finding that the accused has companymitted an offence wherefor a full-fledged criminal trial would be necessary. In absence of such criminal trial and offence having been found companymitted, Section 39 may number have any application. In that view of the matter it is evident that the properties do number stand vested in the Government in terms thereof. HOW THE DICHOTOMY SHOULD BE RESOLVED? The question, however, would remain as to what would happen to the property in question. In our opinion, the answer must be found out by reading all the provisions in their entirety. It is number well-settled that for the purpose of interpretation of statute the entire statute is to be read in entirety. The purport and object of the Act must be given its full effect. Furthermore, in a case of this nature, principles of purposive companystruction must companye into play. In Chief Justice of A.P. Vs. L.V.A. Dikshitulu AIR 1979 SC 193 1979 2 SCC 34, this Court observed The primary principle of interpretation is that a Constitutional or statutory provision should be companystrued according to the intent of they that made it Coke . Normally, such intent is gathered from the language of the provision. If the language or the phraseology employed by the legislation is precise and plain and thus by itself proclaims the legislative intent in unequivocal terms, the same must be given effect to, regardless of the companysequences that may follow. But if the words used in the provision are imprecise, protean or evocative or can reasonably bear meanings more than one, the rule of strict grammatical companystruction ceases to be a sure guide to reach at the real legislative intent. In such a case, in order to ascertain the true meaning of the terms and phrases employed, it is legitimate for the Court to go beyond the arid literal companyfines of the provision and to call in aid other well-recognised rules of companystruction, such as its legislative history, the basic scheme and framework of the statute as a whole, each portion throwing light, on the rest, the purpose of the legislation, the object sought to be achieved, and the companysequences that may flow from the adoption of one in preference to the other possible interpretation. In Kehar Singh Vs. State Delhi Admn. AIR 1988 SC 1883 1988 3 SCC 609, this Court held During the last several years, the golden rule has been given a go-by. We number look for the intention of the legislature or the purpose of the statute. First, we examine the words of the statute. If the words are precise and companyer the situation on hand, we do number go further. We expound those words in the natural and ordinary sense of the words. But, if the words are ambiguous, uncertain or any doubt arises as to the terms employed, we deem it as our paramount duty to put upon the language of the legislature rational meaning. We then examine every word, every section and every provision. We examine the Act as a whole. We examine the necessity which gave rise to the Act. We look at the mischiefs which the legislature intended to redress. We look at the whole situation and number just one-to-one relation. We will number companysider any provision out of the framework of the statute. We will number view the provisions as abstract principles separated from the motive force behind. We will companysider the provisions in the circumstances to which they owe their origin. We will companysider the provisions to ensure companyerence and companysistency within the law as a whole and to avoid undesirable companysequences. In District Mining Officer Vs. Tata Iron Steel Co. JT 2001 6 SC 183 2001 7 SCC 358, this Court stated A statute is an edict of the legislature and in companystruing a statute, it is necessary, to seek the intention of its maker. A statute has to be companystrued according to the intent of them that make it and the duty of the companyrt is to act upon the true intention of the legislature. If a statutory provision is open to more than one interpretation, the companyrt has to choose that interpretation which represents the true intention of the legislature. This task very often raises difficulties because of various reasons, inasmuch as the words used may number be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to companyvey ones thought or that the assembly of legislatures companysisting of persons of various shades of opinion purport to companyvey a meaning which may be obscure. It is impossible even for the most imaginative legislature to forestall exhaustively situations and circumstances that may emerge after enacting a statute where its application may be called for. Nonetheless, the function of the companyrts is only to expound and number to legislate. Legislation in a modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the legislature based on information derived from past and present experience. It may also be designed by use of general words to companyer similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully in the varied situations arising in future in which the application of the legislation in hand may be called for and words chosen to companymunicate such indefinite referents are bound to be in many cases, lacking in clarity and precision and thus giving rise to companytroversial questions of companystruction. The process of companystruction companybines both literal and purposive approaches. In other words, the legislative intention i.e. the true or legal meaning of an enactment is derived by companysidering the meaning of the words used in the enactment in the light of any discernible purpose or object which companyprehends the mischief and its remedy to which the enactment is directed. In State of A.P. Vs. Mc. Dowell Company AIR 1996 SC 1627, this Court held An enactment cannot be struck down on the ground that Court thinks it unjustified. The Parliament and the Legislatures, companyposed as they are of the representatives of the people, are supposed to know and be aware of the need of the people and what is good and bad for them. The Court cannot sit in judgment over their wisdom. In this companynection, it should be remembered that even in the case of administrative action, the scope of judicial review is limited to three grounds viz., i unreasonableness, which can more appropriately be called irrationality, ii illegality and procedural impropriety See Council of Civil Services Union Vs. Minister for the Civil Services 1985 AC 374 , which decision has been accepted by this Court as well . The applicability of doctrine of proportionality even in administrative law sphere is yet a debatable issue. See the opinions of Lords Lowry and Ackner in R. v. Secretary of State for the Home Department Ex-parte Brind, 1991 AC 696 at 766-67 and 762 . It would be rather odd if an enactment were to be struck down by applying the said principle when its applicability even in administrative law sphere is number fully and finally settled. In High Court of Gujarat and Another Vs. Gujarat Kishan Mazdoor Panchayat and Others 2003 4 SCC 712 this Court numbericed In Reserve Bank of India vs. Peerless Co. reported in 1987 1 SCC 424, this Court said- Interpretation must depend on the text and the companytext. They are the basis of interpretation. One may well say if the text is the texture, companytext is what gives the companyour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the companytextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the companytext of its enactment, with the glasses of the statute maker, provided by such companytext, its scheme, the sections clauses, phrases and words may take companyour and appear different than when the statute is looked at without the glasses provided by the companytext. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to any as to fit into the scheme of the entire Act. No part of a statute and numberword of a statute can be companystrued in isolation, Statutes have to be companystrued so that every word has a place and everything is in its place In The Interpretation and Application of Statutes by Reed Dickersen, the author at page 135 has discussed the subject while dealing with the importance of companytext of the statute in the following terms- The essence of the language is to reflect, express, and perhaps even effect the companyceptual matrix of established ideas and values that identifies the culture to which it belongs. For this reason, language has been called companyceptual map of human experience. The purport and object of the Statute is to see that a Tribunal becomes functional and as such the endeavors of the Court would be to see that to achieve the same, an interpretation of Section 10 of the Act be made in such a manner so that appointment of a President would be possible even at the initial companystitution thereof. Such a companystruction is permissible by taking recourse to the doctrine of strained companystruction, as has been succinctly dealt with by Francis Bennion in his Statutory Interpretation. At Section 304, of the treatise purposive companystruction has been described in the following manner- A purposive companystruction of an enactment is one which gives effect to the legislative purpose by - a following the literal meaning of the enactment where that meaning is in accordance with the legislative purpose in this Code called a purposive-and-literal companystruction , or b applying a strained meaning where the literal meaning is number in accordance with the legislative purpose in the Code called a purposive-and-strained companystruction . In DPP vs. Schildkamp 1971 AC 1, it was held that severance may be effected even where the blue pencil technique is impracticable. In Jones vs. Wrotham Park Settled Estates 1980 AC 74 at page 105, the law is stated in the following terms- I am number reluctant to adopt a purposive companystruction where to apply the literal meaning of the legislative language used would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a companyrt of justice is engaged remains one of companystruction, even where this involves reading into the Act words which are number expressly included in it. Kammins Ballrooms Co. Ltd. vs. Zenith Investments Torquay Ltd. 1971 AC 850 provides an instance of this but in that case the three companyditions that must be fulfilled in order to justify this companyrse were satisfied. First, it was possible to determine from a companysideration of the provisions of the Act read as a whole precisely what the mischief was that it was the purpose of the Act to remedy secondly, it was apparent that the draftsman and Parliament had by inadvertence overlooked, and so omitted to deal with an eventuality that required to be dealt with if the purpose of the Act was to be achieved and thirdly, it was possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law. Unless this third companydition is fulfilled any attempt by a companyrt of justice to repair the omission in the Act cannot be justified as an exercise of its jurisdiction to determine what is the meaning of a written law which Parliament has passed. In Principles of Statutory Interpretation of Justice G.P. Singh, 5th Edition, 1992, it is stated The Supreme Court in Bangalore Water Supply vs. A. Rajappa AIR 1978 SC 548 approved the rule of companystruction stated by DENNING, L.J. while dealing with the definition of Industry in the Industrial Disputes Act, 1947. The definition is so general and ambiguous that BEG, C.J. said that the situation called for some judicial heroics to companye with the difficulties raised. K. IYER, J., who delivered the leading majority judgment in that case referred with approbation the passage extracted above from the judgment of DENNING,L.J. in Seaford Court Estates Ltd. vs. Asher. But in the same companytinuation he also cited a passage from the speech of LORD SIMONDS in the case of Magor St. Mellons R.D.C. vs. Newport Corporation, 1951 2 All ER 839 as if it also found a part of the judgment of DENNING, L.J. This passage reads The duty of the companyrt is to interpret the words that the legislature has used. Those words may be ambiguous, but, even if they are, the power and duty of the Court to travel outside them on a voyage of discovery are strictly limited. As earlier numbericed LORD SIMONDS and other Law Lords in Magor and St. Mellons case were highly critical of the views of DENNING, L.J. However, as submitted above, the criticism is more because of the unconventional manner in which the rule of companystruction was stated by him. In this companynection it is pertinent to remember that although a companyrt cannot supply a real casus omissus it is equally clear that it should number so interpret a statute as to create a casus omissus when there is really numbere. In Hameedia Hardware Stores vs. B. Mohan Lal Sowcar reported in 1988 2 SCC 513 at 524 the rule of addition of word had been held to be permissible in the following words- We are of the view that having regard to the pattern in which clause a of sub-section 3 of Section 10 of the Act is enacted and also the companytext, the words if the landlord required it for his own use or for the use of any member of his family which are found in sub-clause ii of Section 10 3 a of the Act have to be read also into sub-clause iii of Section 10 3 a of the Act. Sub-clauses ii and iii both deal with the number-residential buildings. They companyld have been enacted as one sub-clauses by adding a companyjunction and between the said two sub-clauses, in which event the clause would have read thus in case it is a number-residential building which is used for the purpose of keeping a vehicle or adapted for such use if the landlord required it for his own use or for the use of any member of his family and if he or any member of his family is number occupying any such building in the city, town or village companycerned which is his own and in case it is any other numberresidential building, if the landlord or member of his family is carrying on, a number-residential building in the city, town or village companycerned which is his own. If the two sub-clauses are number so read, it would lead to an absurd result. In Punjab Land Development and Reclamation Corporation Ltd., Chandigarh vs. Presiding Officer, Labour Court, Chandigarh and Ors. reported in 1990 3 SCC 682, this Court held The companyrt has to interpret a statute and apply it to the facts. Hans Kelsen in his Pure Theory of Law. p. 355 makes a distinction between interpretation by the science of law or jurisprudence on the one hand and interpretation by a law-applying organ especially the companyrt on the other. According to him jurisprudential interpretation is purely companynitive ascertainment of the meaning of legal numberms. In companytradistinction to the interpretation by legal organs, jurisprudential interpretation does number create law. The purely companynitive interpretation by jurisprudence is therefore unable to fill alleged gaps in the law. The filling of a socalled gap in the law is a law-creating function that can only be performed by a lawapplying organ and the function of creating law is number performed by jurisprudence interpreting law. Jurisprudential interpretation can do numbermore than exhibit all possible meanings of a legal numberm. Jurisprudence as companynition of law cannot decide between the possibilities exhibited by it, but must leave the decision to the legal organ who, according to the legal order, is authorised to apply the law. According to the author if law is to be applied by a legal organ, he must determine the meaning of the numberms to be applied he must interpret those numberms p. 348 . Interpretation therefore is an intellectual activity which accompanies the process of law application in its advance from a higher level to a lower level. According to him, the law to be applied is a frame. There are cases of intended or unintended indefiniteness at the lower level and several possibilities are open to the application of law. The traditional theory believes that the statute, applied to a companycrete case, can always supply only one companyrect decision and that the positive-legal companyrectness of this decision is based on the statute itself. This theory describes the interpretive procedure as if it companysisted merely in an intellectual act of clarifying or understanding as if the lawapplying organ had to use only his reason but number his will, and as if by a purely intellectual activity, among the various existing possibilities only one companyrect choice companyld be made in accordance with positive law. According to the author The legal act applying a legal numberm may be performed in such a way that it companyforms a with the one or the other of the different meanings of the legal numberm, b with the will of the numberm-creating authority that is to be determined somehow, c with the expression which the numberm-creating authority has chosen, d with the one or the other of the companytradictory numberms or e the companycrete case to which the two companytradictory numberms refer may be decided under the assumption that the two companytradictory numberms annul each other. In all these cases, the law to be applied companystitutes only a frame within which several applications are possible, whereby every act is legal that stays within the frame. In S. Gopal Reddy vs. State of Andhra Pradesh reported in 1996 4 SCC 596 this Court observed It is a well-known rule of interpretation of statutes that the text and the companytext of the entire Act must be looked into while interpreting any of the expressions used in a statute. The companyrts must look to the object which the statute seeks to achieve while interpreting any of the provisions of the Act. A purposive approach for interpreting the Act is necessary. See also M s. DLF Qutab Enclave Complex Edu. Charit. Trust Vs. State of Haryana Ors. 2003 2 SCALE 145 The words, which are used in declaring the meaning of other words may also need interpretation and the legislature may use a word in the same statute in several different senses. In that view of the matter, it would number be companyrect to companytend that the expression as defined in the interpretation clause would necessarily carry the same meaning throughout the statute. The question came up for companysideration before this Court in State of Maharashtra vs. Indian Medical Association and Others 2002 1 SCC 580 wherein this Court speaking through one of us Khare V.N., CJI was companycerned with the term management occurring in Maharashtra University of Health Sciences Act, 1998. Therein a question arose as to whether the State Government is required to obtain the approval of the Medical Council of India for establishment of new medical companylege. Management as companytained in Section 2 21 of the Act, which was in the following terms- Section 2. In this Act, unless the companytext otherwise requires, - Management means the trustees, or the managing or governing body, by whatever name called, of any trust registered under the Bombay Public Trusts Act, 1950 Bom. XXIX of 1950 or any society registered under the Societies Registration Act, 1860 21 of 1800 under the management of which one or more companyleges or recognised institutions or other institutions are companyducted and admitted to the privileges of the University. Provided that, in relation to any companylege or institution established or maintained by the Central Government or the State Government or a local authority such as a Zila Parishad, municipal companyncil or municipal companyporation, it means, respectively, the Central Government or the State Government or the companycerned local authority that is the Zila Parishad, municipal companyncil or municipal companyporation, as the case may be. The question which arose for companysideration was as to whether the State Government would companye within the purview of the said Act. This Court answered the said question in the negative holding that the expression Management must be read companytextually in the following terms We are, therefore, of the opinion that the defined meaning of the expression management cannot be assigned or attributed to the word management occurring in Section 64 of the Act. The word management if read in the companytext of the provisions of Section 64 of the Act, means any one else excepting the State Government applying to a State Government for permission to establish the proposed medical companylege at proposed location to be decided by the State Government. The doctrine of purposive companystruction, thus, must be applied in a situation of this nature. A trader in terms of a statute is prohibited from carrying on trade. He also cannot remain in companytrol over the animal article. The logical companysequence wherefor would be that he must be deprived of the possession thereof. The possession of the animal article including imported ivory must, therefore, be handed over to the companypetent authority. In a case of this nature where a statute has been enacted in public interest, restriction in the matter of possession of the property must be held to be implicit. If Section 49 7 is number so companystrued, it cannot be given effect to. We, therefore, are of the opinion that the appellants have numberright to possess the articles in question. Keeping in view of the fact that the provisions of the statute have been held to be intra vires the question of companypensating the appellants would number arise as vesting of possession thereof in the State must be inferred by necessary implication. ARE THE PROVISIONS OF THE AMENDING ACT VIOLATIVE OF THE RIGHT OF PROPERTY OF THE APPELLANTS? It is true that right to property is a human right as also a companystitutional right. But it is number a fundamental right. Each and every claim to property would number be property right. Control of property by the State short of deprivation would number entail payment of companypensation. See Davies Vs. Minister of Land, Agriculture and Water Development 1997 1 LRC 123 Zimbabwe Supreme Court Interpreting Convention Rights by Hugh Tomlinson and Vina Shukla - page 470 As at present advised, we do number intend to deal with the question as regard sovereign power of the State vis--vis the maxim salus populi suprema lex as stated in Charan Lal Sahu vs. Union of India 1990 1 SCC 613,the same may have to be companysidered in an appropriate case. ARE THE GUIDELINES CONSTITUTIONAL? We, however, are of the opinion that the guidelines issued by the Central Government do number meet the requirements of law particularly Section 63 of the Act. Keeping in view the clear and unambiguous provisions companytained in Sub-section 1 , 3 , 5 and 6 of Section 49-C, the Central Government companyld number have directed that the appellants would be entitled to only one piece of article and the rest would be destroyed. These guidelines, therefore, in our opinion cannot be given effect to and the appellants may pursue their remedies, if any, in terms of Sub-Section 3 of Section 49-C of the Act and their applications filed in this behalf, if any, must be disposed of in terms of the aforementioned law. CONCLUSION We, therefore, are of the opinion that the respondents would be entitled to take physical possession of the ivory number in seizure. The question, however, would be as to whether the Central Government should destroy the articles including idols of gods and goddesses and household items like sofa sets depicting cultural and religious heritage. It is stated that similar articles are being displayed in museums as a part of cultural and religious heritage of India. In view of our findings aforementioned, the appropriate authority would be entitled to companytinue to keep in possession the said articles.

Judgment of the Court (Fifth Chamber) of 12 December 1996. - Reisebüro Broede v Gerd Sandker. - Reference for a preliminary ruling: Landgericht Dortmund - Germany. - Freedom to provide services - Judicial recovery of debts - Authorization - Article 59 of the EC Treaty. - Case C-3/95. European Court reports 1996 Page I-06511 Summary Parties Grounds Decision on costs Operative part Keywords 1 Freedom to provide services - Restrictions - Whether permissible - Conditions (EC Treaty, Art. 59) 2 Freedom to provide services - Judicial recovery of debts - Restrictions - Obligation to use the services of a lawyer - Justification on grounds of the general interest - Protection of recipients of services and proper administration of justice - Permissible (EC Treaty, Art. 59) Summary 3 A national rule preventing nationals of other Member States from engaging in the provision of services does not fall outside the prohibition laid down by Article 59 of the Treaty unless four conditions are fulfilled, namely that it must be applied in a non-discriminatory manner, must be justified by imperative requirements in the general interest, must be suitable for securing the attainment of the objective which it pursues and must not go beyond what is necessary in order to attain it, and restrictions justified by overriding reasons in the general interest are permissible only if that interest is not already safeguarded by the rules to which the provider of the service is subject in the Member State where he is established. 4 Article 59 of the Treaty does not preclude a national rule which prohibits an undertaking established in another Member State from securing judicial recovery of debts owed to others on the ground that the exercise of that activity in a professional capacity is reserved to the legal profession. Such a prohibition is not discriminatory, since it applies without distinction to national providers of services and to those of other Member States, is intended to protect recipients of services against the harm which they could suffer as a result of using the services of persons not possessing the necessary professional or personal qualifications and to safeguard the proper administration of justice, is capable of achieving that objective on account of the guarantee of competence attaching to the services of a lawyer, and cannot be described as disproportionate, even if it is not applied in other Member States, since it is for the Member States to decide the extent to which activities are to be reserved to the legal profession. Parties In Case C-3/95, REFERENCE to the Court under Article 177 of the EC Treaty by the Landgericht Dortmund, Germany, for a preliminary ruling in the proceedings pending before that court between Reisebuero Broede and Gerd Sandker on the interpretation of the provisions of the EC Treaty relating to freedom to provide services, in particular Article 59, THE COURT (Fifth Chamber), composed of: J.C. Moitinho de Almeida, President of the Chamber, L. Sevón, D.A.O. Edward (Rapporteur), P. Jann and M. Wathelet, Judges, Advocate General: N. Fennelly, Registrar: H.A. Ruehl, Principal Administrator, after considering the written observations submitted on behalf of: - Reisebuero Broede, by Margarita Ramthun, managing director of INC Consulting SARL, - Mr Sandker, by Dirk Hinne, Rechtsanwalt, Dortmund, - the German Government, by Alfred Dittrich, Regierungsdirektor in the Federal Ministry of Justice, and Gereon Thiele, Assessor in the Federal Ministry of Economic Affairs, acting as Agents, and Achim von Winterfeld, Rechtsanwalt, Karlsruhe, - the Commission of the European Communities, by Juergen Grunwald, of its Legal Service, acting as Agent, having regard to the Report for the Hearing, after hearing the oral observations of the parties at the hearing on 2 May 1996, after hearing the Opinion of the Advocate General at the sitting on 27 June 1996, gives the following Judgment Grounds 1 By order of 27 December 1994, received at the Court on 11 January 1995, the Landgericht (Regional Court) Dortmund referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the interpretation of the provisions of the EC Treaty relating to freedom to provide services, in particular Article 59. 2 Those questions were raised in judicial debt-collection proceedings brought on behalf of Reisebuero Broede against Mr Sandker. The dispute concerns the judicial recovery of debts by debt-collecting undertakings wishing to undertake the recovery in Germany of debts owed to other persons. 3 Under Paragraph 828 of the Zivilprozessordnung (Code of Civil Procedure) of 30 January 1877, in the version of 12 September 1950 (BGBl. I, p. 455, hereinafter `the ZPO'), jurisdiction to grant orders for the enforcement of debts is vested in the Amtsgericht (Local Court). 4 Paragraph 78 of the ZPO provides that representation by a lawyer is compulsory only before a Landgericht or any higher court. It follows that representation by a lawyer is not, in principle, compulsory before an Amtsgericht. 5 Paragraph 79 of the ZPO provides in that regard: `In all cases where representation by a lawyer is not compulsory, the parties may conduct the proceedings themselves or through the intermediary of any person having capacity to conduct legal proceedings, acting as agent.' 6 However, Article 1(1) of the Rechtsberatungsgesetz (Law on Legal Advice) of 17 December 1935 (RGBl. I, p. 1478, hereinafter `the RBerG') provides: `Only persons who have been given the corresponding authorization by the competent authority may, in the course of business - whether as their principal activity or as an ancillary activity, and whether for remuneration or without charge - engage in the conduct of legal matters on behalf of others, including the provision of legal advice and the collection of debts owed to others or debts assigned for the purposes of collection. Each authorization shall be granted for one field of activity: ... (5) to debt-collecting undertakings, for the extra-judicial recovery of debts (debt-collection agencies), ... It may be exercised only under the occupational designation corresponding to the authorization.' 7 Reisebuero Broede, the creditor in the main proceedings, is a travel agency established in Cologne, Germany. On 29 December 1992 it obtained from the Amtsgericht Hagen an enforceable decision against Mr Sandker, who resides in Dortmund, also in Germany. 8 On 8 May 1994 Reisebuero Broede gave INC Consulting SARL (`INC') authority inter alia to take all recovery measures necessary in order to secure full settlement of the debt. INC is a company registered with the Tribunal de Commerce (Commercial Court), Senlis, France, under No B 391 100 021 (93B185) and is engaged in the provision of debt-collection and corporate consultancy services. 9 On 19 May 1994 INC in turn conferred a power of attorney on its managing director, Ms Ramthun, who resides in Overath, Germany, authorizing her to enforce the decision of the Amtsgericht Hagen on behalf of Reisebuero Broede and to take all related legal measures. 10 Accordingly, Ms Ramthun applied to the Amtsgericht Dortmund on 6 June 1994 for the issue of an attachment order against Mr Sandker. 11 By order of 23 August 1994, the Amtsgericht Dortmund dismissed that application on the ground that Ms Ramthun lacked the requisite capacity to act, since, under German law, debt-collection undertakings are prohibited from representing their creditor clients in legal proceedings. According to that court, the prohibition in question also applies to foreign debt-collection undertakings, notwithstanding Articles 59 and 60 of the EC Treaty, on which Reisebuero Broede relied. Ms Ramthun lodged an appeal against that decision by document dated 31 August 1994. 12 The Landgericht Dortmund considered that the dispute raised questions as to the interpretation of Community law; it therefore decided to stay proceedings and to refer the following questions to the Court: `(1) Does Article 59 of the EEC Treaty preclude a national rule which prohibits an undertaking established in another Member State from securing judicial recovery of debts of others on the ground that this activity is reserved under the national rule for persons to whom a special official licence has been issued for that purpose? (2) If the answer is in the affirmative: is this also the case where national law alone is to be applied in the recovery proceedings on the ground that the parties to the enforcement proceedings are resident within the State and the enforceable decision was also obtained within the State?' Admissibility 13 Without raising any formal objection of inadmissibility, the German Government and the Commission express doubts as to the existence of a genuine Community element in the main proceedings. They question whether Ms Ramthun, a German national resident in Germany, is not in fact representing Reisebuero Broede, a travel agency established in Germany, as one of her own clients and not as a client of INC. 14 It has consistently been held that the provisions of the Treaty on freedom to provide services cannot apply to activities all of whose relevant elements are confined within a single Member State. Whether that is so in a particular case depends on findings of fact which are for the national court to make (Case C-23/93 TV10 v Commissariaat voor de Media [1994] ECR I-4795, paragraph 14). 15 In the present case, it is apparent from the order for reference and the information provided at the hearing that Reisebuero Broede gave a power of attorney to INC, which has its seat in France, and which itself gave its managing director, Ms Ramthun, power to act on behalf of the creditor company. 16 In those circumstances, the information before the Court leaves no room for doubt as to the cross-border nature of the case in the main proceedings. The first question 17 By its first question, the national court seeks in essence to know whether Article 59 of the Treaty precludes a national rule which prohibits an undertaking established in another Member State from securing judicial recovery of debts owed to others. 18 As a preliminary point, the German Government and the Commission question whether the issues raised by the reference do not in fact concern freedom of establishment rather than freedom to provide services. If it proved to be the case that INC was able, as a result of Ms Ramthun's residence in Germany, to establish a permanent presence in that country or that its activities were wholly or mainly concentrated on German territory, the provisions on freedom of establishment would apply. 19 It should be recalled that the provisions of the chapter on services are subordinate to those of the chapter on freedom of establishment (Case C-55/94 Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] ECR I-4165, paragraph 22). 20 The concept of establishment within the meaning of Articles 52 to 58 of the Treaty is a very broad one, allowing a Community national to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to economic and social interpenetration within the Community in the sphere of activities as self-employed persons (judgment in Gebhard, cited above, paragraph 25). 21 By contrast, the provisions of the chapter on services, in particular the third paragraph of Article 60, envisage that the provider of services is to pursue his activity in another Member State on a temporary basis, although the fact that the provision of services is temporary does not mean that the provider of services may not equip himself with some form of infrastructure, such as an office, chambers or consulting rooms, in so far as such infrastructure is necessary for the purposes of performing the services in question (judgment in Gebhard, paragraphs 26 and 27). 22 It is for the national court to determine, having regard to the duration, regularity, periodicity and continuity of INC's activities, whether the activity which it pursues in Germany is of a temporary nature for the purposes of the Treaty. 23 In this respect, it should be noted that Ms Ramthun stated, in response to written questions put by the Court, that INC undertook debt-collection work in Germany on behalf of Reisebuero Broede on six occasions between February and May 1994. At the hearing, Ms Ramthun further confirmed that INC had undertaken debt-collection work in France and in Germany for French clients and a number of foreign clients. 24 In those circumstances, it must be assumed, for the purposes of answering the questions referred, that the situation with which the main proceedings are concerned falls within Article 59 of the Treaty. 25 It has consistently been held that Article 59 requires not only the elimination of all discrimination on grounds of nationality against providers of services who are established in another Member State but also the abolition of any restriction, even if it applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less advantageous the activities of a provider of services established in another Member State where he lawfully provides similar services (Case C-272/94 Guiot [1996] ECR I-1905). 26 In the present case, it is apparent from the documents before the Court and the observations made at the hearing by the German Government that in Germany an undertaking may carry out judicial debt-collection work for others only through the intermediary of a lawyer. The administrative authorization provided for by Article 1(1) of the RBerG, to which the national court refers, applies only to the extra-judicial recovery of debts and is therefore not relevant to the determination of the present case. 27 In prohibiting debt-collection undertakings from carrying out judicial debt-collection work themselves, without the involvement of a lawyer, Article 1(1) of the RBerG constitutes a restriction on freedom to provide services within the meaning of Article 59 of the Treaty, albeit it applies without distinction to national providers of services and to those of other Member States, since it makes it impossible to provide those services in Germany, even where the activities of the provider of the services in that State are of a purely occasional nature. 28 Consequently, in accordance with settled case-law, if it is to fall outside the prohibition laid down by Article 59, the restriction imposed by the RBerG must fulfil four conditions: it must be applied in a non-discriminatory manner; it must be justified by imperative requirements in the general interest; it must be suitable for securing the attainment of the objective which it pursues; and it must not go beyond what is necessary in order to attain it (see Gebhard, paragraph 37). The Court has also stated in that connection that freedom to provide services may be restricted only by rules which are justified by overriding reasons in the general interest, in so far as that interest is not safeguarded by the rules to which the provider of the service is subject in the Member State where he is established (see, to that effect, Case C-180/89 Commission v Italy [1991] ECR I-709, paragraph 17, Case C-198/89 Commission v Greece [1991] ECR I-727, paragraph 18, and Case C-43/93 Vander Elst v Office des Migrations Internationales [1994] ECR I-3803, paragraph 16). 29 It is necessary, therefore, to consider whether those four conditions are fulfilled in circumstances such as those of the main proceedings. 30 As regards the first condition, it follows from what has already been said that the rule prohibiting a debt-collection agency from itself undertaking, in the course of business, the judicial recovery of debts, without representation by a lawyer, is not discriminatory and applies without distinction to national providers of services and to those of other Member States. 31 As to the second condition, the German Government maintains, without being contradicted in that regard, that Article 1(1) of the RBerG is intended, first, to protect the recipients of the services in question against the harm which they could suffer as a result of legal advice given to them by persons who did not possess the necessary professional or personal qualifications and, second, to safeguard the proper administration of justice (Case C-76/90 Saeger v Dennemeyer [1991] ECR I-4221, paragraph 16, and Case 33/74 Van Binsbergen v Bedrijfsvereniging Metaalnijverheid [1974] ECR 1299). 32 As regards the third and fourth conditions, however, the Commission and Reisebuero Broede maintain that the rule prohibiting a debt-collection agency from itself undertaking the judicial recovery of debts goes beyond what is necessary in order to attain the objectives pursued by the RBerG. 33 In that regard, Reisebuero Broede submits, in particular, that those objectives could equally well be attained by less restrictive measures. The German authorities could accept a certificate of integrity or solvency issued by the competent authorities of the Member State where the provider of the services is established, or could require it to elect domicile in the host Member State for the purposes of receiving official legal correspondence there. 34 The Commission maintains that the restrictions in issue are not concerned with the protection either of creditors or of officials responsible for the administration of justice, since, under Paragraph 79 of the ZPO, creditors can apply to an Amtsgericht for an attachment order either personally or through the intermediary of non-professional advisers instructed by them, and such applications are not subject to the requirement that they be represented by a lawyer. 35 It should be noted, first, that the main proceedings concern the representation of litigants by third parties who are legal persons acting in the course of business. The German Government has explained that, in allowing creditors engaged in legal proceedings to act in person or through the intermediary of another person, Paragraph 79 of the ZPO seeks to limit the costs of proceedings before courts lower than a Landgericht. The possibility of acting through an intermediary is afforded only to natural persons. Such persons may, where appropriate, obtain, within the premises of the courts themselves, the advice of persons experienced in such matters. The position is different in the case of litigation services provided on a professional basis. That activity is reserved, according to the relevant provisions of the RBerG, to lawyers who are answerable personally to the courts. 36 Consequently, the fact, pointed out by the Commission, that a creditor or a non-professional adviser acting on his behalf can lodge an application for an attachment order does not preclude legislative provisions such as those at issue in the main proceedings from being regarded as justified in the general interest on the ground that they protect creditors or safeguard the sound administration of justice in relation to the provision of litigation services on a professional basis. 37 Second, it has consistently been held that, in the absence of specific Community rules in the matter, each Member State is free to regulate the exercise of the legal profession in its territory (Case 107/83 Ordre des Avocats au Barreau de Paris v Klopp [1984] ECR 2971, paragraph 17). 38 As the Court has repeatedly observed, the application of professional rules to lawyers, in particular those relating to organization, qualifications, professional ethics, supervision and liability, ensures that the ultimate consumers of legal services and the sound administration of justice are provided with the necessary guarantees in relation to integrity and experience (see to that effect, the judgments in Case 292/86 Gullung v Conseils de l'Ordre des Avocats du Barreau de Colmar et de Saverne [1988] ECR 111 and Van Binsbergen, cited above). 39 According to the German Government, the rule that only lawyers may, in a professional capacity, represent individuals in legal proceedings, in a field involving complex legal issues and governed by numerous specific rules, ensures the protection of those to whom the services are provided and the sound administration of justice against the risks arising from incompetence or inexperience on the part of debt-collection agencies in that field. 40 Those guarantees, it submits, are all the more necessary in circumstances such as those of the main proceedings, where the object of the proceedings is the execution of an enforceable decision against an individual by means of an attachment order, and, consequently, the procedural rules ensuring the protection of individuals must be complied with. 41 As Community law presently stands, it is for the Member States to assess whether it is necessary to place restrictions on the professional recovery of debts by way of judicial proceedings. Although, in some Member States, that activity is not reserved to lawyers, the Federal Republic of Germany is entitled to consider that the objectives pursued by the RBerG cannot be attained, as regards that activity, by less restrictive means. 42 Whilst it is true that debt-collection agencies are not subject to legal regulation in France, the fact that one Member State imposes less strict rules than another Member State does not mean that the latter's rules are disproportionate and hence incompatible with Community law (Case C-348/93 Alpine Investments v Minister van Financiën [1995] ECR I-1141, paragraph 51). 43 The answer to the national court's first question must therefore be that Article 59 of the Treaty does not preclude a national rule which prohibits an undertaking established in another Member State from securing judicial recovery of debts owed to others on the ground that the exercise of that activity in a professional capacity is reserved to the legal profession. The second question 44 In view of the answer given to the first question, there is no need to give a ruling on the second question. Decision on costs Costs 45 The costs incurred by the German Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Operative part On those grounds, THE COURT (Fifth Chamber), in answer to the questions referred to it by the Landgericht Dortmund, by order of 27 December 1994, hereby rules: Article 59 of the EC Treaty does not preclude a national rule which prohibits an undertaking established in another Member State from securing judicial recovery of debts owed to others on the ground that the exercise of that activity in a professional capacity is reserved to the legal profession.

CIVIL APPELLATE JURISDICTION Civil Appeal No. 74 of 1952. Appeal by Special Leave from the Judgment and Decree dated the 10th November 1948 of the High Court of Judicature at Bombay in Appeal from Original Decree No. 274 of 1945 arising out of the decree dated the 17th March 1945 of the Court of Revenue Judge, Bombay in Suits Nos. 7 and 23 of 1943. K. Daphtary, Solicitor-General for India Porus A. Mehta, with him , for the appellant. C. Setalvad, Attorney-General for India and Jamshedji Kanga,, R. J. Kolah and Rajinder Narain, with them , for the respondents. 1955. February 28. The Judgment of the Court was delivered by VENKATARAMA AYYAR J.-The point for decision in this appeal is as to the liability of certain lands situated within the City of Bombay to be assessed to revenue under the Bombay City Land Revenue Act No. II of 1876. These lands were originally known as Foras lands, and the rights of the occupants of 1313 those lands were settled by Bombay Act No. VI of 1851, called the Foras Act. What these rights are, is a matter in companytroversy between the parties, and will be presently companysidered. Between 1864 and 1867 the Government acquired these lands for the purpose of the B.B. C.I. Railway under the provisions of Land Acquisition Act No. VI of 1857. On 22-11-1938 these lands, being numberlonger required for the purpose of the Railway, were sold by the Governor-General to Lady Pochkhanawalla and others as joint tenants under a deed, Exhibit A. On 28-3-1939 the survivor of the purchasers under Exhibit A companyveyed the lands in trust under Exhibit B, and the respondents are the trustees appointed under that deed. In April 1942 the appellant acting under the provisions of Bombay Act No. II of 1876, issued numberices to the respondents proposing to levy assessment on the lands at the rates mentioned therein, and calling for their representation. In their reply, the respondents denied the right of the appellant to assess the lands to revenue, and followed it up by instituting two suits before the Revenue Judge for establishing their rights. In their plaints, they alleged that under the provisions of the Foras Act the maximum assessment leviable on the lands was 9 reas per burga, and that the Government had numberright to enhance it that the effect of the land acquisition proceedings between 1864 and 1867 was to extinguish the right of the State to levy even this assessment, and that further, having purchased the properties absolutely from the Governor-General under Exhibit A. they were entitled to bold them without any liability to pay revenue thereon. They accordingly prayed for a declaration that the Government had numberright to levy any assessment on these lands, or, in the alternative, that such assessment should number exceed what was payable under Bombay Act No. VI of 1851. The appellant companytested the suit. The Revenue Judge held that as a result of the land acquisition proceedings between 1864 and 1867, the lands vested in the Government freed from any liability to pay assessment, and that when the Governor-General transferred them under 1314 Exhibit A without reserving the right to assess them, the purchasers had the right to hold them without any liability to pay revenue. He accordingly granted a declaration that the appellant had numberright to levy assessment, and -that the numberices issued by him under Act No. II of 1876 were illegal. On appeal by the defendants to the High Court of Bombay, it was held by Chagla, C.J., Bhagwati, J. companycurring, that Act No. VI of 1851 imposed a specific limit on the right of the Government to levy assessments on the lands in question, that, further, by reason of the land acquisition proceedings the right of the Provincial Government to levy assessment even within the limits prescribed by Act No. VI of 1851 was extinguished, and that when the lands were transferred by the Central Government to Lady Pochkhanawalla and others, they got them as revenue-free lands. In the result, the appeal was dismissed. This appeal by special leave is directed against this decision. The statutory authority under which the appellant seeks to levy assessment on the lands is section 8 of Bombay Act No. 11 of 1876, and it is as follows It shall be the duty of the Collector, subject to the orders of Government, to fix and to levy the assessment for land revenue. When there is numberright on the part of the superior holder in limitation of the right of Government to assess, the assessment shall be fixed at the discretion of the Collector subject to the companytrol of Government. When there is a right on the part of the superior bolder in limitation of the right of Government, in companysequence of a specific limit to assessment having been established and preserved, the assessment shall number exceed such specific limit. It was on the footing that the respondents were superior holders as defined in the Act, that the appellant issued numberices to them in April 1942. In their reply numberices and in the plaints, the respondents did number dispute that position, but only companytended in terms of section 8 that they had a specific right in limitation of the right of the Government to assess the 1315 lands and the entire companytroversy in the Courts below was whether they had established that right. No companytention was raised that they were number superior holders as defined in the Act, and that, in companysequence, numberassessment companyld be imposed on the lands under section 8 of the Act. In the argument before us, the companytention was sought to be raised for the first time by the learned Attorney-General that the proceedings taken by the Collector under section 8 were incompetent, as that section would apply only to lands held by superior holders, that the definition of superior holier in section 3 4 as meaning the person having the highest title under the Provincial Government to any land in the City of Bombay would take in only persons who held on a derivative tenure from the Government, that persons who acquired lands from the Government under an outright sale companyld number be described as superior holders within section 3 4 , and that the lands held by the respondents were therefore outside the operation of section 8. On behalf of the appellant, the learned Solicitor General objected to this question being allowed to be raised at this stage of the proceedings, as that would involve investigation of questions of fact and of law, such as whether under the tenures in the City of Bombay, owners held the lands as superior holders, whether under Indian jurisprudence what was paid by the occupier of land was rent or revenue, whether the prerogative right of the Crown to assess lands subsisted in the Presidency Towns of Calcutta, Bombay and Madras and several other questions, for the decision of which there were number sufficient materials. This objection must be upheld. In view of the fact that the respondents have, at all stages, claimed immunity from assessment on the basis of section 8, we do number companysider that it would be proper to allow them number to change their front, and take up a stand wholly inconsistent with what they had taken, when that involves an investigation into facts which has number been made. We must, therefore, proceed on the footing that the respondents are superior holders as defined 1316 in section 3 4 of Act No. 11 of 1876, and that their rights are to be determined in accordance with section 8 of the Act. Construing that section, the Privy Council laid down in Goswamini Shri Kamala Vahooji v. Collector of Bombay 1 two propositions that though the language of the section would more appropriately apply when the dispute was as to the quantum of assessment, the right to levy it number being itself companytroverted, it was open to the superior holder under this section to plead and prove that the State had numberright to levy any assessment and that the burden was on the person who pleaded a limitation on the right of the State to assess, to clearly and unequivocally establish it. It is, therefore, open to the respondents to plead that the lands are wholly exempt from revenue but the onus of making it jut lies heavily on them. The learned Attorney-General has sought to establish a right in the respondents in limitation of the right of the appellant to assess the lands on three grounds 1 the Foras Act No. VI of 1851, 2 the land acquisition proceedings under Act No. VI of 1857, and 3 the sale deed, Exhibit A. Taking first the Foras Act For a companyrect appreciation of its provisions, it is necessary to refer -Co the history of the lands, which are dealt with therein. The Island of Bombay once formed part of the Portuguese Dominions in India. In 1661 when Princess Infant Catherine was married to King Charles 11 of England, it was ceded by the King of Portugal to the British Crown as dowry, and by a Royal Charter dated 27th March 1668 King Charles 11 granted it to the East India Company. At that time the Island companysisted only of the Fort and the town, and outside the walls of the town it was scarcely more than rock and marsh which became a group of islands every day on high tide. Vide Shapurji Jivanji v. The Collector of Bombay 1 . It appears from Wardens Report on the Landed Tenures in Bombay and Le Mesuriers Report on the Foras lands, that during the 18th Century the East India Company started 1 1937 L.R. 64 I.A. 334. 2 1885 I.L.R. 9 Bom. 483, 488, 1317 reclaiming these lands, and invited the inhabitants to cultivate them, at first without payment of any assessment and subsequently on favourable rates. These payments were called Foras. The meaning of this word is thus explained by Westropp, J. in his numbere at page 40 in Naoroji Beramji v. Rogers 1 - foras is derived from the Portuguese word fora Latine foras, from foris a door , signifying outside. It here indicates the rent or revenue derived from outlying lands. The whole island of Bombay fell under that denomination when under Portuguese rule, being then a mere outlying dependency of Bassein. Subsequently the term foras was, for the most part, though perhaps number quite exclusively, limited to the new salt batty ground reclaimed from the sea, or other waste ground lying outside the Fort, Native Town, and other the more ancient settled and cultivated grounds in the island, or to the quitrent arising from that new salt batty ground and outlying ground. Thus, the salt batty lands reclaimed from the sea came to be known as Foras lands by association with the assessments payable thereon called Foras. The nature of the interest which the occupants had in the Foras lands was the subject of companysiderable debate in the beginning of the 19th Century. In 1804, the Company resumed some of the Foras lands for settling persons displaced in the Town area, and that resulted in a suit by one Sheik Abdul Ambly, wherein the right of the Company to resume the lands was challenged. The action failed, the Court upholding the claim of the Company to resume them, but at the same time, it observed that its action in dispossessing the occupants would appear and be felt as a grievous hardship, if number an open and downright injury. Vide Wardens Report on the Landed Tenures of Bombay, pages 60 and 61. Thereafter, the Company had the matter further investigated, and there were reports on the subject by Warden in 1814 and Le Mesurier in 1843. And finally the Company decided to recognise 1 4 Boni. H.C.R. 1. 1318 the rights of the Occupants, and that resulted in the enactment of Act VI of 1851. The relevant provisions of the Act may number be numbericed. The preamble to the Act states that, Whereas the East India Company are legally entitled to the freehold reversion of the several lands heretofore paying a render called foras, the outline whereof is delineated in a plan and numbered 1, subject to certain tenancies therein at will, or from year to year whereas it is companysidered expedient as of grace and favour that the rights of the said East India Company in all of the lands included in the said plan should be extinguished, save as hereinafter mentioned. It is enacted as follows Section 2 enacts that From and after the said 1st day of July, the rights of the said Company in all of the said lands mentioned in the said plan No. 1, except those mentioned in the said plan No. 2, shall be extinguished in favour of the persons who shall then hold the same respectively as the immediate rent-payers to the said Company, saving the rents number severally payable in respect of such lands, which shall companytinue payable and recoverable by distress, or by any means by which land revenue in Bombay is or shall be recoverable, under any Act or Regulation Section 4 provides Nothing herein companytained shall exempt such lands from being liable-to any further general taxes on land in Bombay According to the appellant, the effect of these provisions was to grant the lands to the occupants on a permanent tenure, heritable and alienable, but number further to grant them on a permanent assessment. Reliance was also placed on the decision in Shapurji Jivanji v. The Collector of Bombay 1 , where it was held generally that the Government had the right under section 8 of the Act to enhance the assessments on Foras lands. There is some support for this companytention in the provisions of the Act. The preamble 1 1885 I.L.R. 9 Bom. 483, 488. 1319 expressly recites that the occupants were tenants at will or from year to year, and that the reversion was with the East India Company. One companysequence of that was that the Company had the right to eject the occupants. Now, what the Company did under the Act was to give up that right as a matter of grace, because, as already mentioned, it would appear to have invited them to settle on the lands and cultivate them, and it did that by extinguishing its reversion as landlord. In other words, it agreed to companyfer on the tenants the status of owners of lands. If that was all the scope of Act No. VI of 1851, it companyld number be doubted that the rights of the State to enhance the assessments would number be affected, because ownership of land does number per se carry with it an immunity from enhancement of assessment in exercise of sovereign rights, and occupants of Foras lands cannot claim to be in a better position by reason of the Act than owners of lands in ryotwari tracts, the assessments on which are liable to periodic revision. But what is against the appellant is that section 2 does number stop with merely extinguishing the reversionary rights of the Company. It goes further, and saves expressly the rents number severally payable in respect of such lands, rent being used here in the sense of assessment, and adds which shall companytinue to be payable. Now, the companytention of the respondents is that those words companyferred on the Government a right to recover only the assessment which was then payable, and that there was thus a limitation on its right to enhance it. It is companymon ground that the assessment payable on these lands at that time was 9 reas per burga, and Exhibit N shows that it was at that rate that the assessment was companylected from 1858 until the lands were acquired by the Government in land acquisition proceedings. It is accordingly companytended for the respondents that under the Act, the Government companyld number claim anything more than 9 reas per burga as assessment on the lands. It is urged for the appellant that the words number severally payable companyld number be companystrued as impos- 1320 ing a limitation on the right of the Government to enhance the assessment, as they occur in a saving clause, the scope of which was to reserve the rights of the Company and number to companyfer on the occupants rights in addition to what the body of the section had granted to them. It is true that the setting in which these words occur is more appropriate for reserving rights in favour of the Company than for declaring any in favour of the occupants. But to adopt the companystruction companytended for by the appellant would be to render the words number severally payable and which shall companytinue to be payable wholly meaningless. Notwithstanding that the drafting is inartistic, the true import of the clause unmistakably is that while, on the one hand, the right of the Government to recover the assessment is saved, it is, on the other hand, limited to the amount then payable by the occupants. The companytention of the respondents that under the Foras Act they acquired a specific right to hold the lands on payment of assessment number exceeding what was then payable, must, therefore, be accepted We have next to decide what effect the proceedings taken by the Government under the Land Acquisition Act No. VI of 1857 during the years 1864 to 1867 have on the rights of the parties. Section VIII of the Act is as follows When the Collector or other officer has made an award or directed a reference to arbitration, be may take immediate possession of the land which shall thenceforward be vested absolutely in the Government, free from all other estates, rights, titles and interests. The companytention of the respondents which has found favour with the Courts below is that under that section the effect of the vesting of the lands in the Government was to extinguish whatever interests were previously held over them, that the right of the Government to levy assessment was such an interest, and that it was also extinguished. It is argued that when lands are acquired under the Act, the valuation that is made is of all the interests subsisting thereon, including the 1321 rights of the Crown to assess the lands, as well as the interests of the claimants therein, that what is paid to the owners is number the full value of the lands but the value of their interests therein, deduction being made of the value of the right of the Government to assess from out of the full value, and that, in effect, there was an award of companypensation for the right to assess, and that, therefore, that right equally with the rights of the claimants over the lands would be extinguished. One of the awards has been marked as Exhibit P, and the respondents rely on the recitals therein that the companypensation to the claimants was for their interest in the said lands. The award, it must be mentioned, directs the Government to pay the claimants the amounts specified therein, but companytains numberprovision for payment of any sum as companypensation to the Government for its right to assess the lands number does it even value that right. But the respondents companytended that the Government being the authority to pay must be deemed to have paid itself, and that, in any event, if they were entitled to companypensation, their failure to claim it companyld number affect the result, which was that the right to levy assessment would be extinguished. We are unable to accept this companytention. When the Government acquires lands under the provisions of the Land Acquisition Act, it must be for a public purpose, and with a view to put them to that purpose, the Government acquires the sum total of all private interests subsisting in them. If the Government has itself an interest in the land, it has only to acquire the other interests outstanding therein, so that it might be in a position to pass it on absolutely for public user. In the Matter of the Land Acquisition Act The Government of Bombay v. Esupali Salebhai 1 Batchelor, J. observed In other words Government, as it seems to me, are number debarred from acquiring and paying for the only outstanding interests merely because the Act, which primarily companytemplates all interests as held outside Government, directs that the entire companypen- 1 1909 I.L.R. 34 Bom. 618, 686. 1322 sation based upon the market value of the whole of land, must be distributed among the claimants. There, the Government claimed ownership of the land on which there stood buildings belonging to the claimants, and it was held that the Government was bound to acquire and pay only for the superstructure, as it was already the owner of the site. Similarly in Deputy Collector, Calicut Division v. Aiyavu Pillay 1 , Wallis, J. as he then was observed It is, in my opinion, clear that the Act does number companytemplate or provide for the acquisition of any interest which already belongs to Government in land which is being acquired under the Act, but only for the acquisition of such interests in the land as do number already belong to the Government. With these observations, we are in entire agreement. When Government possesses an interest in land which is the subject of acquisition under the Act, that interest is itself outside such acquisition, because there can be numberquestion of Government acquiring what is its own. An investigation into the nature and value of that interest will numberdoubt be necessary for determining the companypensation payable for the interest outstanding in the claimants, but that would number make it the subject of acquisition. The language of section VIII of Act No. VI of 1857 also supports this companystruction. Under that section, the lands vest in the Government free from all other estates, rights, titles and interests, which must clearly mean other than those possessed by the Government. It is on this understanding of the section that the award, Exhibit p, is framed. The scheme of it is that the interests of the occupants are ascertained and valued, and the Government is -directed to pay the companypensation fixed for them. There is numbervaluation of the right of the Government to levy assessment on the lands, and there is numberaward of companypensation therefor. We have so far assumed with the respondents that the right of the Government to levy assessment is an interest in land within the meaning of section VIII 1 1911 9 I-C-341. 1323 of Act VI of 1857. But is this assumption wellfounded? We think number. In its numbermal acceptation, interest means one or more of those rights which go to make up ownership. It will include for example, mortgage, lease, charge, easement and the like. but the right to impose a tax on land is a prerogative right of the Crown, paramount to the ownership over the land and outside it. Under the scheme of the Land Acquisition Act, what is acquired is only the ownership over the lands, or the inferior rights companyprised therein. Section 3 b of the Land Acquisition Act No. I of 1894 defines a person interested as including all persons claiming an interest in companypensation to be made on account of the acquisition of land under this Act, and a person shall be deemed to be interested in land if he is interested in an easement affecting the land. Section 9 requires that numberices should be given to all persons who are interested in the land. Under section 11, the Collector has to value the land, and apportion the companypensation among the claimants according to their interest in the land. Under section 16, when the Collector make an award he may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrance. The word encumbrance in this section can only mean interests in respect of which a companypensation was made under section 11, or companyld have been claimed. It cannot include the right of the Government to levy assessment on the lands. The Government is number a person interested within the definition in section 3 b , and, as already stated, the Act does number companytemplate its interest being valued or companypensation being awarded therefor. It is true that there is in Act No. VI of 1857 numberhing companyresponding to section 3 b of Act No. I of 1984, but an examination of the provisions of Act No. VI of 1857 clearly shows that the subject-matter of acquisition under that Act was only ownership over the lands or its companystituent rights and number the right of the Government to levy assessment. The provisions relating to the issue of numberices to persons interested 1324 and the apportionment of companypensation among them are substantially the same. Moreover, under section VIII the Government is to take the lands free from all other estates, rights, title and interest, and interest must, in the companytext, be companystrued ejusdem generis with estates etc., as meaning right over lands, of the character of, but number amounting to an estate, and cannot include the prerogative right to assess the lands. It must accordingly be held that the effect of the land acquisition proceedings was only to extinguish the rights of the occupants in the lands and to vest them absolutely in the Government, that the right of the latter to levy assessment was number the subject-matter of those proceedings, and that if after the award the lands were number assessed to revenue, it was because there companyld be numberquestion of the Government levying assessment on its own lands. Then there remains the question whether the sale deed, Exhibit A, imposes any limitation on the right of the Crown to assess the lands. The deed companyveys the lands to the purchasers absolutely with all rights, easements and appurtenances whatsoever to be held for ever. It does number, however, recite that they are to be held revenue-free. But it is argued for the respondents that where there is an absolute sale by the Crown as here, that necessarily imports that the land is companyveyed revenue-free and section 3 of the Crown Grants Act No. XV of 1895 and certain observations in Dadoba v. Collector of Bombay 1 were relied on as supporting this companytention. Section 3 of Act No. XV of 1895 is as follows All provisions restrictions, companyditions and limitations over companytained in any such grant or transfer as aforesaid shall be valid and take effect according to their tenor any rule of law, statute or enactment of the Legislature to the companytrary numberwithstanding. The companytention is that as the grant is of a freehold estate without any reservation it must, to take effect according to its tenor, be companystrued as granting exemption from assessment to revenue. But that will be extending the bounds of section 3 beyond its company- 1 1901 I.L.R. 25 Bom. 714, 1325 tents. The object of the Act as declared in the preamble is to remove certain doubts as to the extent and operation of the Transfer of Property Act, 1882, and, as to the power of the Crown to impose limitations and restrictions upon grants and other transfers of land made by it or under its authority. Section 2 enacts that the provisions of the Transfer of Property Act do number apply to Crown grants. Then follows section 3 with a positive declaration that all provisions, restrictions, companyditions and limitations over shall take effect according to their tenor. Reading the enactment as a whole, the scope of section 3 is that it saves provisions, restrictions, companyditions and limitations over which would be bad under the provisions of the Transfer of Property Act, such as companyditions in restraint of alienations or enjoyment repugnant to the nature of the estate, limitations offending the rule against perpetuities and the like. But numberquestion arises here as to the validity of any provision, restriction, companydition, or limitation over, companytained in Exhibit A on the ground that it is in companytravention of any of the provisions of the Transfer of Property Act, and there is accordingly numberhing on which section 3 companyld take effect. It is argued by the learned Attorney-General that this limitation on the scope of the Act applies in terms only to section 2, and that section 3 goes much further, and is general and unqualified in its operation. The scope of section 3 came up for companysideration before the Privy Council in Thakur Jagannath Baksh Singh v. The United Provinces 1 . After setting out that section, Lord Wright observed These general words cannot be read in their apparent generality. The whole Act was intended to settle doubts which had arisen as to the effect of the Transfer of Property Act, 1882, and must be read with reference to the general companytext In this view, section 3 must also be companystrued in the light of the preamble, and so companystrued, it cannot, for the reasons already given, have any bearing on 1 1946 F.L.J. 88. 1326 the rights of the parties. Moreover, that section only enacts that all provisions, restrictions, companyditions and limitations over shall take effect according to their tenor, and what is relied on is number any provision, restriction, companydition or limitation over, in Exhibit A which according to its tenor entitles the respondents to hold the lands rent-free, but the absolute character of the interest companyveyed under Exhibit A. Therefore, section 3 does number in terms apply. The respondents also relied on certain observations in Dadoba v. Collector of Bombay 1 as supporting their companytention. There, the -facts were that the Government had granted one parcel of land to the Free Church Mission of Scotland revenue-free under a deed dated 1-10-1884. By another deed dated 20-12-1887 they released their right of reversion on two other parcels of land held by the Mission as tenants but subject to the payment of taxes, rates, charges, assessments leviable or chargeable in respect of the said premises or anything for the time being thereon. On 16-1-1888 the Mission sold all the three parcels to one Janardan Gopal, and the Secretary of State joined in the companyveyance for effectually releasing the reversion of the Government. Before Janardan Gopal purchased the lands, there had been companyrespondence between his solicitors and the Government as to the assessment payable on the lands, and the Government had intimated that it would be 9 pies per square yard per annum. Subsequent to the purchase, the Collector raised the assessment payable on the lands, and the point for decision was whether he companyld lawfully do so. In deciding that he companyld number, Sir Lawrence Jenkins stated that the purchaser had paid full value for the lands in the belief induced by the Government that the assessment of 9 pies per sq. yard would be permanent, and that on the facts, the case fell within section 115 of the Evidence Act, and that the Government was estopped from enhancing the assessment. He was also prepared to hold that the companyrespondence between the purchaser and the Government prior to 1 1901 I.L.R. 25 Bom. 714. 1327 the sale amounted to a companylateral companytract number to raise the assessment. Chandavarkar, J., companycurred in the decision, and in the companyrse of his judgment observed when we have regard to the nature of the transaction, viz., that Government was selling the property out-and-out as any private proprietor-when we look to the whole of the language used the intention of the parties must be taken to have been that the purchaser was to be liable to pay the amount of 9 pies per square yard per annum then levied as assessment and numbermore. These observations have been relied on as supporting the companytention that when there is an absolute sale by the Government, it amounts to an agreement number to levy more assessment than was payable at that time. But the remarks of the learned Judge have reference to the recitals in the deed dated 20-12-1887 and the negotiations between the purchaser and the Government which are referred to in the passage, and number to the character of the transfer as an absolute sale and the decision is based on a finding of estoppel or companylateral companytract deducible from the companyrespondence between the purchaser and the Government. Neither section 3 of the Crown Grants Act, number the observations in Dadoba v. Collector of Bombay 1 lend any support to the companytention that an absolute sale of lands by the Government ipso facto companyfers on the purchasers a right to hold the lands free of revenue. The question then is whether on the, terms of Exhibit A such a right companyld be held to have been granted. There was some discussion at the Bar as to the companyrect rule of companystruction applicable to the deed, Exhibit A. It was argued by the learned Solicitor. General for the appellant that being a Crown grant, Exhibit A should be companystrued in favour of the Crown and against the grantee. On the other hand, it was argued by the learned Attorney-General that it should make numberdifference in the companystruction of the grant, whether the grantor was the Crown or a subject, as 1 1901 I.L.R. 25 Bom. 714. 170 1328 the question in either case was what had been granted and that must be determined on the language of the deed. When closely examined, it will be seen that there is numberreal companyflict between the two propositions. The former is in the nature of a rule of substantive law and its scope is that where as the transferee from a subject acquires, unless the companytrary appears, all the rights which the transferor has in the property as enacted in section 8 of the Transfer of Property Act, a grantee from the Crown gets only what is granted by the deed, and numberhing passes by implication. But when the grant is embodied in a deed, the question ultimately reduces itself to a determination of what was granted thereunder. What the Court has to do is to ascertain the intention of the grantor from the words of the document, and as the same words cannot be susceptible of two different meanings, it makes numberdifferenbe whether they occur in a grant by the Crown or by the subject. If the words used in a grant by a subject would be effective to pass an interest, then those words must equally be effective to pass the same interest when they occur in a Crown grant. Dealing with this question, Sir John Coleridge observed in Lord v. Sydney 1 But it is unnecessary for their Lordships to say more on this point, because they are clearly of opinion, that upon the true companystruction of this grant, the creek where it bounds the land is ad medium film, included within it. In so holding they do number intend to differ from old authorities in respect to Crown grants but upon a question of the meaning of the words, the same rules of companymon sense and justice must apply, whether the subject-matter of companystruction be a grant from the Crown, or from a subject it is always a question of intention, to be companylected from the language used with reference to the surrounding circumstancess. Exhibit A has to be companystrued in the light of these principles. As already stated, there is numberrecital in the deed that the purchasers are entitled to, hold the lands free of assessment. On the other hand, it 1 1859 12 Moore P.C. 473, 496, 497 14 E.R. 991, 1000. 1329 expressly provides that the properties will be subject to the payment of all cesses, taxes, rates, assessments, dues and duties whatsoever number or hereafter to become payable in respect thereof, which words would in their natural and ordinary sense companyer the present assessment. In Dadoba v. Collector of Bombay 1 , the Court had to companysider a clause similar to the above companytained in a deed executed by the Government in favour of the Mission on 20-12-1887. Discussing the effect of this clause on the rights of the plaintiff to hold the property permanently on an assessment of 9 pies per sq. yard, Chandavarkar, J. observed When that deed says that the property was sold subject to the payment of all taxes, rates, charges, assessments leviable or chargeable, it leaves the question open as to what the taxes etc., are which are leviable or chargeable. Extrinsic evidence of that is admissible, for it neither companytradicts number varies the terms of the deed, but explains the sense in which the parties understood the words of the deed, which, taken by themselves, are capable of explanation see Bank of New Zealand v. Simpson 2 . In that case, the dispute was number as to the liability to pay any assessment but to the quantum of assessment payable, and it was a possible view to take that the clause in question was number decisive on that question, and that it was left open. But here, the question is whether a right was granted to the purchasers to hold the lands free from liability to be assessed, and the clause in Exhibit A clearly negatives such a right. Even if we are to regard the question as left open, as observed in Dadoba v. Collector of Bombay 1 , it will number assist the respondents, as they have number established aliunde any right to hold the lands free from assessment. It must, therefore, be held that far from exempting the lands from liability to be assessed to revenue, Exhibit A expressly subjects them to it. It was finally companytended that even if the land acquisition proceedings between 1864 and 1867 had number the 1 1901 I.L.R. 25 Bom. 714. 2 1900 A.C. 182. 1330 effect of extinguishing the right of the Government to levy assessment, and that even if Exhibit A companyferred on the purchasers numberright to hold the land revenue-free, the assessment which the Government was entitled to levy under section 8 of Act No. II of 1876 was limited to what was payable under the Foras Act No. VI of 1851, and that the appellant had numberright to levy assessment at a rate exceeding the same. The argument in support of the companytention was that it was an incident of the Foras tenure under which the lands wore held, that the occupants were bound to pay only a fixed assessment, that the incident was annexed to the lands, and was inseparable therefrom, that between the dates when the lands were acquired under the Land Acquisition at No. VI of 1857 and 22-11-1938 when they were sold under Exhibit A they companytinued to retain their character as Foras lands, that if numberassessment was paid on the lands during that period, it was because the hand to pay and the hand to receive were the same, that when they came to the respondents under Exhibit A, they became impressed with the Foras tenure, and that, in companysequence, they were liable to be assessed only at the rate payable under Act No. VI of 1851. This companytention is, in our judgment, wholly untenable. When the lands were acquired under the Land Acquisition Act No. VI of 1857, the entire estate, right, title and interest subsisting thereon became extinguished, and the lands vested in the Government absolutely freed from Foras tenure, and when they were sold by the Government under Exhibit A the purchasers obtained them as freehold and number as Foras lands. As the tenure under which the lands were originally held had become extinguished as a result of the land acquisition proceedings, it was incapable of companying back to life, when the lands were sold under Exhibit A. In support of the companytention that the incidents of the Foras tenure companytinued to attach to the lands in the hands of the respondents, the learned Attorney General relied on the following observations of 1331 Das, J. in Collector of Bombay v. Municipal Corporation of the City of Bombay and others 1 - The immunity from the liability to pay rent is just as much an integral part or an inseverable incident of the title so acquired as is the obligation to hold the land for the purposes of a market and for numberother purpose. But the point for decision there was whether the Municipal Corporation of Bombay companyld acquire by prescription a right to hold the lands rent-free, they having entered into possession under a resolution of the Government that numberrent would be charged. And the passage quoted above merely laid down that when title to the land was acquired by the Municipal Corporation by prescription, one of the rights acquired as part of the prescriptive title was the right to hold the lands revenue-free. But the question here is whether the right to hold the lands under a fixed assessment survived after the acquisition by the Government under the land acquisition proceedings, and that depends on the effect of section VIII of Act VI of 1857. If, as observed in the above passage, the liability to pay assessment was an integral part or an inseverable incident of the title, then surely it was also extinguished along with the title of the occupants under section VIII of Act No. VI of 1857. There is another difficulty in the way of accepting the companytention of the respondents. The Foras Act was repealed in 1870 by Act No. XIV of 1870 long prior to the date of Exhibit A, and therefore, even if we hold that the Foras tenure revived in the hands of the purchasers under Exhibit A, the rights under the Foras Act were numberlonger available in respect of the lands. Section I of Act No. XIV of 1870 saves rights already acquired or accrued, and it is argued that the rights number claimed are within the saving clause. But as the lands had all been acquired under Act No. VI of 1857 between 1864 and 1867 there were numberrights in respect of the lands which companyld subsist at the date of the repeal, and the rights number claimed 1 1952 S.C.R. 43, 52, 1332 by the respondents are number within the saving clause. In the result, it must be held that the right of the appellant to levy assessment under section 8 of Act No. II of 1876 is number limited by any right in the respondents.

FOURTH SECTION CASE OF ERÇIKDI AND OTHERS v. TURKEY (Application no. 52782/99) JUDGMENT STRASBOURG 11 April 2006 FINAL 11/07/2006 This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Erçıkdı and Others v. Turkey, The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of: SirNicolas Bratza, President,MrJ. Casadevall,MrR. Türmen,MrM. Pellonpää,MrR. Maruste,MrK. Traja,MsL. Mijović, judges,and Mr M. O’Boyle, Section Registrar, Having deliberated in private on 21 March 2006, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 52782/99) against the Republic of Turkey lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by five Turkish nationals, Mr Mustafa Erçıkdı, Ms Gülşen Çamoğlu, Mr Ali Kazan, Mr Bülent Çamoğlu and Mr Mehmet Kaya (“the applicants”), on 30 July 1999. 2. The applicants were represented by Mr K.T. Sürek and Mr S. Mutlu, lawyers practising in Istanbul. The Turkish Government (“the Government”) did not designate an Agent for the purposes of the proceedings before the Court. 3. On 31 March 2005 the Court declared the application partly inadmissible and decided to communicate the complaint concerning the applicants’ right to a fair hearing by an independent and impartial tribunal to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the application at the same time as its admissibility. 4. The applicant and the Government each filed observations on the merits (Rule 59 § 1). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 5. The applicants were born in 1959, 1965, 1972, 1959 and 1972 respectively and live in Aydın. 6. The applicants were the Nazilli district directors of the Labour Party (Emeğin Partisi) at the time of the events. 7. On 31 July 1997 the Izmir Magistrates’ Court ordered the confiscation of a leaflet entitled “The Kurdish problem is a problem of the people of Turkey”. On 1 September 1997 this leaflet was distributed by the Nazilli District Headquarters of the Labour Party. 8. On 1 October 1997 the public prosecutor at the Izmir State Security Court filed a bill of indictment accusing the applicants of provoking hatred and hostility on the basis of a distinction between race and region. He requested that they be convicted and sentenced under Article 312 §§ 2 and 3 of the Criminal Code. 9. On 17 March 1998 the Izmir State Security Court convicted the applicants as charged. Mr Çamoğlu was sentenced to one year nine months and sixteen days’ imprisonment and to a fine of 1,576,566 Turkish liras (TRL). The other applicants were sentenced to one year and eight months’ imprisonment and to a fine of TRL 1,433,333. The sentences of Ms Çamoğlu and Mr Kazan were suspended as they did not have a criminal record. 10. On 6 April 1999 the Court of Cassation upheld the judgment of the first-instance court. II. THE RELEVANT DOMESTIC LAW 11. The relevant domestic law and practice in force at the material time are outlined in the following judgments: Özel v. Turkey (no. 42739/98, §§ 20-21, 7 November 2002) and Gençel v. Turkey (no. 53431/99, §§ 11-12, 23 October 2003). 12. By Law no. 5190 of 16 June 2004, published in the Official journal on 30 June 2004, the State Security Courts have been abolished. THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION 13. The applicants complained that they had been denied a fair hearing by an independent and impartial tribunal on account of the presence of a military judge on the bench of the Izmir State Security Court which tried and convicted them. They further complain that the written opinion of the principal public prosecutor at the Court of Cassation was never served on them, thus depriving them of the opportunity to put forward their counter‑arguments. They relied on Article 6 of the Convention, which in so far as relevant reads as follows: “In the determination of ... any criminal charge against him, everyone is entitled to a fair and public hearing ... by an independent and impartial tribunal established by law.” A. Admissibility 14. The Government argued under Article 35 of the Convention that the applicants’ complaints in respect of the independence and impartiality of the Izmir State Security Court must be rejected for non-exhaustion of domestic remedies and for failure to comply with the six-month rule. In this regard, they maintained that the applicants had not invoked this complaint before the domestic courts. They further argued that the applicants should have lodged their application with the Court within six months of the date on which the State Security Court rendered its judgment. 15. The Court reiterates that it has already examined and rejected the Government’s similar preliminary objections (see Vural v. Turkey, no. 56007/00, § 22, 21 December 2004, Çolak v. Turkey (no. 1), no. 52898/99, §§ 24-27, 15 July 2004, and Özdemir v. Turkey, no. 59659/00, § 26, 6 February 2003). The Court finds no particular circumstances, in the instant case, which would require it to depart from its findings in the above-mentioned cases. In view of the above, the Court rejects the Government’s preliminary objections under this head. 16. In the light of its established case law (see, amongst many authorities, Çıraklar v. Turkey, judgment of 28 October 1998, Reports of Judgments and Decisions 1998-VII) and in view of the materials submitted to it, the Court considers that the applicants’ complaints raise complex issues of law and fact under the Convention, the determination of which should depend on an examination of the merits. The Court therefore concludes that this part of the application is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other grounds for declaring it inadmissible have been established. B. Merits 1. Independence and impartiality of the State Security Court 17. The Court has examined a large number of cases raising similar issues to those in the present case and found a violation of Article 6 § 1 of the Convention (see Özel, cited above, §§ 33-34, and Özdemir, cited above, §§ 35-36). 18. As to the instant case, the Court considers that the Government have not submitted any facts or arguments capable of leading to a different conclusion. It considers it understandable that the applicants – prosecuted in a State Security Court for offences relating to “national security” – should have been apprehensive about being tried by a bench which included a regular army officer, who was a member of the Military Legal Service. On that account they could legitimately fear that the State Security Court might allow itself to be unduly influenced by considerations which had nothing to do with the nature of the case. Consequently, the applicants’ doubts about that court’s independence and impartiality may be regarded as objectively justified (see İncal v. Turkey, judgment of 9 June 1998, Reports 1998‑IV, p. 1568, § 72, in fine). 19. In conclusion, the Court considers that the State Security Court which tried and convicted the applicants was not an independent and impartial tribunal within the meaning of Article 6 § 1 of the Convention. Accordingly, there has been a violation of this provision. 2. Fairness of the proceedings 20. Having regard to its finding of a violation of applicants’ right to a fair hearing by an independent and impartial tribunal, the Court considers that it is not necessary to examine the other complaints under Article 6 of the Convention relating to the fairness of the proceedings before the domestic courts (see, among other authorities, İncal, cited above, § 74 and Ükünç and Güneş v. Turkey, no. 42775/98, § 26, 18 December 2003). II. APPLICATION OF ARTICLE 41 OF THE CONVENTION 21. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Damage 22. Mr Erçıkdı, Mr Çamoğlu and Mr Kaya claimed, in total, 46,000 euros (EUR) in respect of pecuniary damage. The applicants claimed, in total, EUR 25,000 in respect of non-pecuniary damage. 23. The Government did not comment on the applicants’ claims. 24. As regards the alleged pecuniary damage sustained by Mr Erçıkdı, Mr Çamoğlu and Mr Kaya, the Court notes that they failed to produce any receipt or documents in support of their claim. The Court accordingly dismisses it. 25. The Court considers that the finding of a violation of Article 6 constitutes in itself sufficient compensation for any non-pecuniary damage suffered by the applicants in this respect (see İncal, cited above, p. 1575, § 82 and Çıraklar, cited above, § 45). B. Costs and expenses 26. The applicants also claimed EUR 3,000 for the costs and expenses incurred before the Court. They did not submit any receipt or documents in support of their claim. 27. The Government did not express an opinion. 28. According to the Court’s case-law, an applicant is entitled to reimbursement of his costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and were reasonable as to quantum. In the present case, regard being had to the information in its possession and the above criteria, the Court considers it reasonable to award the sum of EUR 1,000 for the proceedings before the Court. C. Default interest 29. The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Declares the application admissible; 2. Holds that there has been a violation of Article 6 § 1 of the Convention as regards the complaint relating to the independence and impartiality of the Izmir State Security Court; 3. Holds that it is not necessary to consider the applicants’ other complaint under Article 6 of the Convention; 4. Holds that the finding of a violation constitutes in itself sufficient just satisfaction for any non-pecuniary damage sustained by the applicants; 5. Holds (a) that the respondent State is to pay the applicants, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 1,000 (one thousand euros) in respect of costs and expenses, to be converted into New Turkish liras at the rate applicable at the day of settlement, plus any tax that may be chargeable; (b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 6. Dismisses the remainder of the applicants’ claim for just satisfaction. Done in English, and notified in writing on 11 April 2006, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Michael O’BoyleNicolas BratzaRegistrarPresident

Lord Justice Moore-Bick : This is an appeal against two orders of Tomlinson J., the first giving judgment for the respondent, Westbrook Resources Ltd ("Westbrook") on its claim against Globe Metallurgical Inc. ("Globe") for damages for breach of contract to be assessed and the second assessing those damages at US$ 1,541,897.66. The dispute between the parties arose out of a contract made in January 2005 for the sale by Westbrook to Globe of 30,000 tons of manganese ore lying at Large, Pennsylvania, c.i.f. Belfre [sic – an error for Belpre], the first shipment to be made by 28th January 2005 with subsequent shipments at intervals thereafter. As both parties were aware, the ore from which the goods were to be drawn formed part of a stockpile which had been assembled by the Defense National Stockpile Center ("DNSC"), an arm of the Defense Logistic Agency ("DLA"), an agency of the United States Government, and was no longer required. It had been stored in the open for many years in unsegregated piles which were not homogeneous, containing lumps and particles of various sizes ranging from pieces several inches across to fine particles. It was an express term of the contract that the ore to be delivered under the contract was to be "Screened over plus ½... screen at DLA". In the event bad weather conditions made it impossible to screen the ore efficiently and as a result Westbrook failed to load the first barge by 28th January 2005. Initially that did not cause Globe a great deal of concern, and, as the judge found, both parties were content to wait for the weather to improve. However, as time passed, it became apparent to Globe that it was unlikely to be able to make use of the ore in the manner it had originally contemplated and there then occurred a period of commercial fencing which led to each party treating the other as in repudiation of the contract. The immediate dispute was whether the goods tendered as the first shipment conformed to the contract in terms of the size of the particles. Globe refused to accept and pay for them on the grounds that they did not and Westbrook treated its conduct as a renunciation of the contract as a whole. The present proceedings were begun by Westbrook in July 2005 seeking to recover from Globe damages for breach of contract in failing to accept any of the goods that it had agreed to buy. Globe contended that it was entitled to treat the contract as discharged, not only because Westbrook had demonstrated an unwillingness to deliver goods that conformed to the contract, but for two other reasons as well, namely, (a) because Westbrook had failed to ship the first instalment by the required date and (b) because by selling and delivering goods to other buyers, Westbrook had disabled itself from performing the contract. Tomlinson J. rejected all of these arguments. He held that Westbrook had complied with its obligations in relation to screening and accordingly that the first shipment conformed to the contract in terms of its composition and the size of the constituent particles. There is no appeal against that part of his judgment. He held that Globe had waived its right to require shipment of the first parcel by 28th January or by any specific date thereafter and he rejected Globe's submission that Westbrook no longer retained a sufficient quantity of ore at Large to enable it to perform the contract. These last two arguments formed the main grounds of appeal. Time of shipment The contract provided as follows: Delivered: CIF Barge bottom Belfre Ohio, by latest 30th April 2005 Shipment: First barge to load before 28th January 2005 with barges to follow no sooner than every 7 days and no more than one month between barges until contract is complete. As both parties were aware, the capacity of the barges used for transporting ore was about 1,500 dwt. It was recognised, therefore, that if the first barge was not loaded until (say) 27th January, the full contractual quantity could not be delivered until mid-June. Nonetheless, since time of shipment is usually of the essence of a contract of this kind, I am prepared to accept for present purposes Mr. Mallin's submission that it was a condition of the contract that the first shipment should be made before 28th January 2005. That, however, is only the beginning of the story. In paragraph 25 of his judgment Tomlinson J. describes the circumstances under which shipment of the first parcel of ore was delayed. In particular he found that Mr Becker, Globe's Purchasing Manager, visited the site on 26th January to meet Mr. Nick Shilatz, whose company USB Metals LLC was responsible for screening and shipping the material on Westbrook's behalf, in order to discuss the operations. The weather was very cold with snow and ice, rendering it impossible to screen the wet ore effectively. Globe was not operationally inconvenienced by Westbrook's inability to load the first barge by 28th January and were content to await developments. On 2nd February Westbrook told Globe that it could do nothing but wait for the weather enabled effective screening to be carried out. Globe did not demur, but, as the judge found, acquiesced in that strategy. He also found that Globe fully appreciated that by so doing it was releasing Westbrook from any obligation either to load the first barge by 28th January or to deliver further quantities within any particular time thereafter. As the weather began to improve screening of the ore began in earnest and Westbrook sought to obtain information from Globe about its requirements. In one sense that was unnecessary because it would have been entitled to start shipping goods as soon as it was ready to do so, but it is routine in commercial circles for parties to communicate with each other in that way. None of Westbrook's messages or telephone calls were answered, however, because, as the judge said, "Globe now embarked on a deliberate policy of not communicating with Westbrook and in particular of not responding to Westbrook's repeated queries as to their, Globe's, intentions and requirements so far as concerned performance of the Large contract". It was clear from the contents of the messages, however, that Westbrook was screening the ore and taking steps to enable the first barge to be loaded. Screening, using a piece of equipment brought to the site for the purpose, began on 21st March 2005. Between 22nd March and 4th April two of Globe's retired employees, Mr. Richard Clark and Mr. Wayne Brooks visited the site regularly to inspect the process on its behalf. The first barge completed loading on 12th April. That judge held in the light of parties' conduct that Globe had waived any right to reject the first barge on the grounds that it had not been loaded by 28th January 2005 and that the parties had plainly not conducted themselves on the basis that delivery of the entire quantity by 30th April 2005 was of the essence of the contract. For reasons I have already mentioned, I doubt whether it could ever have been a condition of the contract that the full contract quantity should be delivered by 30th April, but once Globe had waived the date for the first shipment, completion by that date became doubly impossible unless the parties had agreed to load barges at closer intervals than the contract provided for. For obvious reasons that was never discussed. Mr. Mallin (who did not appear for Globe below) submitted that the judge should not have entertained argument on that question because the point had not been raised by Westbrook in its statement of case. Moreover, he submitted, that to allow it to be raised at a late stage in the trial after its witnesses had finished giving their evidence prevented Globe from dealing with the matter fairly. He relied in particular on the judge's finding, to which I have already referred, that Globe fully appreciated that it was releasing Westbrook from any obligation either to load the first barge by 28th January or to deliver further quantities within any particular timescale thereafter. It is always important for a judge to ensure that all parties to the proceedings have a fair opportunity to deal with the case against them and in some cases a party's failure to raise a point in its statements of case will lead to its being prevented from arguing it at trial. However, the overriding object of proceedings is to do justice between the parties and it is important that form is not allowed to override substance. In this case there is nothing to indicate that counsel appearing for Globe objected to the introduction of this issue or sought an adjournment to enable him to take instructions from his client or call further evidence. I do not find that surprising in view of the fact that the judge had before him detailed evidence of the dealings between the parties during the period from January to May 2005 and that if Globe sought to rely on the contractual date for the first shipment an argument of this kind was bound to be raised. The fact that no objection was made reflects what in my view was the inevitable recognition that the judge had before him all the evidence that was relevant to the question and that Globe's counsel had a sufficient opportunity to address the point. Mr. Mallin criticised the judge for failing to explain the legal basis on which he reached his conclusion, but in my view the conclusion itself was too obvious to call for detailed analysis of that kind. It is well established that if a party to a contract who is entitled to receive performance of an obligation by a stipulated date represents to the other that he is willing to accept performance out of time and the other relies on that representation, he cannot insist on performance by the date originally stipulated. If the representation is made before the time for performance has come, the waiver will operate by way of equitable estoppel. If it is made after the time for performance is past it may also take effect as an election to affirm the contract. In the present case the judge's findings support the conclusion that both before and after the time for performance had come Globe had clearly and unequivocally represented to Westbrook that it would not treat the contract as discharged by reason of late shipment of the first instalment but would accept delivery over an unspecified period in the future. On the faith of that assurance Westbrook continued screening and loaded the first barge. In those circumstances the judge was clearly right in my view to hold that Globe could no longer insist on shipment before 28th January. As the judge recognised, his observation that Globe fully appreciated the effect of what it was doing was unnecessary to his conclusion. Mr. Mallin submitted that the only way in which the parties' rights could have been modified in this case was by a variation of the contract and that since the contract itself provided that no variation was to be effective unless made in writing, there could have been no effective modification of those rights. I do not agree that the parties rights could only be modified by variation, in the sense of a further agreement, for the reasons mentioned earlier, but there is no reason why the contract, including the clause requiring variations to be in writing, could not have been varied orally. In my view the judge reached the only possible conclusion on the evidence before him and I would reject his ground of appeal. Had Westbrook disabled itself from performing the contract? At the time the parties entered into the contract the precise quantity of ore available to Westbrook for delivery under it was uncertain. There were various reasons for that. In the first place, the ore had been lying for many years in open piles over which vegetation had grown. In some places extraction and the natural effects of the weather had created lakes in which unknown quantities of ore lay below the water level. The pile itself was not homogeneous and the proportion of material that would pass over a ½ inch screen varied in different places. That made it difficult to calculate how much ore of the required size remained at Large in early May when Globe treated the contract as discharged. Two questions have to be considered: how much material remained on site and what proportion of it met the contractual requirements? In relation to the first of these questions there was evidence from a variety of sources. The first was the tender for sale published by DLA in 2003 in which Pile 1 (which contained the only relevant material for present purposes) was described as containing 170,709.81 SDT (short dry tons) of "Fines". The second was the evidence of Mr. Shilatz, who had been closely involved in operations at Large extracting the ore, screening it and arranging its carriage by truck to the loading point. He told the judge that his experience of working the ore led him to think that even at the time he was giving evidence there were about 10,000 tons of material remaining in the lake below the level water of the water. The third was a report of an inspection carried out on 22nd June 2007 by a Mr Robert A. Drew, Managing Partner of Maritime Commodity Services Inc., a cargo and marine surveying and commodity inspection and testing company. That report suggested that little, if any, material remained on site at the time of his inspection. Finally, there was evidence in the form of two e-mail messages, one dated 8th June from legal counsel for DNSC at DLA and one dated 15th June 2007 from the Director of Stockpile Contracts and Marketing at DLA, to the effect that all recoverable manganese ore had been removed from the site. A digression – the Stagg Report The amount of material that remained at Large in May 2005 was relevant to the quantum of damages as well as the issue of liability. A hearing to assess quantum was fixed for 25th January 2008. At the opening of that hearing Globe applied to adduce in evidence a report made by Stagg Resource Consultants Inc. ("Stagg"), a company carrying on business as natural resource consultants, of an inspection of the site at Large carried out during January 2008. A copy of the report, which indicated that no more than 1,200 to 1,340 tons of fine-grained manganese bearing material remained in the lake, had been served on Westbrook's solicitors on 23rd January. The judge dismissed the application on the grounds that it had been made at a very late stage in the proceedings and that to allow the evidence to be admitted would cause serious prejudice to Westbrook, which, in the absence of an adjournment, would have no real opportunity of checking its contents or instructing someone to investigate the matter on its behalf. Mr. Mallin submitted that the judge was wrong to take that course because the issue was of considerable significance and justified adjourning the trial to enable Westbrook to consider the matter, albeit on terms that Globe paid the costs thrown away. It must be remembered, however, that this was a matter that called for the exercise by the judge of his discretion having regard to all the circumstances, not least the stage in the proceedings at which the application was made. Judgment on liability was delivered on 16th October 2007. It is not clear exactly when Stagg was instructed, but the report itself records that the survey and sampling on which it was based took place during the second week of January 2008 and the report is dated 21st January. If Globe had acted with reasonable diligence following the delivery of the judgment there is no obvious reason why it could not have been available by the end of November or why an application to adduce it in evidence could not have been made well in advance of the hearing. In those circumstances the judge cannot in my view be criticised for refusing to allow Globe to call that evidence; indeed, I think it would have been surprising if he had taken any other course. It should also be borne in mind that at the trial Globe had relied on expert evidence in the form of the Drew report which tended to show that there was no significant quantity of material remaining on site in June 2007. The judge had not been impressed by it and had preferred the evidence of Mr. Shilatz. Globe was now seeking to adduce a similar but, as it hoped, more persuasive, report covering the same ground. Although the judge had not made any precise finding about the amount of material that remained at Large, he had held that there was enough to enable Westbrook to fulfil the contract. To that extent the matter was by then res judicata and I doubt, therefore, whether the Stagg report was admissible at all. However, it is unnecessary to reach any final conclusion on that point because I am satisfied that the judge was fully entitled to dismiss the application in the exercise of his discretion. That is not the end of the Stagg report, however, because Globe now seeks to rely on it as fresh evidence in support of the present appeal. On an application of this kind one question which the court will normally wish to consider is whether the evidence could with reasonable diligence have been obtained for use at the trial. In my judgment it is clear that it could. Globe says that it did not become apparent until Mr. Shilatz's witness statement was served towards the end of April 2007 that Westbrook would say that a substantial quantity of material remained on site under water. That may be so, although Globe had alleged and bore the burden of proving that insufficient material was available and was aware of the conditions at Large. However, Globe had time to obtain the Drew report, which was put in evidence at the trial, and Mr. Mallin was constrained to accept that if Stagg had been instructed instead of Drew, the report could have been placed before the judge at the trial. Nor do I think that in these circumstances the Stagg report, though credible in itself, is of sufficient significance to justify its admission at this stage. As will become apparent in a moment, the issue to which it relates was one of some difficulty in relation to which there was evidence of very different kinds. If the Stagg report were admitted, there would have to be a re-trial of that part of the case because Westbrook would have to be given an opportunity to serve evidence in response and it would be necessary to put the report to Mr. Shilatz for his comments. At the trial the judge had before him conflicting evidence from quite different sources: a report from a surveyor, Mr. Drew, who had inspected the site two years after the event and oral evidence from Mr. Shilatz whose knowledge of the site was derived from his practical involvement in operations over a considerable period of time. The Stagg report is essentially of the same nature as the Drew report and, though the method of sampling adopted appears to have been more professional, no very good reason has been put forward to explain why on a re-trial the judge could be expected to prefer the evidence of a survey carried out some years after the event to the evidence of Mr. Shilatz. In all the circumstances, I would not give Globe permission to adduce the Stagg report in support of the appeal. I can now return to the issue of the quantity of ore remaining at Large in May 2005. The judge placed little, if any, weight on the e-mails from DLA, but that does not surprise me because they failed to identify the questions in response to which they had been sent, were based on information provided by others and were couched in language that gave little confidence that anyone had made a recent inspection of the site. He was clearly not impressed by Mr. Drew's report and Mr. Drew himself was not called to give evidence in support of it. Again, I am not surprised. The report does not identify the person who attended the site and simply states that twelve points in the lake were sampled in an unspecified manner around the shoreline closest to the hillside. The judge preferred the evidence of Mr. Shilatz to the untested evidence of Mr. Drew. He did so, not simply because he had heard Mr. Shilatz give evidence (though he had and described him as an impressive witness whose manner and evidence he found straightforward and convincing), but because his evidence was based on a considerable amount of practical experience of extracting ore from the site and in particular from the lake. Mr. Mallin submitted that the judge was not entitled to place any reliance on Mr. Shilatz's evidence because he was simply giving the court the benefit of his own opinion of how much ore remained at Large. Such evidence, to be admissible at all, could be given only by an expert. Moreover, he submitted that if Mr. Shilatz had been put forward as an expert witness, the judge would have been bound to reject it as being based on nothing more than random personal observations. It is not uncommon for parties to seek to elicit from a witness who has been called to give evidence of fact evidence that is in reality expert opinion evidence, particularly when the witness occupies a position that calls for a significant degree of training, skill and experience, such as a master mariner or chief engineer. Such attempts should in my view be firmly discouraged, but that is not what occurred in this case. It is been recognised for a long time that sometimes what may appear to be a statement of opinion is no more than a compendious means of giving factual evidence, a proposition now reflected in section 3(2) of the Civil Evidence Act 1972. In the present case Mr. Shilatz had spent a good deal of time working the material, knew where there were deposits beneath the water and had a good idea of the quantity that he could expect to recover. He could no doubt have described the circumstances of operations at Large in some detail and at some length, but he was not asked to do so, confining himself to what he described as "the size of the footprint of the pile and the scraping that we did with the wheel machines etc.". This particular part of his evidence was given in response to a question from the judge, but counsel were offered the chance to ask questions arising out of his answer and neither chose to do so. As a result the evidence was not challenged. Nor does there appear to have been any suggestion that the judge should disregard that part of his evidence. That does not surprise me, since it is very rare nowadays for an objection to the admissibility of evidence to be made in civil proceedings, particularly the Commercial Court. In my view this part of Mr. Shilatz's evidence was admissible, but even if it was not, the judge was entitled to accept and act on it in the absence of any objection to its admissibility. What weight he gave to it was a matter for him, although he must have been fully aware of the basis on which it was given. It may not have been scientific, but it was the best evidence available and the judge had good reason to think that it was likely to be reliable. That being so, the next question is whether the remaining quantity of ore contained enough material to satisfy the balance of the contract. The nature of the material at Large made it very difficult to determine how much would be required to produce the full quantity of screened ore. In January 2004 an analysis by Alfred H. Knight showed that 68.3% of the material passed a ½ inch screen. An analysis by Alternative Testing Laboratories Inc ("ALT") in December 2004 indicated that 65.1% of the material passed a ½ inch screen and an analysis undertaken by GMI in October 2004 found that 85.39% passed a ½ inch screen. These results tend to suggest that significantly less than half the material met the requirements of the contract with Globe. Basing himself on these analyses, an expert witness instructed by Westbrook, Mr. Michael Anthony, calculated that 78,530 tons of raw material would be needed to produce 30,000 tons of ore complying with the terms of the contract. In paragraph 82 of his judgment the judge concluded that on the evidence before him he could do no better than find that 60,000 tons of "raw" material would be required to produce 30,000 tons of screened ore, or in other words, that about half the material met the necessary standard. He did not refer to the analyses carried out by Alfred H. Knight or GMI, but he did take into account the analysis by ATL, emphasising that it was carried out in a laboratory, that the sample was very small by comparison with the bulk and that it would almost certainly have been dried before being analysed. This last factor is of some importance having regard to the fact that the material on site was wet, that the contract (as the judge had held) required only that it be passed over a ½ inch screen and that significant quantities of fines could be expected to adhere to the lumps which remained on the screen. Moreover, the fact that the pile was not homogeneous rendered any samples of reduced value. In making his finding the judge again preferred the evidence of Mr. Shilatz. He had said that there was regular sampling of the material at the site which showed that 70% of the material remained on a ½ inch screen and that he had worked on the basis that 50% of the material was of that size. Mr. Anthony's report was not put to Mr. Shilatz in cross-examination and insofar as this part of his evidence was challenged, he was able to put give cogent answers in defence of his assessment. Mr. Mallin submitted that the judge was wrong to prefer the evidence of Mr. Shilatz to that of Westbrook's own expert, Mr. Anthony, which was the only evidence of a precise scientific nature before the court. In many cases that would be a strong argument, but in this instance the scientific evidence was not as strong as it appeared at first sight. In the course of his evidence Mr. Anthony had explained that he had significant reservations about the reliability of the analyses carried out by ATL, Alfred H. Knight and GMI because he was not persuaded that the samples on which they were based were truly representative of the bulk. His own work had been based on averaging the results obtained by those laboratories and he considered it to have been a valid exercise because none of the results fell outside the range of what was possible, but he clearly did not regard his own results as providing a reliable indication of the composition of the whole bulk. In those circumstances the judge was plainly entitled to consider whether there was other, more reliable, evidence available. Mr. Shilatz had agreed to purchase the fines from Westbrook himself for sale to another buyer and for that reason alone had a strong interest in monitoring the quantities that passed over and through the screen respectively. In the light of these matters the judge was in my view entitled to reject the evidence of the laboratory analyses carried out under conditions very different from those pertaining on site in favour of the practical experience of Mr. Shilatz. I think it would have been more satisfactory if he had referred to the analyses, particular that of Mr. Anthony, and had explained why he did not attach much, if any, weight to them, but perhaps that is a counsel of perfection. In the light of Mr. Anthony's evidence I think it is clear why the judge expressed himself as he did. In the circumstances he was entitled to prefer the evidence of Mr. Shilatz and to find, as he did in paragraph 82, that, taken as a whole, there was an approximate 50/50 cut on oversize versus undersize, in other words, that 60,000 tons of ore was required to produce 30,000 tons of material complying with the contract. One issue that arose in connection with this part of the case was whether about 9,600 metric tons of ore that had been loaded by Westbrook into barges at Large but remained unsold could have been delivered to Globe under the contract. The material had not been screened before leaving Large. In his judgment on liability the judge did not find it necessary to make a finding on this issue because he took the view that an inability to screen at Large the amounts of ore that would otherwise be available to make up a shortfall would not amount to a repudiation of the contract. However, he returned to the matter in the context of the assessment of damages and found in paragraph 19 of his judgment that the ore probably could, if necessary, have been returned to Large for screening, although if Globe wanted to receive the material, it would have been more convenient to screen it elsewhere. He therefore treated that cargo as available to satisfy the contract. The evidence bearing on this question was very thin. Mr. Shilatz said that he could see no difficulty in practice in taking the ore back to Large, but the authors of the e-mails from DLA, to which I referred earlier, expressed the view that it was highly unlikely that Westbrook would have been allowed to return the ore to the site for screening. However, neither of them gave any reason why that should have been the case while operations to recover ore from the site were still going on and the tenor of those messages does not suggest a carefully considered response to whatever question had been asked. Mr. Mallin submitted that Mr. Shilatz's views, expressed in rather vague terms, did not provide a sufficient basis for a finding that Westbrook could have brought the ore back for screening at Large, especially in the face of the (equally vague) messages from DLA to the effect that it was "highly unlikely" that it would have been permitted to do so. As I have already observed, however, that evidence was not particularly persuasive and again it is worth noting that Mr. Shilatz's evidence was not challenged in cross-examination. In my view the judge was entitled to find that, if Globe had insisted on its being screened at Large, the ore could have been returned for that purpose. For all these reasons I am satisfied that there are no grounds for disturbing the judge's findings about the quantity of ore available to Westbrook to satisfy its contract with Globe. It follows that his conclusion that Westbrook had not by May 2005 finally disabled itself from performing the contract must stand. Damages Globe raised three grounds of appeal against the judge's order on the assessment of damages. The first relates to the date for delivery. When he came to assess damages the judge proceeded on the basis that but for Globe's repudiation Westbrook would have delivered the full contract quantity. In doing so he rejected Globe's argument that the whole of the contract quantity had to be shipped by 30th April 2007. Mr. Mallin submitted that he was wrong to do so, but for the reasons given earlier, I am satisfied that the judge was right to hold that Globe could no longer rely on the dates for delivery set out in the contract. The second and third concern the quantity available for delivery and both rely to a greater or lesser degree on the evidence of the Stagg report and the proportion of the bulk that represented material of the contract description. I have already considered both aspects of the case. For the reasons given earlier, I think that the judge was entitled to refuse Globe permission to adduce the Stagg report in evidence and I also think he was entitled to find that about 50% of the material at Large complied after screening with the terms of the contract. It follows that all three challenges to his assessment of damages must fail. For these reasons I would dismiss the appeal. Lord Justice Wall: I entirely agree with the judgment of Moore-Bick L.J. which I have had the advantage of reading in draft. Like him, I would dismiss this appeal. With all possible respect to the arguments advanced by the appellant, this strikes me, as a non-specialist in the field, as a very simple case. The appellant, as it seems to me, made a clear bargain for the purchase of manganese ore. At a later stage, notably when the price of the product fell, it repented of its bargain, and sought to extract itself from it. I am, I hope, the first to recognise that if the appellant had a legitimate basis for extracting itself from its bargain, it had the right to do so. In my judgment, however, none of the arguments advanced by the appellant even begin to demonstrate a basis for so doing. In particular, I am entirely satisfied that the judge was entitled to rely on the evidence of Mr. Shilatz. Not only did he have an unrivalled knowledge of the site, but as Moore-Bick L.J. makes clear in paragraphs 24 and 25 of his judgment, his was the best evidence available, and much of it was, effectively, unchallenged. Moore-Bick L.J. has, with what I hope I can properly describe as his customary clarity, analysed the contractual relationship between the parties. I am in no doubt whatsoever that he has reached the right result, and that his penetrating legal analysis coincides fully with the merits. For all the reasons he gives, therefore, I too would dismiss this appeal. Lord Justice Pill: I agree that the appeal should be dismissed for the reasons given by Moore-Bick L.J.

Arising out of SLP Crl. No.896 of 2005 P. SINGH, J. Special leave granted. The appellant herein was found guilty of the offence under Section 302 read with Section 34 of the Indian Penal Code and was sentenced to undergo imprisonment for life and to pay a fine of Rs.2,000/-. He preferred an appeal before the High Court of Punjab and Haryana at Chandigarh against his companyviction and sentence which was registered as Criminal Appeal No. 29-DB of 2000. The said appeal was admitted for hearing on November 3, 2001. The appellants application for grant of regular bail was dismissed by order dated September 8, 2004. One of the company accused namely, Satwant Singh was granted bail by the High Court by order dated September 17, 2004 since he had suffered imprisonment for three years after his companyviction and, therefore, was companyered by the ratio of the judgment in Dharampal Vs. State of Haryana 2000 1 C.L.R.74. The case of the appellant is that his case is also companyered by the said judgment and, therefore, he should also be released on bail. It was submitted on his behalf that in terms of the law as laid down in Dharampals case, he having undergone more than three years of actual sentence he deserves to be released on bail. The second bail application preferred by the appellant being Criminal Miscellaneous No.42316 of 2004 was dismissed by the High Court by its Order dated October 29, 2004. The High Court while rejecting the bail application observed that the appellant had number undergone three years of actual sentence after companyviction, inasmuch as he had only undergone three years, one month and six days of sentence after companyviction, and out of this period, he had remained on parole for eight months and twelve days. In sum and substance, the Court rejected his bail application on the ground that he had remained in actual custody after companyviction only for two years and five months. It was submitted before us in this appeal that in view of the ratio in Dharampals case, the appellant ought to have been released on bail, he having remained in custody for more than four years. It was submitted that it makes numberdifference in principle whether the appellant remained in custody for three years or more after his companyviction, or whether he remained in custody for such or longer period since he was first arrested in companynection with the case. We have carefully perused the judgment of the Punjab and Haryana High Court in Dharampals case supra . Strictly speaking the case of the appellant is number companyered by the directions companytained in the aforesaid decision which directs that life companyvicts, who have undergone atleast five years imprisonment, of which atleast three years should be after companyviction, should be released on bail pending the hearing of their appeals, should they make an application for this purpose. This was of companyrse, companyfined to the cases which fall under categories C, D and E enumerated in the judgment. Counsel for the State submitted that the Punjab and Haryana High Court in Dharampals case did number intend to lay down any invariable rule of universal application for grant of bail. It only laid down guidelines which may be kept in mind by a Court while companysidering an application for grant of bail. We numberice that in Dharampals case, the High Court referred to several decisions of this Court viz Hussainara Khatoon and others Vs. Home Secretary, State of Bihar 1980 1 SCC 81 Supreme Court Legal Aid Committee representing under-trial Prisoners Vs. Union of India and others 1994 6 SCC 731 Kashmira Singh Vs. The State of Punjab 1977 4 SCC 291 and Kadra Pehadiya and others Vs. State of Bihar 1981 3 SCC Apart from these cases, companynsel for the parties have also drawn our attention to some other decisions of this Court namely Akhtari Bi Vs. State of M.P. 2001 4 SCC 355 and Abdul Rehman Antulay and others Vs. R.S.Nayak and another 1992 1 SCC 225. It is numberdoubt true that this Court has repeatedly emphasized the fact that speedy trial is a fundamental right implicit in the broad sweep and companytent of Article 21 of the Constitution of India. The aforesaid Article companyfers a fundamental right on every person number to be deprived of his life or liberty except in accordance with the procedure prescribed by law. If a person is deprived of his liberty under a procedure which is number reasonable, fair, or just, such deprivation would be violative of his fundamental right under Article 21 of the Constitution of India. It has also been emphasized by this Court that the procedure so prescribed must ensure a speedy trial for determination of the guilt of such person. It is companyceded that some amount of deprivation of personal liberty cannot be avoided, but if the period of deprivation pending trial becomes unduly long, the fairness assured by Article 21 would receive a jolt. These are observations made in several decisions of this Court dealing with the subject of speedy trial. In this case, we are companycerned with the case where a person has been found guilty of an offence punishable under Section 302 IPC and who has been sentenced to imprisonment for life. The Code of Criminal Procedure affords a right of appeal to such a companyvict. The difficulty arises when the appeal preferred by such a companyvict cannot be disposed of within a reasonable time. In Kashmira Singh Vs. State of Punjab 1977 4 SCC 291 this Court dealt with such a case. It is observed - The practice number to release on bail a person who has been sentenced to life imprisonment was evolved in the High Courts and in this Court on the basis that once a person has been found guilty and sentenced to life imprisonment, he should number be let loose, so long as his companyviction and sentence are number set aside, but the underlying postulate of this practice was that the appeal of such person whould be disposed of within a measureable distance of time, so that if he is ultimately found to be innocent, he would number have to remain in jail for an unduly long period. The rationale of this practice can have numberapplication where the Court is number in a position to dispose of the appeal for five or six years. It would indeed be a travesty of justice to keep a person in jail for a period of five or six years for an offence which is ultimately found number to have been companymitted by him. Can the Court ever companypensate him for his incarceration which is found to be unjustified? Would it be just at all for the Court to tell a person We have admitted your appeal because we think you have a prima facie case, but unfortunately we have numbertime to hear your appeal for quite a few years and, therefore, until we hear your appeal, you must remain in jail, even though you may be innocent? What companyfidence would such administration of justice inspire in the mind of the public? It may quite companyceivably happen, and it has in fact happened in a few cases in this Court, that a person may serve out his full term of imprisonment before his appeal is taken up for hearing. Would a judge number be overwhelmed with a feeling of companytrition while acquitting such a person after hearing the appeal? Would it number be an affront to his sense of justice? Of what avail would the acquittal be to such a person who has already served out his term of imprisonment or at any rate a major part of it? It is, therefore, absolutely essential that the practice which this Court has been following in the past must be reconsidered and so long as this Court is number in a position to hear the appeal of an accused within a reasonable period of time, the Court should ordinarily, unless there are companyent grounds for acting otherwise, release the accused on bail in cases where special leave has been granted to the accused to appeal against his companyviction and sentence. Similar observations are found in some of the other decisions of this Court which have been brought to our numberice. But, however, it is significant to numbere that all these decisions only lay down broad guidelines which the Courts must bear in mind while dealing with an application for grant of bail to an appellant before the Court. None of the decisions lay down any invariable rule for grant of bail on companypletion of a specified period of detention in custody. Indeed in a discretionary matter, like grant or refusal of bail, it would be impossible to lay down any invariable rule or evolve a strait jacket formula. The Court must exercise its discretion having regard to all the relevant facts and circumstances. What the relevant facts and circumstances are, which the Court must keep in mind, has been laid down over the years by the Courts in this companyntry in large number of decisions which are well known. It is, therefore, futile to attempt to lay down any invariable rule or formula in such matters. Counsel for the parties submitted before us that though it has been so understood by Courts in Punjab, the decision of the Punjab and Haryana High Court in Dharampals case only lays down guidelines and number any invariable rule. Unfortunately, the decision has been misunderstood by the Court in view of the manner in which the principles have been companyched in the aforesaid judgment. After companysidering the various decisions of this Court and the difficulties faced by the Courts, the High Court in Dharampals case observed- We, therefore, direct that life companyvicts, who have undergone at least five years of imprisonment of which at least three years should be after companyviction, should be released on bail pending the hearing of their appeals should they make an application for this purpose. We are also of the opinion that the same principles ought to apply to those companyvicted by the Courts Martial and such prisoners should also be entitled to release after seeking a suspension of their sentences. We further direct that the period of five years would be reduced to four for females and minors, with at least two years imprisonment after companyviction. We, however, clarify that these directions shall number be applicable in cases where the very grant of bail is forbidden by law. We agree with the submission urged before us that the directions companytained in the aforesaid judgment of the High Court are only in the nature of guidelines and the High Court should number be understood to have laid down an invariable rule to be observed with mathematical precision. In fact in the very first paragraph of the judgment the learned Judges observed that they were making an attempt to frame certain guidelines for the grant of bail. Difficulties may arise if such a direction is treated as an invariable rule in the matter of grant of discretionary relief. The rule laid down in Dharampals case may be inferentially understood to mean that unless a companyvict has undergone five years imprisonment, he should number be released on bail. This would again lead to travesty of justice, because in a given case having regard to the evidence on record and the reasoning of the Court companyvicting the accused, the High Court in an appeal may well be persuaded and justified in granting bail to the appellant even while admitting his appeal. We, therefore, hold that the High Court of Punjab and Haryana in Dharampals case laid down guidelines which ought to be kept in mind by Courts dealing with applications for grant of bail in a pending appeal. It does number lay down any hard and fast rule of universal application. As we have observed earlier, it would be futile to lay down any strait jacket formula in such matters. So far as the instant appeal is companycerned by our order dated May 12, 2005 we have granted bail to the appellant who had remained in custody for about six years and four months. Apart from the facts and circumstances of the case, we also numberice the fact that the companyaccused had been released on bail by the High Court.

Lokeshwar Singh Panta, J. These appeals are directed against the judgment and order dated 10.10.2003 in Misc. Application No.186 of 2000 impugned order-1 order dated 14.07.2004 in Misc. Application No.178 of 2004 in M. A. No. 186/2000 impugned order-2 and order dated 18.08.2004 in Misc. Application No.263 of 2004 in M. A. No.186/2000 impugned order-3 passed by the Special Court companystituted under The Special Courts Trial of Offences Relating to Transactions in Securities Act, 1992 hereinafter referred to as the Act at Bombay. The short facts leading to the present proceedings are as under- The appellant herein held 200 shares of Hero Honda Company - fourth respondent-company herein. In and around September 2003, the appellant desired to dispose of the said 200 shares, but he allegedly lost the same. On 21.09.1993, the appellant got a police report registered in the Sihani Gate Police Station, Ghaziabad. On or about 22.09.1993, the appellant approached and requested the fourth respondent-company for issue of duplicate Certificates in lieu of his lost shares along with all supporting documents, indemnity bonds and affidavits, etc. On 05.01.1994, the fourth respondent-company got an Advertisement Public Notice published in Newspapers calling upon to file objections, if any, against issue of duplicate Share Certificates to the appellant and also striking a numbere of caution to the public at large number to deal with the shares so specified in the advertisement. Having number received any objection from any one, the fourth respondent-company on 03.02.1994 issued duplicate Share Certificates to the appellant. The appellant transferred his shares in favour of Jayant Davar - the first respondent herein, which were registered in his name by the fourth respondent-company on 18.10.1994. The first respondent had been offered 50 Bonus Shares by the fourth respondent-company, which offer was profitably availed by him. The first respondent sold transferred 200 shares which he got from the appellant and 50 Bonus Shares companysequently acquired by him, but the fourth respondent-company did number register the said transfer. This was done on the asking of the CBI, who was investigating the Share Transfer Scam, and advised the first respondent and the transferee to approach the Custodian - second respondent herein. The fourth respondent-company asked the appellant to enforce indemnity bond, but the appellant did number agree as the fourth respondent-company had number suffered any loss, etc. as a result of the transaction. The case of the first respondent before the Special Court was that he purchased 800 shares of fourth respondentcompanypany through its broker M s. Jamnadas Morarjee Co. during the months of July-August, 1994 and thereafter the said shares were sent for transfer to the Registrar and Share Transfer Agent of respondent No. 3, i.e. MCS Limited. The shares were finally transferred in his name on the basis of valid instruments of transfer and, accordingly, a ledger folio No. 141982 has been allotted to him. The second respondent filed Miscellaneous Application No. 186/2000 before the Special Court claiming 200 shares which were transferred in his name from the appellant and 50 bonus shares in the ratio of 14 as issued by third respondent against those 200 shares. The first respondent stated before the Special Court that he had sold 250 shares in the open market through his share broker M s. TRC Securities Pvt. Ltd. in the month of May June, 1997. Upon lodgment of the said 250 shares with MCS Limited, they, vide their letter dated 26.06.1997 refused to transfer register the shares in the name of the lodger i.e. Morgan Stanley Assets Management Inc., A c Morgan Stanley Institutional Fund Inc. Emerging Markets Portfolio. Subsequently, the 250 shares were returned to first respondent as Bad Delivery under two different companyering letters dated 26.06.1997 and 10.07.1998 respectively. MCS Limited received a letter bearing No. 5696/Cus Mob UR- CBI/96 533B dated 29.02.1996 from the second respondent- Custodian regarding stop transfer of the shares in favour of any person without permission of the Custodian. The MCS Limited also enclosed companyy of transfer deeds, share certificates and Custodians letter dated 29th February, 1996 along with their letter to the second respondent who on going through the same, came to know that 117335 shares of fourth respondentcompanypany belonged to the Notified Persons of the group of Late Harshad S. Mehta which were seized by CBI and remained in their custody. The letter also revealed that Late Harshad S. Mehta and his group were numberified by the Custodian on 8.6.92 under the provisions of the Act and all properties belonging to them stood attached simultaneously with the issue of the numberification and the fourth respondent-company was informed number to deal with those shares in any manner including transfer, pledge, issue of duplicate etc. and all companyporate benefits admissible on these shares may be held in abeyance till the orders passed by the learned Special Judge. In view of the above stated circumstances, the first respondent requested the fourth respondent-company to transfer the shares in the name of the buyer who purchased the same in the open market. The fourth respondentcompanypany vide their letter dated 8th October, 1997 informed the first respondent that one Mr. Mahendra Pal Tyagi - appellant herein was holding the said 200 shares under Ledger Folio No. 128027 bearing Share Certificate Nos. 58193, 46706, 179855 which he claimed having been lost and requested the fourth respondent-company to issue duplicate shares in lieu of the aforesaid original lost share certificates. The appellant also submitted the Police Report, indemnity bond, affidavit along with the request letter to the fourth respondent-Company who issued duplicate shares to the appellant under Share Certificate Nos. 191549-191552. The duplicate shares subsequently were lodged by the first respondent for transfer in his name and, accordingly, the fourth respondent-company transferred the said shares on 18th October, 1994 in the name of the first respondent. The fourth respondent-company thereafter received a letter dated 29th February, 1996 from the office of the second respondent-Custodian whereby the Custodian asked the fourth respondent-company to stop transfer of certain shares including the shares which are the subject matter of these proceedings and also held in abeyance all the benefits accruing on those shares as the said shares were seized by the CBI at the time of raid laid on the places of Late Harshad S. Mehta. The letter of 8th October, 1997 revealed that the list furnished by the second respondent-Custodian includes original shares of the appellant which he allegedly lost. The fourth respondent-company, therefore marked stop transfer against the duplicate shares which were transferred in the name of the first respondent and advised the first respondent to approach the stock exchange through whom the first respondent purchased those shares so that through proper channel, the introducing broker as well as the share holder, i.e. the appellant companyld be asked to replace the said shares with good shares. The first respondent admitted that he purchased 200 shares from the open market through their share broker and paid the companysultation thereof and thereafter the shares were also registered in his name by the fourth respondent-company as per the provisions of the Companies Act, 1956 and he had absolutely numberknowledge about the duplicate shares being issued in the name of the appellant by the fourth respondent-company. He claimed that in the facts and circumstances narrated in the application, first respondent is the real and only owner of these shares and, accordingly, all companyporate benefits accrued thereon since the date of registration of the 250 shares in his name, be paid to him in the interest of justice. By reasons of the impugned order dated 10.10.2003, the learned Special Judge allowed Misc. Application 186 of 2000 filed by the first respondent. It was directed- This application relates to 250 shares of respondent number3 companypany. It appears that the respondent number4 who was holding these shares had sold the shares on the Stock Exchange which were purchased by the numberified party. Taking advantage of the fact that the numberified party because of the numberification companyld number apply for transfer of the shares, the respondent number4 applied for duplicate shares by making a misrepresentation that he has lost the shares and received from the Company the duplicate shares. Those duplicate shares were again sold and they were number purchased by the applicant. The principal prayer in the application is for lifting of attachment on these 250 shares. It is obvious that these 250 duplicate shares have been issued by the Company because of misrepresentation made by the respondent number4. By an order dated 16th July, 2003, the respondent number4 was directed to deposit in this Court an amount of Rs.6,00,000/-. The respondent number4 has number obeyed this order. In the affidavit filed by the respondent number4, the explanation that has been given by him is incapable of being accepted. There are numberdocuments produced in support of that explanation. It is thus clear that there is numberquestion of attachment of 250 shares of the respondent number3 companypany being lifted. The relief to which the applicant would be entitled is to recover from the respondent number4 the value of the shares. It is clear from the report submitted by the Custodian, that these shares were purchased by the Applicant in the month of June 1994 and payment for it was made by cheque dated 6th July 1994 and the amount was Rs.2,94,400/-. The applicant therefore would be entitled to a decree against the respondent number4 in this amount. The application therefore is disposed off in the following terms. The respondent number4 is directed to pay to the applicant an amount of Rs.2,92,400/- with interest at the rate of 18 p.a. from 6th July 1994 till realization. Application is disposed off. Being aggrieved, the appellant filed Review Application being Misc. Application No.178 of 2004 under clause f of sub-section 5 of Section 9-A of the Act before the learned Special Judge. The said application came to be rejected on 14.07.2004 vide order, which reads as under- Called for hearing and Final Disposal None for the applicant Mr. Modi i b Yogesh Thakur for Respondent No.1 Mr. J. Chandran i b M s P.M. Mithi Co. for the Custodian Respondent No.2 Mr. V.M. Singh i b Arun Mehta for Respondent No.4 Coram D.K. Deshmukh, J. Judge, Special Court Dated 14th July, 2004 C. Matter called twice. None present for the applicant. Application rejected. Again, the appellant preferred Misc. Application No.263 of 2004 for restoration of the Review Petition, which was dismissed and the following order came to be passed on 18.08.2004- Even assuming that due to mistake of the lawyer, lawyer companyld number remain present and therefore, the review petition was rejected, after having heard the learned companynsel appearing for the Applicant on the review application, I find that there is numberreason to review the order dated 10th October, 2003. Applicant was Respondent No.4 in Misc. Application No.186 of 2000. By order dated 16th July, 2003, he was directed to deposit an amount of Rs.6 lakh in the companyrt. He did number obey that order. Therefore, the Applicant is number entitled to any indulgence from this companyrt. Misc. Application disposed of. Hence, the appellant has assailed the above-said three orders before this Court in these appeals preferred under Section 10 of the Act. During the pendency of the appeals in this Court, the legal representatives of late Harshad Mehta are substituted as respondents Nos. 3 i , ii and iii . Mr. Abhishek Vikas Singh, learned companynsel appearing on behalf of the appellant, in assailing the orders of the learned Special Judge, inter alia, companytended that the learned Special Judge did number appreciate the fact that the original shares were number valid and legal and had companye to the hands of the numberified person deceased Harshad Mehta in illegal and wrongful manner and were never transferred and registered in his name in accordance with law and as such, the appellant companyld number have been penalized for the acts and deeds of a third person, who had acquired the shares in illegal and clandestine manner. He submitted that the action of the appellant being bona fide and reasonable, he had faced loss at last stage, even when the duplicate shares were already stood transferred in his name in due companyrse after following all legal procedures and due application of law. The learned companynsel then companytended that the orders of the learned Special Judge impugned in these appeals have resulted in manifest error and miscarriage of justice to the appellant, which deserve to be set aside. Mr. Rohit Aggarwal, learned companynsel appearing on behalf of the first respondent, on the other hand, would inter alia submit that the learned Special Judge passed an order based upon the material on record which would reveal that the appellant had companymitted a fraud of selling 200 shares on the Stock Exchange and thereafter applying to the fourth respondent-company for duplicate shares on the plea that the said shares had been stolen. He also submitted that the learned Special Judge had number burdened the appellant with payment for the entire amount of 800 shares as alleged, but in fact has directed payment of Rs.2,92,400/- with interest thereon, which is the value of 250 shares only. Mr. Subramanium Prasad, learned companynsel appearing on behalf of second respondent-Custodian, would companytend that the appellant had sold the shares in question to late Harshad Mehta, a numberified person under Section 3 2 of the Act and deceased Harshad Mehta companyld number apply for transfer of those shares, the appellant, on a misrepresentation that he had lost the shares, applied for and got duplicate shares from the fourth respondent-company, which were also sold by the appellant to first respondent. Learned companynsel for the respondents, in nutshell, supported the orders of the learned Special Judge which, according to them, cannot be found faulty or invalid on any grounds whatsoever as alleged by the appellant. We have given our thoughtful and anxious companysideration to the respective companytentions of the learned companynsel for the parties and perused the material on record. The companytentions of the learned companynsel for the appellant at the first blush sound attractive, yet we are afraid to accept the same. The undisputed facts are that the first respondent purchased 800 shares including 200 shares the subject matter of the proceedings of fourth respondent-company in open market in the months of July and August, 1994 through its share broker M s. Jamnadas Morarjee Co., C-4 Defence Colony, New Delhi-24. The fourth respondent-company allotted 50 bonus shares to him against the said 200 shares in the ratio of 14. In all, the dispute before the learned Special Judge was limited to 250 shares. Late Harshad S. Mehta, who was a party - third respondent herein, is represented through his legal representatives Nos. 3 i , ii and iii respectively. Indisputably, deceased Harshad Mehta was a numberified person under sub-Section 2 of Section 3 of the Act and the appellant transacted the said shares with the deceased Harshad S. Mehta entered after the first day of April, 1991 and on or before 1st June, 1992, the stipulated period companyered under the Act. Claim submitted by the first respondent before the learned Special Judge would arise out of the transaction of the said 250 shares between Late Harshad S. Mehta and the appellant during the aforesaid period. The entire properties belonging to the numberified party on the day of numberification would stand attached in terms of Section 3 2 of the Act. The appellant knowing fully well that he has already sold the shares to late Hashad S. Mehta, he made a false representation to the fourth respondent-company that as the appellant had lost original shares, therefore, duplicate shares were allotted to him which stood in his name since late Harshad S. Mehta had number applied for change of the name. The whole exercise was done by the appellant on the basis of his mis-representation. This Court in L.S. Synthetics Ltd. v. Fairgrowth Financial Services Limited Anr. 2004 11 SCC 456, held that Section 3 3 of the Act should be literally companystrued and all properties belonging to the numberified party on the date of numberification would stand attached. In terms of the provisions of sub-section 3 of Section 3 of the Act, the properties belonging to deceased Harshad S. Mehta being a numberified person stood attached. Such attachment being automatic, numberfinding was required to be arrived at that the same had been acquired during the numberified period. In Tejkumar Balakrishna Ruia v. A.K. Menon 1997 9 SCC 123, this Court held that the terms of subsection 3 Section 3 are clear that the property that belongs to a numberified person stands attached simultaneously with the issue of numberification that makes him a numberified party. It is said that the words on or from the date of numberification indicate the point of time at which the attachment takes effect this is reiterated by the words shall stand attached simultaneously with the issue of the numberification. Further that this also indicates that numberspecial numberification or order in regard to the attachment is necessary. In the latest judgment of this Court in Ashwin S. Mehta Ors. v. Union of India Ors. 2006 2 SCC 385, this Court reiterated that property, be it shares, dividends and bonus and rights shares that belongs to a numberified person would also be attached property. In this view of the matter, learned Judge of the Special Court has rightly companycluded that 200 duplicate shares were obtained by the appellant by misrepresentation. The said 200 shares plus 50 Bonus shares were attached by the CBI in proceedings initiated against deceased Harshad S. Mehta, therefore, the attached shares of the fourth respondentcompanypany companyld number be transferred to any party.

CIVIL APPELLATE JURISDICTION Civil Appeal No. 115 of 1950. Appeal from the Judgment and Decree of the Bombay High Court Macklin and Rajadhyaksha JJ. dated 14th March. 1945, in First Appeal No. 274 of 1941 which arose out of a decree dated 15th March, 1941, of the First Class Subordinate Judge of Satara in Civil Suit No. 890 of 1938. R. Madbhavi K. R. Bergeri, with him for their appellant. J. Umrigar for respondent No. 1. C. Setalvad, Attorney-General for India K. G.Datar, with him for respondent No. 2. 1951. December 17. The Judgment of the Court was delivered by MUKHERJEA J.--This appeal is directed against a judgment and decree of a Division Bench of the Bombay High Court dated the 14th of March, 1945, which affirmed, on appeal, the decision of the First Class Subordinate Judge, Satara, passed in Civil Suit No 890 of 1938. The appellants before us filed the suit as plaintiffs in the original companyrt, for establishment of their title to the property in dispute which is known as Chikurde Estate, on the allegation that they were, under the Hindu Law, the nearest heirs of one Bhimabai, who was admittedly the last holder of the estate. The suit was brought initially against one defendant, namely, the Court of Wards, Satara, and admittedly the Court of Wards took possession of the property of Bhimabai, while she was alive, and is companytinuing in possession of the same even number after her death. Later on, defendants 2, 3 and 4, who put forward rival claims of succession to the estate, were allowed to intervene in the suit and were added as partiesdefendants. The Court of Wards, which number figures as defendant No. 1, took up, all through, a neutral attitude and expressed its willingness to hand over the estate to any person who would be declared to be rightfully entitled to it by the Court. The Courts below have negatived the claims of defendants 2 and 3 and they have number companye up to press. their claims in the appeal before us. The two rival claimants, who are number on the scene, are the plaintiffs on one side and defendant No. 4 on the other, and the whole companytroversy in this appeal centres round the point as to who amongst them have the preferential right to succeed to the disputed estate after the death of Bhimabai. To appreciate the material facts of the case and the companytentions that have been raised by the parties, it will be companyvenient to refer to the following genealogy which is number disputed by either side. Vithalrao died 1896 --------- Ganpatrao died 1914 Nilkanthrao Anandrao Tangawa alias died 1899 died 1913 Anandibai Deft. 2 Krishnabai Adopted Deft. 3 Vithalrao Deft. 4 Babasaheb on adopted by 3-2-1939. Krishnabai on 4-11-1924 Respdt. 2. Firangojirao died Tanakka predeceasangabai died 15-11-1919. ed her sister Gangabai on 14-2-1924 without any issue . Nathgauda Annagauda Balgauda Plff. 2 Bhimabai daughter Plff. No. 1 Appellant No. 2. died on 27-1-1932 . Appellant No. 1 It is the case of both the parties that Vithalrao, whose name appears at the top of the pedigree table, and who was the companymon ancestor of the parties, held the disputed property as watan property appertaining to the hereditary office of Deshmukhi service. Vithalrao was the recipient of a Sanad dated 28th November, 1892, under what was called the Gordon Settlement, the object of which was to companymute services of certain watandars in that part of the companyntry and relieve them from liability to perform the services attached to their office on certain terms and companyditions which were agreed upon between the Government on the one hand and the watandars on the other. The terms of the settlement were generally embodied in Sanads and one such Sanad was granted to Vithalrao in 1892. It is number disputed that after this settlement Vithalrao companytinued to be watandar as defined by Bombay Act III of 1874, and that the watan in dispute was an impartible estate governed by the rule of primogeniture. In 1896 Vithalrao died and he was succeeded by his eldest son Ganpatrao under the law of primogeniture. Ganpatrao died childless in 1914, leaving behind him his two widows Anandibai and indirabai, of whom the senior widow Anandibais defendant No. 2 in the present suit. Both the two brothers of Ganpatrao, namely, Nilkanthrao and Anandrao had predeceased him. Nilkanthrao left behind him one son named Firangojirao and two daughters, while Anandrao died childless, leaving him surviving his widow Krishnabai, who later on adopted Vithalrao, who is defendant No. 4 in the suit. Ganpatrao had left a will bequeathing all his watan and numberwatan properties to Firangojirao and the latter succeeded to the estate both under the will as well as under the law of lineal promogeniture, he being the only male member of the family at that time. Firangojirao died in 1919, leaving Bhimabai, his only daughter, who was a minor at that time. On 23rd September, 1921, the name of Bhimabai was entered in the village records as watandar in place of Firangojirao and in the year following the Court of Wards, Satara, assumed superintendence of Bhimabais estate. On 11th October, 1923, the Government of Bombay by their Resolution No. A-471 declared the Chikurde Deshmukh watan as lapsed to Government, presumably on the ground that there was numbermale heir in the watan family after the death of Firangojirao. A new entry was then made in the village register which recorded Bhimabai number as watandar, but as heir of Firangojirao and the lands were described as being companyverted into ryotvari lands after forfeiture by Government and subjected to full assessment. On 4th of November, 1924, Krishnabai, the widow of Anandrao, adopted defendant No. 4 as a son to her husband. On 27th January, 1932, Bhimabai died unmarried and her estate companytinued under the management of the Court of Wards. The appellants before us, who are the sisters sons of Firangojirao, brought this suit on 5th of August, 1938, and their case, in substance, is that after the Resolution of the Government passed on 11th of October, 1923, the Chikurde estate ceased to be a watan property and the succession to such estate was governed by the ordinary rules of Hindu Law and number by the provisions of Act V of 1886 which postpone relations claiming through a female to a male member of the watan family. It was urged that the property being the absolute property of Bhimabai and she having died while still a maiden, the plaintiffs, being the nearest heirs of her father, were entitled to succeed under the general rules of Hindu Law. As said already, the defendant No. 4, who is respondent No. 2 in this appeal, was added as a party-defendant sometime after the suit was filed and the companytention raised on his behalf was that by reason of his having been duly adopted. to Anandrao on 4th of November, 1924, he was the nearest heir to the property in suit which was a watan property and prayed that a declaration in his favour might be made by the companyrt. The defendant No. 3 claimed to have been adopted as a son to her husband Ganpatrao by Anandibai, the defendant No. 2, some time in February 1939. The trial companyrt on a companysideration of the evidence came to the companyclusion that the Chikurde estate was an impartible property governed by the rules of primogeniture. It was held that, it being an impartible joint estate, the rule of survivorship still applied and companysequently on the death of Ganpatrao, without leaving any son, the estate passed by survivorship to the next senior branch which was that of Firangojirao. The view taken by the Subordinate Judge is that after Firangojiraos death Bhimabai took only a provisional interest in the property which was liable to be divested by the emergence of a male member by adoption in the family and in fact she was legally divested of her interest in the property when defendant No. 4 was adopted by Anandraos widow. In the opinion of the Subordinate Judge the resolution of the Government treating the Chikurde estate as lapsed was premature and companyld number be made legally so long as there were widows living, who were capable of adopting sonS. The trial judge held further that even if Bhimabai was taken to have held the property as watan till her death, the next heir to succeed under the Bombay Act V of 1886 would be defendant No. 4 and number the plaintiffs. The result was that the plaintiffs suit was dismissed. The plaintiffs then took an appeal to the High Court of Bombay and this appeal was heard by a Division Bench companysisting of Macklin in and Rajadhyaksha JJ. The learned Judges dismissed the appeal and companyfirmed the decision of the trial companyrt, though the reasons given by them are number the same as those given by the trial judge. It was held by the High Court, on a companystruction of the Sanad granted to Vithalrao in 1892, that the order of lapse or forfeiture of the watan estate passed by the Government in the year 1923 on the ground of failure of male heirs was number a valid and legal order and although under the relevant clause of the Sanad the Government companyld, in the absence of male heirs, resume the watan in the sense that they companyld make the property liable to full assessment, the other incidents of the watan estate still companytinued. Consequently, Act V of 1886 would still govern succession to such property and defendant No. 4 had preferential rights over the plaintiffs under section 2 of that Act. It is against this decision that the plaintiffs have companye up on appeal to this companyrt. The learned Counsel appearing on behalf of the plaintiffs-appellants has raised a two-fold companytention in support of the appeal. It has been companytended in the first place that the High Court was in error in holding that the Chikurde estate retained its watan character even after it was resumed by the Government by its Resolution of 11th October, 1923 and if it was number-watan, the plaintiffs would be nearer heirs to Bhimabai than defendant No. 4. The other companytention raised is that even if the property remained watan in the hands of Bhimabai, the latter would have to be regarded as a watandar in the true sense of the word and would be a fresh stock of descent. In that view the plaintiffs would companye within the family of watandar as defined in Bombay Act V of 1886, whereas the defendant No. 4 would be outside the family. The points undoubtedly are interesting, but having regard to the view which we have decided to take, it would number be necessary to investigate the merits of either of them. It may be pointed out that the learned Judges of the High Court proceeded throughout on the assumption that the plaintiffs would have preferential rights of succession if the property was regarded as number-watan in the hands of Bhimabai. It is only if the property was watan that the Bombay Act of 1886 will apply and the plaintiffs, who were descended through females, would be postponed to defendant No. 4 who by adoption became a male member of the family. Mr. Setalvad, appearing for defendant No. 4 who is respondent No. 2 in this appeal, companytended before us that this assumption is wrong, and that even if the property was regarded as numberwatan property and belonging absolutely to Bhimabai as her stridhan, still as heir of Bhimabais absolute property the defendant No. 4 would have higher rights than the plaintiffs. As this point was number touched upon in the judgments of either of the companyrts below, we heard the learned Counsel on both sides at great length upon it and the companyclusion that we have reached is that the companytention of the learned AttorneyGeneral is well-founded and must prevail. For the purpose of this argument we would assume that the property in suit was number-watan stridhan property of Bhimabai and the only question is, as to who amongst the rival claimants would be the nearer heir after her death according to the Hindu Law of inheritance ? It is admitted that Bhimabai died while she was a maiden and that a maidens property under the Hindu Law goes in the first place to her uterine brothers, in default of them to the mother and then to the father. This is according to the text of Baudhayana 1 which is accepted by all the companymentators. Viramitrodaya adds to this that on failure of mother and father it goes to their See Mitakshara, Chap. II, sec. XI, para 30. nearest relations 1 . It has been held in a large number of cases that the expression nearest relations of the parents means and refers to the sapindas of then, father and in their default the sapindas of the mother both in order of propinquity 2 . In the case c before us, both the plaintiffs and defendant No. 4 are sapindas of Firangojirao, the plaintiffs being the sisters sons of Firangojirao, while the latter is his paternal uncles son. It is number disputed that apart from the changes introduced by the Hindu Law of Inheritance Amendment Act, Act II of 1929 , the place of the paternal uncles son in the line of heirs under the Mitakshara Law of Succession is much higher than that of the sisters son and the Mayukha Law, which prevails in the State of Bombay, does number make any difference in this respect. Under the Mitakshara Law, the paternal uncle companyes just after the paternal grandfather and his son follows him immediately. By Act II of 1929, however, four other relations have been introduced between the grandfather and the paternal uncle and they are the sons daughter, daughters daughter, sister and sisters son, and the paternal uncle and his son are thus postponed to these four relations by the Hindu Law of Inheritance Act of 1929. The question is, whether the provisions of this Act can at all be invoked to determine the heirs of a Hindu female in respect of her stridhan property. The object of the Act as stated in the preamble is to alter the order in which certain heirs of a Hindu male dying intestate are entitled to succeed to his estate and section 1 2 expressly lays down that the Act applies only to persons who but for the passing of this Act would have been subject to the Law of Mitakshara in respect of the provisions herein enacted, and it applies to such persons in respect only of the property of males number held in companyarcenary and number disposed of by will. Thus the scope of the Act is limited. It governs succession only to the separate property of a Hindu male who dies intestate. It does See Viramitrodaya, Chap. V, Part II, Sec. 9. See Maynes Hindu Law, 11th edition, Art. 621, page 741. number alter the law as regards the devolution of any other kind of property owned by a Hindu male and does number purport to regulate succession to the property of a Hindu female at all. It is to be numbered that the Act does number make these four relations statutory heirs under the Mitakshara Law under all circumstances and for all purposesit makes them heirs only when the propositus is a male and the property in respect to which it is sought to be applied is his separate property. Whether this distinction between male and female propositus is at all reasonable is another matter, but the language of the Act makes this distinction expressly and so long as the language is clear and unambiguous, numberother companysideration is at all relevant. This is the view which has been taken, and in our opinion quite rightly, in a number of cases of the Madras, Patna and Nagput High Courts 1 . We are number unmindful of the fact that a companytrary view has been expressed in certain decisions of the Bombay, Lahore and Allahabad High Courts 2 . The line of reasoning that is adopted in most of the decisions where the companytrary view is taken can be thus stated in the language of Mr. Justice Somjee 3 The Act is number sought to be applied to determine the succession to the stridhan of a Hindu maiden but is sought to be used by the petitioner to ascertain the fourth class of heirs to the stridhan of a Hindu maiden mentioned at page 139 of Mullas Hindu Law The heirs of the father at the time of her death have to be ascertained in accordance with the Hindu Law as it existed at the time of the death of Bai Champubai. Thus the Act companyes into operation for ascertaining the order in which the heirs of her father would be entitled to succeed to his estate, because the heirs of the father Vide Manda Mahalakshmamma v. Mantravadi I.L.R. 1947 Mad. 23 Shakuntalabai v. Court of Wards I.L.R. 1942 Nag. Talukraj Kuer v. Bacha Kuer I.L.R. 26 Pat. 150 Kuppuswami v Manickasari A.I.R. 1950 Mad. 196 . Shamrao v. Raghunandan I.L.R. 1939 Bom. 228 Mst. Charjo v. Dinanath A.I.R. 1937 Lah. 196 Kehar Singh v. Attar Singh A.I.R. 1944 Lah. 442 Indra Pal v. Humangi Debi I.L.R. 1949 All. 816 . Vide Shamrao v. Raghunandan I.L.R. 1939 Bom. 228 at 230 . in the order of propinquity who would be entitled to succeed to him if he died on August 3, 1937, would be the heirs of Bai Champubai in the absence of the uterine brother, the mother and the father. It is true that we have got to ascertain who the heirs of the father are at the date when the daughter dies, but the enquiry is for the purpose of finding out who the successor to the estate of the daughter is.

Judgment of the Court (First Chamber) of 12 July 1979. - Marianne Wörsdorfer, née Koschniske, v Raad van Arbeid. - Reference for a preliminary ruling: Raad van Beroep Zwolle - Netherlands. - Case 9/79. European Court reports 1979 Page 02717 Greek special edition Page 00321 Summary Parties Subject of the case Grounds Decision on costs Operative part Keywords 1 . COMMUNITY LAW - METHODS OF INTERPRETATION - TEXTS IN SEVERAL LANGUAGES - UNIFORM INTERPRETATION - DIFFERENT LANGUAGE VERSIONS TO BE TAKEN INTO ACCOUNT 2 . SOCIAL SECURITY FOR MIGRANT WORKERS - FAMILY BENEFITS - PENSIONERS - RULES AGAINST OVERLAPPING - SPOUSE OF PENSIONER IN RECEIPT OF FAMILY ALLOWANCES IN ANOTHER MEMBER STATE - SPOUSE - CONCEPT ( REGULATION NO 574/72 OF THE COUNCIL , ART . 10 ( 1 ) AS AMENDED BY REGULATION NO 873/73 ) Summary 1 . THE NEED FOR A UNIFORM INTERPRETATION OF COMMUNITY REGULATIONS MAKES IT IMPOSSIBLE IN CASE OF DOUBT FOR THE WORDING OF A PROVISION TO BE CONSIDERED IN ISOLATION BUT REQUIRES ON THE CONTRARY THAT IT SHOULD BE INTERPRETED AND APPLIED IN THE LIGHT OF THE VERSIONS EXISTING IN THE OTHER OFFICIAL LANGUAGES . 2 . THE EXPRESSION ' ' DIENS ECHTGENOTE ' ' ( WHOSE WIFE ) IN ARTICLE 10 ( 1 ) ( B ) OF REGULATION NO 574/72 INCLUDES A MARRIED MAN WHO IS ENGAGED IN A PROFESSIONAL OR TRADE ACTIVITY IN A MEMBER STATE AND WHOSE WIFE IS ENTITLED UNDER THE PROVISIONS OF ARTICLE 77 ( 2 ) ( A ) OF REGULATION NO 1408/71 TO FAMILY ALLOWANCES UNDER THE LEGISLATION OF ANOTHER MEMBER STATE . Parties IN CASE 9/79 REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE RAAD VAN BEROEP ( SOCIAL SECURITY COURT ), ZWOLLE , FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN MARIANNE WORSDORFER , NEE KOSCHNISKE , NORDHORN ( FEDERAL REPUBLIC OF GERMANY ), AND RAAD VAN ARBEID ( LABOUR BOARD ), HENGELO ( NETHERLANDS ), Subject of the case ON THE INTERPRETATION OF ARTICLE 10 ( 1 ) ( B ) OF REGULATION ( EEC ) NO 574/72 OF THE COUNCIL OF 21 MARCH 1972 FIXING THE PROCEDURE FOR IMPLEMENTING REGULATION ( EEC ) NO 1408/71 ON THE APPLICATION OF SOCIAL SECURITY SCHEMES TO EMPLOYED PERSONS AND THEIR FAMILIES MOVING WITHIN THE COMMUNITY ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION , 1972 ( I ), P . 159 ), Grounds 1 IN A LETTER FROM ITS PRESIDENT , RECEIVED AT THE COURT ON 19 JANUARY 1979 , THE RAAD VAN BEROEP ( SOCIAL SECURITY COURT ), ZWOLLE , REFERRED TO THE COURT A QUESTION CONCERNING THE INTERPRETATION OF ARTICLE 10 ( 1 ) ( B ) OF REGULATION ( EEC ) NO 574/72 OF THE COUNCIL OF 21 MARCH 1972 ( OFFICIAL JOURNAL , L 74 , P . 1 ), FIXING THE PROCEDURE FOR IMPLEMENTING REGULATION ( EEC ) NO 1408/71 ON THE APPLICATION OF SOCIAL SECURITY SCHEMES TO EMPLOYED PERSONS AND THEIR FAMILIES MOVING WITHIN THE COMMUNITY , AS AMENDED BY COUNCIL REGULATIONS NO 878/73 ( OFFICIAL JOURNAL 1973 , L 86 , P . 1 ) AND NO 1209/76 ( OFFICIAL JOURNAL 1976 , L 138 , P . 1 ) 2 THIS QUESTION WAS RAISED IN THE COURSE OF AN ACTION BROUGHT BY A WOMAN OF GERMAN NATIONALITY ENTITLED TO A NETHERLANDS INVALIDITY PENSION , WHO BY VIRTUE THEREOF WAS RECEIVING A NETHERLANDS FAMILY ALLOWANCE IN PURSUANCE OF ARTICLE 77 ( 2 ) ( A ) OF REGULATION NO 1408/71 , AGAINST THE DECISION BY THE COMPETENT NETHERLANDS INSTITUTION TO SUSPEND PAYMENT OF THAT ALLOWANCE BY VIRTUE OF ARTICLE 10 ( 1 ) ( B ) OF REGULATION NO 574/72 . THE DECISION WAS BASED ON THE FACT THAT THE RECIPIENT ' S HUSBAND WAS EXERCISING A PROFESSION OR TRADE IN GERMANY AND WAS DRAWING DEPENDENT CHILD BENEFITS THERE . 3 THE PROVISION RELIED ON WITHHOLDS PAYMENT OF A FAMILY ALLOWANCE FROM ANYONE ENTITLED TO IT AS A RESULT OF AN INVALIDITY PENSION IF ' ' HIS SPOUSE ' ' , THAT IS TO SAY , HIS WIFE ( DIENS ECHTGENOTE ) ACCORDING TO THE DUTCH VERSION OF ARTICLE 10 , EXERCISES A PROFESSIONAL OR TRADE ACTIVITY IN THE TERRITORY OF A MEMBER STATE WHERE ENTITLEMENT TO FAMILY BENEFITS IS NOT SUBJECT TO CONDITIONS OF INSURANCE OR EMPLOYMENT . SINCE THE BENEFICIARY ' S HUSBAND WAS RECEIVING FAMILY BENEFITS IN GERMANY , THE QUESTION WHETHER ARTICLE 10 SHOULD BE APPLIED AROSE OWING TO THE USE OF THE WORD ' ' ECHTGENOTE ' ' ( WIFE ) IN THE DUTCH VERSION OF THAT ARTICLE . 4 BELIEVING THAT THIS WAS A QUESTION OF INTERPRETING COMMUNITY LAW , THE RAAD VAN BEROEP REFERRED THE FOLLOWING QUESTION TO THE COURT FOR A PRELIMINARY RULING : ' ' MUST ' DIENS ECHTGENOTE ' ( WHOSE WIFE ) IN ARTICLE 10 ( 1 ) ( B ) OF REGULATION NO 574/72 ALSO BE UNDERSTOOD TO MEAN A MARRIED MAN WHO IS ENGAGED IN A PROFESSIONAL OR TRADE ACTIVITY IN A MEMBER STATE AND WHOSE WIFE IS ENTITLED UNDER THE PROVISIONS OF ARTICLE 77 ( 2 ) ( A ) OF REGULATION NO 1408/71 TO FAMILY ALLOWANCES UNDER THE LEGISLATION OF ANOTHER MEMBER STATE? ' ' 5 IN FACT THE WORDING OF THE PROVISION IN QUESTION , CONSIDERED SOLELY IN THE DUTCH VERSION , IS CAPABLE OF GIVING THE IMPRESSION THAT THE TERM USED REFERS EXCLUSIVELY TO A PERSON OF THE FEMALE SEX . 6 HOWEVER , THE NEED FOR A UNIFORM INTERPRETATION OF COMMUNITY REGULATIONS MAKES IT IMPOSSIBLE FOR THAT PASSAGE TO BE CONSIDERED IN ISOLATION AND REQUIRES THAT IT SHOULD BE INTERPRETED AND APPLIED IN THE LIGHT OF THE VERSIONS EXISTING IN THE OTHER OFFICIAL LANGUAGES . 7 A COMPARISON WITH THE OTHER VERSIONS OF THE PROVISION IN QUESTION REVEALS THAT , IN ALL THE OTHER VERSIONS , A WORD HAS BEEN USED WHICH INCLUDES EQUALLY MALE AND FEMALE WORKERS ( ' ' AEGTEFAELLEN ' ' , ' ' EHEGATTE ' ' , ' ' SPOUSE ' ' , ' ' CONJOINT ' ' , ' ' CONIUGE ' ' ). 8 THIS INTERPRETATION IS BORNE OUT ON THE ONE HAND BY THE PURPOSE OF THE PROVISION , WHICH IS TO AVOID THE OVERLAPPING OF FAMILY ALLOWANCES FOR THE SAME CHILDREN AND ON THE OTHER HAND BY THE PRINCIPLE OF EQUAL TREATMENT FOR MALE AND FEMALE WORKERS IN THE FIELD OF SOCIAL SECURITY . 9 THE REPLY TO THE RAAD VAN BEROEP SHOULD THEREFORE BE THAT THE EXPRESSION ' ' DIENS ECHTGENOTE ' ' ( WHOSE WIFE ) IN ARTICLE 10 ( 1 ) ( B ) OF REGULATION NO 574/72 INCLUDES A MARRIED MAN WHO IS ENGAGED IN A PROFESSIONAL OR TRADE ACTIVITY IN A MEMBER STATE AND WHOSE WIFE IS ENTITLED UNDER THE PROVISIONS OF ARTICLE 77 ( 2 ) ( A ) OF REGULATION NO 1408/71 TO FAMILY ALLOWANCES UNDER THE LEGISLATION OF ANOTHER MEMBER STATE . Decision on costs COSTS 10 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES AND THE GOVERNMENT OF THE KINGDOM OF THE NETHERLANDS , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT . Operative part ON THOSE GROUNDS , THE COURT ( FIRST CHAMBER ), IN ANSWER TO THE QUESTION REFERRED TO IT BY THE RAAD VAN BEROEP , ZWOLLE , BY A LETTER FROM ITS PRESIDENT OF 16 JANUARY 1979 , HEREBY RULES : THE EXPRESSION ' ' DIENS ECHTGENOTE ' ' ( WHOSE WIFE ) IN ARTICLE 10 ( 1 ) ( B ) OF REGULATION NO 574/72 INCLUDES A MARRIED MAN WHO IS ENGAGED IN A PROFESSIONAL OR TRADE ACTIVITY IN A MEMBER STATE AND WHOSE WIFE IS ENTITLED UNDER THE PROVISIONS OF ARTICLE 77 ( 2 ) ( A ) OF REGULATION NO 1408/71 TO FAMILY ALLOWANCES UNDER THE LEGISLATION OF ANOTHER MEMBER STATE .

Case C-36/05 Commission of the European Communities v Kingdom of Spain (Failure of a Member State to fulfil obligations – Directive 92/100/EEC – Copyright – Rental and lending right – Failure to transpose within the prescribed period) Summary of the Judgment Approximation of laws – Copyright and related rights – Rental and lending right in respect of protected works – Directive 92/100 (Council Directive 92/100, Arts 1 and 5) A Member State which exempts almost all, if not all, categories of establishments undertaking the public lending of works protected by copyright from the obligation to pay remuneration to authors for the lending carried out fails to fulfil its obligations under Articles 1 and 5 of Directive 92/100 on rental right and lending right and on certain rights related to copyright in the field of intellectual property. The objective of the Directive is to guarantee that authors and performers receive appropriate income and recoup the especially high and risky investments required particularly for the production of phonograms and films. Concerning in that respect the scope of Article 5(3) of the directive, according to which Member States may exempt ‘certain categories of establishments’ from payment of the remuneration to authors in respect of public lending provided for in Article 5(1), exempting almost all, if not all, categories of establishments which engage in such lending from the obligation laid down in Article 5(1) would deprive authors of remuneration allowing them to recoup their investments, with inevitable repercussions for the creation of new works. Moreover, the expression ‘certain categories of establishments’ in Article 5(3) is to be understood as meaning that it refers to a concept which is quantitative in nature. Thus, only a limited number of categories of establishments potentially required to pay remuneration pursuant to Article 5(1) are capable of being exempt from that requirement. (see paras 24, 26-27, 32, 43, operative part) JUDGMENT OF THE COURT (Third Chamber) 26 October 2006 (*) (Failure of a Member State to fulfil obligations –Directive 92/100/EEC – Copyright – Rental and lending right – Failure to transpose within the prescribed period) In Case C-36/05, ACTION under Article 226 EC for failure to fulfil obligations, brought on 31 January 2005, Commission of the European Communities, represented by R. Vidal Puig and W. Wils, acting as Agents, with an address for service in Luxembourg, applicant, v Kingdom of Spain, represented by I. del Cuvillo Contreras, acting as Agent, with an address for service in Luxembourg, defendant, THE COURT (Third Chamber), composed of A. Rosas, President of the Chamber, A. Borg Barthet and J. Malenovský (Rapporteur), Judges, Advocate General: E. Sharpston, Registrar: R. Grass, having regard to the written procedure, after hearing the Opinion of the Advocate General at the sitting on 29 June 2006, gives the following Judgment 1 By its application, the Commission of the European Communities asks the Court for a declaration that, by exempting almost all, if not all, categories of establishments undertaking the public lending of works protected by copyright from the obligation to pay remuneration to authors for the lending carried out, the Kingdom of Spain has failed to fulfil its obligations under Articles 1 and 5 of Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (OJ 1992 L 346, p. 61) (‘the Directive’). Legal context Community legislation 2 The seventh recital in the preamble to the Directive is worded as follows: ‘Whereas the creative and artistic work of authors and performers necessitates an adequate income as a basis for further creative and artistic work, and the investments required particularly for the production of phonograms and films are especially high and risky; whereas the possibility for securing that income and recouping that investment can only effectively be guaranteed through adequate legal protection of the rightholders concerned’. 3 Article 1 of the Directive provides: ‘1. In accordance with the provisions of this Chapter, Member States shall provide, subject to Article 5, a right to authorise or prohibit the rental and lending of originals and copies of copyright works, and other subject-matter as set out in Article 2(1). 2. For the purposes of this Directive, “rental” means making available for use, for a limited period of time and for direct or indirect economic or commercial advantage. 3. For the purposes of this Directive, “lending” means making available for use, for a limited period of time and not for direct or indirect economic or commercial advantage, when it is made through establishments which are accessible to the public. 4. The rights referred to in paragraph 1 shall not be exhausted by any sale or other act of distribution of originals and copies of copyright works and other subject-matter as set out in Article 2(1).’ 4 Article 5(1) to (3) of the Directive provides: ‘1. Member States may derogate from the exclusive right provided for in Article 1 in respect of public lending, provided that at least authors obtain a remuneration for such lending. Member States shall be free to determine this remuneration taking account of their cultural promotion objectives. 2. When Member States do not apply the exclusive lending right provided for in Article 1 as regards phonograms, films and computer programs, they shall introduce, at least for authors, a remuneration. 3. Member States may exempt certain categories of establishments from the payment of the remuneration referred to in paragraphs 1 and 2.’ National legislation 5 TheThe Directive was transposed into Spanish law by Law 43/1994 of 30 December 1994 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (BOE No 313, 31 December 1994, p. 39504). That Law was amended by Royal Legislative Decree 1/1996 of 12 April 1996 approving the consolidated version of the Law on intellectual property (BOE No 97, 22 April 1996, p. 14369) (‘the Legislative Decree’). 6 As set out in Article 17 of the Legislative Decree: ‘The author has the exclusive rights of exploitation of his works regardless of their form and inter alia the exclusive rights of reproduction, distribution, public communication and conversion which cannot be exercised without his permission except in circumstances laid down in this Law.’ 7 Article 19 of the Legislative Decree is worded as follows: ‘1. “Distribution” means making the original works or copies thereof available to the public by sale, rental, lending or by any other means. … 3. “Rental” means making originals and copies of a work available for use for a limited period of time and for direct or indirect economic or commercial advantage. The concept of rental does not include the provision for the purposes of exhibition, public communication from phonograms or audiovisual recordings, including extracts, and provision for consultation “in situ”. 4. “Lending” means making originals and copies of a work available for use for a limited period of time and not for direct or indirect economic or commercial advantage, when it is made through establishments which are accessible to the public. It is understood that there is no direct or indirect economic or commercial advantage where the lending carried out by an establishment accessible to the public gives rise to the payment of a sum of money which does not exceed the amount necessary to cover its operating costs. The concept of lending does not include the transactions mentioned in the second subparagraph of paragraph 3 above or those which are carried out between establishments accessible to the public.’ 8 The exclusive lending right conferred on the author by Articles 17 and 19 of the Legislative Decree is subject to the following exception contained in Article 37(2) thereof: ‘… museums, archives, libraries, newspaper libraries, sound recording libraries and video recording libraries which are public or which belong to non-profit-making cultural, scientific or educational bodies of general interest or to teaching institutions which are part of the Spanish educational system, do not need the rightholders’ authorisation and do not [need to] pay remuneration for the lending which they effect.’ The pre-litigation procedure 9 On 24 April 2003, the Commission requested that the Kingdom of Spain provide it with information concerning the transposition of Articles 1, 2 and 5 of the Directive. The latter replied by letter of 1 July 2003. 10 In accordance with the procedure provided for in the first paragraph of Article 226 EC, the Commission sent the Kingdom of Spain a letter of formal notice on 19 December 2003 requesting that it adopt the measures necessary to comply with the Directive. Observations were submitted by that Member State on 19 March 2004. 11 As it considered that those explanations were unsatisfactory, the Commission sent a reasoned opinion to the Kingdom of Spain on 9 July 2004 asking it to adopt the measures necessary to comply with that opinion within a period of two months from the date of notification. 12 In reply to that reasoned opinion, the Kingdom of Spain, on 13 September 2004, sent to the Commission a report drawn up by the Ministry of Culture in which, firstly, the arguments submitted by the Spanish authorities in the letter of reply to the formal notice were repeated and, secondly, the ‘lack of available budget resources’ was put forward. 13 As it was not convinced by the arguments on which the Kingdom of Spain’s position is based, the Commission decided to bring the present action. The action Arguments of the parties 14 According to the Commission, it is apparent from Article 37(2) of the Legislative Decree that the requirement to pay remuneration to authors for the lending of their works for which the rightholder’s authorisation has not been obtained is so limited that there is reason to doubt that it can have any practical application whatsoever. The distinction which is made between the ‘establishment’ which carries out the lending and the ‘body’ which controls that establishment is in fact excessively formalistic. It makes the remuneration payable to authors contingent on the legal form chosen by the lender, which makes it possible to evade the requirement to pay remuneration very easily. 15 In fact, that obligation does not apply where the entities which allow the lending belong to public bodies, institutions which are part of the Spanish educational system or non-profit-making private ‘cultural, scientific or educational’ bodies ‘of general interest’. 16 Consequently, the obligation to pay remuneration applies only in two cases. The first is where the establishment allowing the lending is a private profit-making body. Lending carried out ‘with a view to profit’ is not considered to be ‘lending’ for the purposes of the Directive, but ‘rental’. It is furthermore very unlikely in practice that a profit-making body would allow free lending. The second case is where the establishment allowing the lending is a private body which is non-profit-making but which is not a ‘cultural, scientific or educational’ body ‘of general interest’. It is also difficult to conceive that museums, libraries, sound-recording libraries, video libraries or any other establishment which carries out public lending without a view to profit would not be regarded as ‘cultural, scientific or educational bodies of general interest’. 17 Thus, though it is true that in the present case the Legislative Decree allows a formal distinction to be made between the different categories of establishments, that distinction cannot be considered to be valid because it has the same effect as the absence of any distinction and results in all lending being exempt from the obligation to pay remuneration. 18 Furthermore, Article 5(3) of the Directive, as a derogation from the obligation to pay remuneration laid down in Article 5(1) thereof, is to be interpreted strictly. It follows that to accord no significance to the adjective ‘certain’ used in the expression ‘certain categories of establishments’ renders the obligation to pay remuneration redundant and gives Article 5(3) an interpretation which is contrary to the purpose of the Directive. Furthermore, although it is true that Article 5(3) leaves Member States a significant margin of discretion in defining the categories of establishments which are exempt from the obligation to pay remuneration, an ‘exemption’ applying to all or almost all establishments would become the general rule. 19 Moreover, the remuneration which authors receive ought to compensate their creative efforts. It follows that the absence of payment or a payment so reduced that it is clearly not adequate to compensate such creative efforts cannot therefore be regarded as ‘remuneration’ in the proper sense of the term. 20 In its defence, the Kingdom of Spain maintains first that it is not correct to describe as ‘extremely restricted’ the sphere of application of the obligation to pay remuneration to authors laid down in the Spanish legislation because the Commission incorrectly places ‘establishments’ and ‘bodies’ on the same footing. In fact, the absence of a profit-making aim is a condition which should apply not to the establishment itself but to the body controlling that establishment. Placing establishment and body on the same footing thus leads to confusion as it gives the impression that the profit-making aim and the general interest have to apply to the establishment and not to the body controlling it. In those circumstances, the sphere of application of that provision, described as extremely restricted by the Commission, is broader. Furthermore, private companies very frequently engage in patronage and sponsorship activities by publicly lending works free of charge and nothing precludes the bodies owning those establishments from paying remuneration to authors who request it. 21 Secondly, the Kingdom of Spain submits that none of the articles in the Directive provides information or criteria for interpretation as regards the relative scope of the general rule as to the remuneration of authors and the exemption from payment thereof. Thus, the Commission, on which the burden of proof rests, has not established that the scope of the exemption from payment of remuneration to authors for the lending of their works led to insufficient income to the detriment of those authors which was capable of preventing them from being able to produce new creations. Moreover, the Commission neither submitted evidence nor even alleged that that exemption has affected the completion of the internal market. 22 Contrary to the Commission’s claim which seeks to restrict, without a legal basis, the power conferred on Member States to exempt certain categories of establishments, if not all of them, the Directive gives the Member States a wide discretion which allows them to restrict, or indeed to remove, the obligation to pay remuneration in so far as necessary to attain the cultural objectives which they have set themselves, a priority requirement which overrides the requirement relating to ensuring that authors receive sufficient income. The Commission’s statement in its Report to the Council of the European Union, the European Parliament and the European Economic and Social Committee on the public lending right in the European Union of 12 September 2002 (COM(2002) 502 final) (‘the 2002 report on the public lending right’) bears out that interpretation. In that document the Commission states that ‘[u]nder certain conditions, [Article 5] allows Member States to replace the exclusive right by a remuneration right, or even not to provide for any remuneration at all’. 23 Lastly, the Kingdom of Spain submits that the expression ‘certain categories of establishments’ does not refer to the quantity, number or significance thereof, but means generally separate, differentiated or defined categories of establishments. It follows that the interpretation of Article 5(3) of the Directive advocated by the Commission does not correspond to the actual meaning of that expression. Findings of the Court 24 By means of this action for failure to fulfil obligations, the Commission raises, in essence, the question of the scope to be given to the provisions of Article 5(3) of the Directive, according to which Member States may exempt ‘certain categories of establishments’ from payment of the remuneration provided for in Article 5(1). 25 According to settled case-law, in interpreting a provision of Community law it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (see, inter alia, Case C-301/98 KVS International [2000] ECR I‑3583, paragraph 21, and Case C-156/98 Germany v Commission [2000] ECR I-6857, paragraph 50). 26 The main objective of the Directive, as can be seen more precisely from the seventh recital, is to guarantee that authors and performers receive appropriate income and recoup the especially high and risky investments required particularly for the production of phonograms and films (Case C-200/96 Metronome Musik [1998] ECR I-1953, paragraph 22, and Case C-53/05 Commission v Portugal [2006] ECR I-0000, paragraph 24). 27 Exempting almost all, if not all, categories of establishments which engage in such lending from the obligation laid down in Article 5(1) of the Directive would deprive authors of remuneration allowing them to recoup their investments, with inevitable repercussions for the creation of new works (see Metronome Musik, paragraph 24, and Commission v Portugal, paragraph 25). In those circumstances, a transposition of the Directive that results, in practice, in such an exemption for almost all, if not all, categories of establishments goes against the main objective of that directive. 28 However, in that regard the Kingdom of Spain maintains that the cultural promotion objective takes precedence over guaranteeing that authors receive appropriate income. The freedom conferred on Member States by the Directive thus enables them to allow authors only very limited, symbolic remuneration, or even none. Furthermore, the 2002 report on the public lending right bears out that interpretation. 29 It is true that cultural promotion is an objective in the general interest which allows the exemption, under Article 5(3) of the Directive, of certain public lending establishments from the obligation to pay remuneration. However, the protection of rightholders in order to ensure that they receive appropriate income is also a specific objective of the Directive, as the seventh recital in the preamble clearly states. It was precisely to preserve that remuneration right that the Community legislature sought to limit the scope of the exemption by requiring that national authorities exempt only certain categories of establishments from that obligation. 30 Furthermore, the interpretation of the directive on the basis of its main objective, as set out in paragraph 26 of this judgment, is borne out by the very wording of Article 5(3), a provision which refers only to ‘certain categories of establishments’. Therefore the Community legislature did not intend to allow Member States to exempt almost all, if not all, categories of establishments from payment of the remuneration referred to in Article 5(1) (Commission v Portugal, paragraph 21). 31 In addition, under Article 5(3), the Directive in fact allows Member States to derogate, in respect of public lending, from the general obligation of remuneration of authors referred to in paragraph 1 of that article. According to settled case-law, the provisions of a directive which derogate from a general principle established by that directive must be strictly interpreted (Case C-476/01 Kapper [2004] ECR I-5205, paragraph 72, and Commission v Portugal, paragraph 22). 32 It follows that, contrary to the submission of the Kingdom of Spain and as is apparent from paragraph 30 of this judgment, the expression ‘certain categories of establishments’ in Article 5(3) is to be understood as meaning that it refers to a concept which is quantitative in nature. Thus, only a limited number of categories of establishments potentially required to pay remuneration pursuant to Article 5(1) are capable of being exempt from that requirement. 33 Lastly, it is important to bear in mind that, in the absence of sufficiently precise Community criteria in a directive to delimit the obligations under the directive, it is for the Member States to determine, in their own territory, what are the most relevant criteria for ensuring, within the limits imposed by Community law and in particular by the directive concerned, compliance with that directive (see, to that effect, Case C-245/00 SENA [2003] ECR I-1251, paragraph 34, and Case C‑433/02 Commission v Belgium [2003] ECR I-12191, paragraph 19). 34 In that regard, it has already been held that Article 5(3) of the Directive authorises but does not oblige a Member State to exempt certain categories of establishments. Consequently, if the circumstances prevailing in the Member State in question do not enable the relevant criteria to be determined for drawing a valid distinction between categories of establishments, the obligation to pay the remuneration provided for in Article 5(1) must be imposed on all the establishments concerned (Commission v Belgium, paragraph 20). 35 The Kingdom of Spain relies on the argument that the exemption provided for in Article 37(2) of the Legislative Decree does not apply to the ‘establishment’ which carries out the lending, but to the ‘body’ which controls that establishment. 36 As the Commission correctly points out, to make the exemption from the obligation to pay remuneration contingent on the legal form chosen by the lender is a matter of excessive legal formality which is liable to allow the lender to evade easily the obligation to pay remuneration. Furthermore, the Kingdom of Spain does not provide any evidence establishing the relevance of the distinction thus made between the establishment and the body controlling it, as those two entities are in a substantially identical position in the light of the lending activity. 37 The Kingdom of Spain also submits that the Commission has not shown that the exemption provided for in Article 37(2) of the Legislative Decree deprives authors of an adequate income and distorts competition in the internal market. 38 That argument must however be rejected in the light of the settled case-law of the Court from which it is clear that an action for failure to fulfil obligations is objective in nature (see, inter alia, Case C-73/92 Commission v Spain [1993] ECR I-5997, paragraph 19), so that failure to comply with an obligation imposed by a rule of Community law is itself sufficient to constitute a breach, and the fact that such a failure had no adverse effects is irrelevant (see, inter alia, Case C-392/96 Commission v Ireland [1999] ECR I-5901, paragraphs 60 and 61, and Case C-233/00 Commission v France [2003] ECR I-6625, paragraph 62). By taking the view that it could interpret the Directive by reference to the consequences of its implementation, such as insufficient income for authors, the Kingdom of Spain is making the interpretation of the directive contingent on the effects of its application, which does not respect the logical order of those two stages of legal reasoning. 39 Furthermore, though it is true that, in the 2002 report on the public lending right, the Commission states that Article 5 of the Directive provides for no remuneration under certain circumstances, that possibility of providing for no remuneration relates only to categories of establishments which, under Article 5(3) of the Directive, are exempt from the obligation to pay remuneration. Thus, as is clear from paragraph 31 of this judgment, that provision must be strictly interpreted. 40 In any event, even if that report could be relied on in support of the Kingdom of Spain’s arguments, the report is at the very most, as Advocate General Sharpston correctly pointed out at point 31 of her Opinion, only one aid to interpretation among others and it cannot be binding on the Court. 41 It follows that the Kingdom of Spain, by including in the list of establishments which are exempt from the obligation to pay remuneration contained in Article 37(2) of the Legislative Decree, almost all, if not all, of the categories of establishments normally subject to the obligation to pay remuneration, is applying to Article 5(3) of the Directive an interpretation which is not consistent with the main objective of the Directive or with the strict interpretation which that provision calls for, in so far as it derogates from the general obligation of remuneration of authors. 42 In those circumstances, the action brought by the Commission must be regarded as well founded. 43 As a result, it must be held that by exempting almost all, if not all, categories of establishments undertaking the public lending of works protected by copyright from the obligation to pay remuneration to authors for the lending carried out, the Kingdom of Spain has failed to fulfil its obligations under Articles 1 and 5 of the directive. Costs 44 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Kingdom of Spain has been unsuccessful and the Commission has applied for costs, the Kingdom of Spain must be ordered to pay the costs. On those grounds, the Court (Third Chamber) hereby: 1. Declares that, by exempting almost all, if not all, categories of establishments undertaking the public lending of works protected by copyright from the obligation to pay remuneration to authors for the lending carried out, the Kingdom of Spain has failed to fulfil its obligations under Articles 1 and 5 of Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property; 2. Orders the Kingdom of Spain to pay the costs. [Signatures] * Language of the case: Spanish.

Dr. A.S. Anand, C.J.I. Heard learned Counsel for the parties. Leave granted. The short companytroversy in this appeal is with regard to the companydition of pre-deposit for hearing the appeal by the appellate authority. The order made by the appellate authority, to make a deposit of Rs. 30 lacs as against the total demand of Rs. 73,25,171/- within sixty days of receipt of that order as a pre-condition for hearing the appeal, was upheld by the learned Single Judge as also by the Division Bench of the High Court. We are number inclined to interfere with that direction, which appears to be quite reasonable. At this stage, learned Counsel for the appellant submits that though the Special Leave Petition was pending in this Court, the appellate authority dismissed the appeal bearing A.No.370/99 in default on 24th March, 1999 because the pre-deposit had number been made as directed. Mr. Harish N. Salve, learned Solicitor General appearing for the respondents, fairly submits that in case the pre-deposit of Rs. 30 lacs, as directed by the appellate authority and companyfirmed by the High Court, is made within six weeks from today, the respondents do number object to the appeal being restored by the appellate authority and decided on its own merits. We record the statement of the learned Solicitor General and direct that in the event the pre-deposit of Rs.

Lord Justice Laws : This is the judgment of the court, to which both members have contributed. INTRODUCTION On 19 November 2009 there were, in form, three matters listed before the court. There was first an application for judicial review brought by the Revenue and Customs Prosecutions Office (RCPO) to challenge a decision of District Judge Jellema, given at the Birmingham Magistrates Court on 4 September 2009, to adjourn confiscation enforcement proceedings brought by RCPO against Raymond Woolley (Mr Woolley). The purpose of the adjournment had been to enable either RCPO or Mr Woolley to seek a declaration in the High Court as to whether it would constitute an abuse of process for the magistrates court to proceed to determine the enforcement proceedings. On 5 October 2009 HHJ Bidder QC granted judicial review permission to RCPO. The second matter listed before the court on 19 November 2009 was an application by Mr Woolley for permission for judicial review of District Judge Jellema's further decision, given at the same hearing on 4 September 2009, that he would in principle entertain the confiscation enforcement proceedings brought by RCPO. This application was ordered to be joined with RCPO's judicial review and to proceed as a rolled up hearing. The third matter listed before us was an application by RCPO for an order that Mr Woolley be committed to prison for contempt of court. The contempt was said to consist in breaches of a restraint order made by Harrison J pursuant to s.77 of the Criminal Justice Act 1988 on 27 September 2001, and breach also of an enforcement receivership order made by Owen J on 3 April 2007. All of these proceedings had their genesis in Mr Woolley's conviction of serious criminal offences in December 2002, the making of a confiscation order against him in March 2005 with a four year term of imprisonment fixed in default of payment, his escape from jail and flight to Switzerland the previous month (February 2005) and his extradition from Switzerland to the United Kingdom on 10 March 2009. In the magistrates court on 19 November 2009 Mr Woolley sought to argue that proceedings launched by the RCPO to enforce the confiscation order by activation of the default sentence were an abuse of the process of the court and/or a violation of what is known as the specialty rule (which we shall shortly explain). The district judge declined so to hold, but equally declined to hold the contrary: he considered, founding on reasoning of Lord Griffiths in R v Horseferry Road Magistrates Court Ex parte Bennett [1994] 1 AC 42 at 64 B-D, to which we will return in due course, that the decision of such a question was a matter for the High Court and not for him. The judicial review claims respectively launched by the RCPO and Mr Woolley between them complained of both these positions taken by the district judge. The RCPO sought to assert that the judge should not have adjourned the case, but confronted the abuse argument and rejected it. Mr Woolley sought to assert that he should have accepted it. At the outset of the hearing on 19 November 2009 it was agreed that Mr Perry QC should first open his case for the RCPO, and, given that we would decide the substantive issue whether the enforcement proceedings were or were not an abuse of process or a breach of specialty (as we shall), it would be unnecessary to hear distinct argument on Mr Woolley's judicial review as a separate proceeding. In addition Mr Perry accepted that if we held in his client's favour that the enforcement proceedings were not tainted by abuse or breach of specialty, and so might properly go ahead, the public interest would not require the court to entertain the contempt proceedings (the third matter listed before us). THE LEGISLATION Before describing the facts it is convenient to give a short account of the legal arrangements in place for extradition between Switzerland and the United Kingdom. These are to be found in the European Convention on Extradition of 1957 (ECE) and, as a matter of British domestic law, the Extradition Act 2003 (the 2003 Act). The ECE provides for the obligation to extradite subject to the provisions and conditions which the ECE itself lays down. Thus Article 2 contains what is known as the double criminality rule. Article 2(1) provides: "Extradition shall be granted in respect of offences punishable under the laws of the requesting party and of the requested party by deprivation of liberty or under a detention order for a maximum period of at least one year or by a more severe penalty. When a conviction and prison sentence have occurred or a detention order has been made in the territory of the requesting party, the punishment awarded must have been for a period of at least four months." Article 14 contains the specialty rule. It provides in part as follows: "A person who has been extradited shall not be proceeded against, sentenced or detained with a view to the carrying out of a sentence or detention order for any offence committed prior to his surrender other than that for which he was extradited, nor shall he be for any other reason restricted in his personal freedom except in the following cases: (a) when the Party which surrendered him consents. A request for consent shall be submitted, accompanied by the documents mentioned in Article 12 and a legal record of any statement made by the extradited person in respect of the offence concerned. Consent shall be given when the offence for which it is requested is itself subject to extradition in accordance with the provisions of this Convention; (b) When that person, having had an opportunity to leave the territory of the Party to which he has been surrendered, has not done so within 45 days of his final discharge, or has returned to that territory after leaving it". The speciality rule is reflected in s.151 of the 2003 Act. S.151(2) provides that a person extradited to the United Kingdom from [States which include Switzerland]: "…may be dealt with in the United Kingdom for an offence committed before his extradition only if – (a) the offence is one falling within subsection (3), or (b) the condition in subsection (4) is satisfied. (3) The offences are – (a) the offence in respect of which the person is extradited; (b) an offence disclosed by the information provided to the category 2 territory in respect of that offence; (c) an offence in respect of which consent to the person being dealt with is given on behalf of the territory. (4) The condition is that – (a) the person has returned to the territory from which he was extradited, or (b) the person has been given an opportunity to leave the United Kingdom." S.151(5) provides: "A person is dealt with in the United Kingdom for an offence if – (a) he is tried there for it; (b) he is detained with a view to trial there for it." THE FACTS Now we may explain the facts. On 11 September 2001 Mr Woolley was arrested at Schipol Airport in Holland and extradited to England, where he was charged with conspiracy to cheat the public revenue. The conspiracy was of a kind known as a missing trader intra-Community VAT fraud, or "carousel" fraud. He was also charged with offences of money laundering. On 27 September 2001, Harrison J made a restraint order in the High Court under s.77 of the Criminal Justice Act 1988. On 19 December 2002, before HHJ McCreath at the Birmingham Crown Court, Mr Woolley was convicted by the jury of the conspiracy offence. The next day he pleaded guilty to two offences of money-laundering and on 20 December 2002 he was sentenced to nine years imprisonment for the conspiracy with no separate penalty imposed for the other offences. On 14 December 2003 the Court of Appeal Criminal Division dismissed his appeal against sentence. In June 2004 a management receiver was appointed over his assets. On 23 February 2005 he walked out of Sudbury open prison and fled the United Kingdom. 66 months and 18 days of his prison sentence remained outstanding. On 3 March 2005 a warrant for his arrest for the offence of escape from lawful custody was issued at the Birmingham Magistrates Court. On the same day, in Mr Woolley's absence, the Birmingham Crown Court made a confiscation order in the sum of £9,497,784-02 to be paid in full by 3 April 2006. A term of four years imprisonment (to be served consecutively to the nine year term) was fixed in default of payment. We should note that only £195,000 has been recovered by the Official Receiver. On 2 February 2007 Mr Woolley's renewed application for leave to appeal against the confiscation order was refused by a full court of the Court of Appeal Criminal Division, whereupon the confiscation order became final and fell to be enforced. On 3 April 2007 Owen J made an enforcement receivership order against Mr Woolley. On 6 February 2008 the United Kingdom issued a request to the government of Switzerland for Mr Woolley's extradition. It was put on two bases: (1) that Mr Woolley had been convicted of the conspiracy and money-laundering offences, (2) that he was accused of an offence of escape from lawful custody. On 12 June 2008 an arrest warrant was issued by the Examining Magistrate in Vaud Canton, and on 19 June 2008 Mr Woolley was arrested in Switzerland and detained. On 28 August 2008 the British Embassy at Berne sent a diplomatic note in reply to an enquiry from the Swiss Federal Office of Justice (FOJ). The note contained these statements: "It is important to make clear that there is no charge, in existence or proposed, for evasion or non-payment of the order. The extradition of Mr Woolley is not sought in respect of non-payment of the confiscation order which was made against him; it is sought in respect of one charge of escape from lawful custody and to finish serving the term of imprisonment passed on him in respect of the offence of conspiracy to cheat. The confiscation order was part of the sentence passed on Mr Woolley. The effect of the relevant legislation is that such orders are treated in the same way as fines. When a Crown Court imposes a fine on any person, they may allow that person time to pay the fine but they must make an order fixing a term of imprisonment which that person must serve as a last resort if the sum they owe has not been paid or recovered. The confiscation order in this case was made on 3 March 2005, the judge allowed Mr Woolley time to pay – until 3 April 2006, and set a term of imprisonment in default of 4 years. The order remains outstanding and this office has been taking steps to enforce it. Activation of a default sentence is one of the many means available to the court to enforce outstanding orders. The court can initiate activation of its own volition or the prosecutor can invite the court to do so. Before activating the default sentence, judges are under a duty to enquire into the defendant's proposals for payment and to determine whether any of the other methods of enforcement might be effective. Mr Woolley would have the opportunity to make representations throughout this process. Mr Woolley still has the option to pay the confiscation order at any time and if his assets are insufficient to meet the confiscation order he may apply to the High Court for a certificate of inadequacy. If one is granted, he may then apply to the Crown Court to reduce the amount of the confiscation order." By a written judgment of 26 September 2008 the FOJ ordered Mr Woolley's extradition in respect of the outstanding part of his nine year sentence only: escape from lawful custody was not punishable under Swiss law, and so that offence did not satisfy the double criminality rule. The judgment confirmed that extradition had not been requested for failure to pay the confiscation order. Mr Woolley appealed the extradition order to the Swiss Federal Criminal Tribunal. His appeal was dismissed. It is clear from paragraph 4 of the judgment that the tribunal, like the FOJ, proceeded on the basis that extradition was "not requested for non-payment of the amount in the confiscation order"; and it is also there asserted that in the event of extradition the FOJ would "indicate in the form of conditions or reservations for the attention of the requesting authority that the extradited person may not be sentenced to the term of 4 years imprisonment [sc. the default term for non-payment]". There was a further appeal to the Swiss Supreme Court which was dismissed on 26 February 2009. The Supreme Court also noted that extradition was not sought "for the sentence relating to the non-payment of the confiscation". And so Mr Woolley was extradited to the United Kingdom, as we have said on 10 March 2009. Since then he has been in custody serving the balance of his nine year sentence. His latest release date (not taking into account the four year default term) is in April 2010, but he has applied for early release having regard to time spent in custody in Switzerland. The Application was refused by the Secretary of State on 17 August 2009. On 11 March 2009, the day after his return, Mr Woolley was taken to the magistrates court in the course of the execution of the warrant for his arrest that had been issued. The RCPO were determined to enforce the confiscation order. An enforcement hearing was fixed for 7 April 2009. On 27 March 2009 RCPO wrote to Mr Woolley asking for payment proposals, and warning of the possibility of a warrant of commitment being issued which would expose him to the four year default term of imprisonment. The hearing on 7 April 2009 was adjourned, and adjourned again from 11 June 2009. On 29 July 2009 RCPO wrote to the Swiss authorities indicating their intention to proceed with enforcement proceedings. They stated: "As the sentence for non-payment was part and parcel of the sentence imposed for the extradition offence, it was not possible, or necessary, to seek his extradition in relation to it; as part of the sentence for the extradition offence it was covered by the terms of the extradition request. It appears from the documentation that we have had sight of that Mr Woolley was returned on the basis that the default sentence referred to above may not be imposed. This decision appears to be made on a misunderstanding of the requesting State's position as it is set out in the documents provided to the Federal Office of Justice in support of the extradition request." By a note dated 24 August 2009, the Swiss authorities stated: "[I]f the UK authorities intend to ask for the extension of the extradition to include the non-payment of the confiscation order they will have to proceed in accordance with Article 14 of the European Convention on Extradition." And so the matter went to the magistrates court on 4 September 2009 and District Judge Jellema made the decisions sought to be reviewed. The proceedings were adjourned to 23 November 2009 (when, we assume, they were further adjourned). THE ISSUES The following three main issues fall to be determined: (1) Whether the district judge erred in law in concluding that the Magistrates' Court had no jurisdiction to entertain the abuse of process argument and proceeding to adjourn the matter for a declaration to be made by the High Court ("the jurisdiction issue"); (2) Whether it would be a breach of the rule of specialty to proceed by way of a warrant of commitment for Mr Woolley to serve the default term of imprisonment for non payment of the confiscation order ("the rule of specialty issue"); and (3) Whether it would be an abuse of process to take and/or continue the proceedings to enforce the default term of imprisonment ("the abuse of process issue"). Issue 1: The Jurisdiction Issue. In the event, this particular issue was largely academic because Mr Perry made it clear from the outset that he was not seeking to have the matter remitted to the district judge, since this court was now in a position to deal with the two essential issues (i.e. the rule of specialty and the abuse of process issues) and remission would only result in unnecessary expense being incurred and further delay to the enforcement proceedings. Furthermore, on behalf of Mr Woolley, Mr Summers confirmed that it was accepted that the district judge did have jurisdiction to deal with the abuse application. Although we have not had the benefit of any argument to the contrary effect, we are satisfied that the district judge did have jurisdiction to hear the original application and we will briefly state our reasons for that conclusion. In reaching his decision that he did not have jurisdiction to hear the abuse of process application on the particular facts of this case, the district judge appears to have proceeded on the basis that the abuse allegation was to the effect that the RCPO had deliberately misled the Swiss authorities with regard to its intention to proceed with enforcement of the default term after Mr Woolley's return to the jurisdiction. The district judge then relied primarily upon the authority of R ~v~ Horseferry Road Magistrates' Court ex parte Bennett (1994) 1 AC 42 ("Bennett") and, in particular the speech of Lord Griffiths at page 64B, where he said this: "Nor do I see any force in an argument developed by the respondents which sought to equate abuse of process with contempt of court. I would accordingly affirm the power of the magistrates, whether sitting as committing justices or exercising their summary jurisdiction, to exercise control over their proceedings through an abuse of process jurisdiction. However, in the case of magistrates this power should be strictly confined to matters directly affecting the fairness of the trial of the particular accused with whom they are dealing, such as delay or unfair manipulation of court procedures. Although it may be convenient to label the wider supervisory jurisdiction with which we are concerned in this appeal under the head of abuse of process, it is in fact a horse of a very different colour from the narrower issues that arise when considering domestic criminal trial procedures. I adhere to the view I expressed in Reg. v Guildford Magistrates' Court, Ex parte Healy (1983) 1 WLR 108 that this wider responsibility for upholding the rule of law must be that of the High Court and that if a serious question arises as to the deliberate abuse of extradition procedures a magistrate should allow an adjournment so that an application can be made to the Divisional Court which I regard as the proper forum in which such a decision should be taken." In our view, the allegations of abuse of process were not in the category envisaged by Lord Griffiths as requiring determination by the High Court. As Mr Perry pointed out, this is not a case where it is being suggested that there has been "a deliberate abuse" of the extradition proceedings. Contrary to the way in which the district judge characterised the abuse allegation, there is no suggestion in any of the written skeleton arguments prepared on behalf of Mr Woolley or in any of Mr Summers' oral submissions to this court that the Swiss authorities were either deliberately misled or that the extradition proceedings were improperly manipulated (by deceiving the Swiss as to the RCPO's true intention upon Mr Woolley's return) so as to ensure that Mr Woolley was returned to the United Kingdom. As Mr Perry observed, the most serious allegation appears to be that the response given in the 28th August 2008 diplomatic note (see paragraph 9 above) was ambiguous and unintentionally misled the Swiss, who treated it as a promise not to proceed in respect of the default term and hence the United Kingdom/RCPO should be bound by it. In those circumstances, we accept Mr Perry's submission (which Mr Summers did not seek to contradict) that the abuse of process allegation falls clearly within the first category of abuse of process identified by Lord Griffiths in Bennett, namely "such as delay or unfair manipulation of court procedures." We are satisfied that this categorisation is sufficiently wide to cover the abuse of process arguments advanced on behalf of Mr Woolley in this case and that the district judge erred in concluding otherwise. In our judgment, these briefly expressed reasons are sufficient to dispose of the first issue which, as we have already made clear, is essentially academic in the particular circumstances of this case. Issue 2: the Rule of Specialty Issue. As Mr Perry observed, the rule of specialty means that generally speaking, when a person has been extradited, he will only be prosecuted or punished for the offence or offences in respect of which he was surrendered and that he will not be pursued in respect of any other alleged offence committed prior to his extradition. Mr Perry's position with regard to this particular issue was very simple and straightforward. It was his submission that, as the United Kingdom's original request of 6th February 2008 made abundantly clear, Mr Woolley's extradition was sought in respect of (inter alia) his convictions for the offences of conspiracy to cheat the public revenue and money laundering and that it was in respect of those particular convictions/offences that he was extradited in due course. Mr Perry submitted that the default term for non-payment of the confiscation order unarguably forms part of the sentence imposed on Mr Woolley for the convictions/offences for which he was extradited. It was therefore his submission that, in proceeding to impose the default term for non-payment of the confiscation order, the Magistrates' Court would only be dealing with Mr Woolley for the particular convictions/offences for which he was extradited and that there was thus no infringement of the rule of specialty, nor was there any abuse of process involved in taking any such proceedings. As we explain below, we agree with that submission. For his part, Mr Summers accepted that the confiscation order did form part of the sentence imposed on Mr Woolley for the material offences. However, his primary submission was to the effect that enforcement of the default term did not actually form part of the original sentence and, thus, not part of either of the relevant offences. He submitted that the essential characteristics of the enforcement proceedings, in which the failure to pay the confiscation order has to be strictly proved before the default term can be imposed, demonstrate that enforcement of the default term is in respect of another and separate offence (i.e. presumably, failure to pay the confiscation order) from the offence in respect of which the confiscation order had been imposed. Other than to argue that the setting of the default term as part of the original sentence is meaningless until there is a breach (i.e. by commission of the separate offence of failing to pay the order within the time prescribed), Mr Summers was quite unable to refer us to any authority or statutory provision that supported his novel submissions on this point. This is not surprising since, in our view, it is plainly wrong. We are entirely satisfied that the default term (which the court is obliged to impose as a matter of law in such circumstances as part of the process of sentencing) forms part of the original sentence, since it is an integral part of the confiscation order which, it is common ground, is unarguably part of the original sentence. To argue that enforcement of the default term involves proving the commission of a further separate offence of (for example) failing to pay within the prescribed time is, in our view, wholly artificial in the absence of any statutory provision (or other authority) to that effect. We therefore have no hesitation in rejecting it. In the alternative, Mr Summers submitted that if (contrary to his primary submission) the default term does form part of the original sentence and that proceeding to enforce it is a process in which Mr Woolley will be dealt with for the original offences, then there must be a mechanism for dealing with the express reservation of the Swiss authorities (i.e. that extradition was not sought for non-payment of the confiscation order: "the Swiss reservation"). In support of that submission, Mr Summers argued first that section 151 should be construed so as to give effect to the Swiss reservation (although he was quite unable to specify how this court could arrive at such a construction of the section). Next he suggested that effect should be given to the reservation of the Swiss authorities in accordance with the normal principles of comity between nations. Again, he was unable to develop this particular argument by reference to any authority or by any means other than to express a general exhortation to that effect. Again, we are satisfied that there is no substance in the submission that there must be a mechanism for giving effect to the Swiss reservation. As we will make clear, that reservation was the result of their misunderstanding of the extent of the United Kingdom's clearly expressed request. We are satisfied that there is nothing in either of the points urged upon us by Mr Summers in support of this particular submission. There is nothing in the words of the section that would justify or support such an imprecisely expressed construction and we are not aware of any principle arising from the concept of the comity of nations that supports Mr Summers' arguments. Finally, Mr Summers submitted that, in view of all the circumstances, it would be an abuse of process to allow the enforcement proceedings to go ahead when it is clear that the Swiss authorities would never have agreed to the extradition of Mr Woolley if they had properly understood the true position, namely that, if necessary, proceedings would be taken against Mr Woolley for enforcement of the default term. This submission is, of course, the subject of Issue 3. However, it is convenient at this stage to indicate that, for the reasons we give later, we have come to the firm conclusion that there is also no substance in this particular submission. For his part, Mr Perry emphasised that, in its original extradition request of 6th February 2008, the United Kingdom had made it perfectly clear that Mr Woolley's extradition was being sought for (inter alia) the imposition of the default term for non-payment of the confiscation order, if that became necessary, because the default term formed part of the sentence imposed in respect of the offences for which Mr Woolley had been convicted. Mr Perry pointed out that the statement of Francesca Giradot had formed part of the extradition bundle and that paragraph 8 of that statement was in the following clearly expressed terms: "Arising from the aforementioned trial, and in addition to the above sentence of imprisonment, on 3 March 2005 at Birmingham Crown Court a confiscation order was made against Raymond Woolley in the sum of £9,497,784.02. The Judge ruled that this sum must be paid in full by 3 April 2006 and set a 4 year term of imprisonment in default of payment. As at 17 August 2007, the sum of £195,000 has been paid towards the confiscation order by the Receiver appointed in the matter. I produce an extract from the relevant enactment dealing with the making and enforcement of confiscation orders as my ExhibitFCG/5. It is established law that a default sentence so imposed constitutes part of the overall penalty. Raymond Woolley's return to the United Kingdom is therefore sought in respect of any activation of the default sentence which may become necessary." There then followed a diplomatic note from the Swiss authorities in which they enquired whether the extradition was being requested for (inter alia) "…charges of …non-payment of the confiscation sum ordered by Birmingham Crown Court on 3 March 2005". In a diplomatic note dated 28th August 2008, the United Kingdom replied to the Swiss enquiry in the terms quoted in paragraph 9 above. Mr Perry accepted that the first paragraph of this particular note was not happily worded, but submitted (correctly, in our view) that, when read as a whole, the note made it perfectly clear that extradition was not required in respect of any charge of non-payment of the confiscation order, since there was no such actual or proposed charge because the order in question formed part of the sentence imposed for the offences of which Mr Woolley had been convicted and in respect of which his extradition was being sought. In other words, it was not necessary to seek extradition specifically for the non-payment because the confiscation order was merely part of the sentence for the offences for which he was to be extradited and was not a separate charge in its own right. Mr Perry accepted that it is clear from subsequent events (see paragraphs 10 to 13 above) that the Swiss authorities simply misunderstood the position, despite the clear terms of the United Kingdom's original request and its subsequent response to the Swiss authorities' enquiry. He submitted that, on a correct understanding of the position taken throughout by the United Kingdom, there was and is no breach of the rule of specialty. It was therefore Mr Perry's contention that the imposition of the default term would offend neither the rule of specialty in section 151 of the 2003 Act nor under Article 14 of the ECE. We agree and we reject Mr Summers' submissions to the contrary effect. Mr Perry then went on to submit that the rule of specialty is thus no bar to the imposition of the default term for the non-payment of the confiscation order in this case and that Mr Woolley has been returned to the United Kingdom for those convictions/offences for which he is now to be dealt with in the proposed enforcement proceedings. Again, we agree and again we reject Mr Summers' opposing submissions. Issue 3: the Abuse of Process Issue. In the light of our decision that there is no infringement of the rule of specialty in this case, we have come to the firm conclusion that there is no abuse of process involved in proceeding to enforce the default term against Mr Woolley in the circumstances of this case, notwithstanding the misunderstanding of the position by the Swiss authorities and their expressed reservation. In our view, Mr Summers' submission that to proceed to enforcement of the default term would be an abuse of process in the particular circumstances of this case (see paragraph 28 above) is untenable in light of the decision of the Court of Appeal (Criminal Division) in R ~v~ Davidson (1977) 64 Cr. App. R 209 ("Davidson"). That case concerned an extradition from what was then the state of West Germany. The German Court ordered extradition in relation to certain offences and not others and entered a caveat or restriction as to which offences could be prosecuted. In giving the judgment of the Court, Lord Widgery C.J. said this (at page 212): "… when an English Court has to decide whether the accused appearing before it following upon extradition can or cannot be prosecuted in view of the manner in which the extradition was conducted, the Court is not concerned with the treaty between this country and the country from which the fugitive is to come and is even less concerned with any decision of the exporting Court ordering the return of the fugitive under the extradition law. If a British subject is in England charged with an offence alleged to have been committed in England, then the normal principle that he can be charged … is to be applied without regard to external documents but subject only to section 19 [the then applicable domestic law on specialty]." In our view, and as Mr Perry observed, the effect of the decision in Davidson in Mr Woolley's case is clear. For the reasons already given, there is no infringement of the rule of specialty in this case. Accordingly, it is still possible to proceed against Mr Woolley because this is permitted by section 151 of the 2003 Act, notwithstanding the observations and reservations expressed by the Swiss courts. The decisions and comments of the Swiss courts in respect of the default term for non-payment of the confiscation order are simply not binding on the courts of the United Kingdom and the rule of specialty has not been infringed. For the reasons already given, we are satisfied that the United Kingdom did not deliberately mislead the Swiss authorities, that it always made its intentions clear and that there has been no improper or unfair manipulation of the processes of extradition or for the enforcement of the default term. Accordingly, in the premises we are satisfied that there is no abuse of process involved in proceeding to enforce the default term against Mr Woolley and we reject Mr Summers' submissions to the contrary effect. Conclusion. For all the foregoing reasons, the RCPO's application for appropriate relief by way of judicial review succeeds. That of Mr Woolley fails and must be dismissed. We will hear the further submissions of Counsel with regard to the terms of the Order and, in particular, with respect to the terms of such declaratory relief as we consider appropriate in the light of this judgment.

MR JUSTICE MOSES: This is a challenge to the decision of HHJ McGregor-Johnson at Isleworth on 24th May 2004. The decision that the judge made was that this claimant should be admitted to hospital pursuant to section 5 of the Criminal Procedure (Insanity) Act 1964 ("the 1964 Act") and treated as if a restriction order had been made pursuant to paragraph 2(1)(b) of Schedule 1 of the Criminal Procedure (Insanity and Unfitness to Plead) Act 1991. The claimant was granted permission by the single judge to move for judicial review. The issue in this application is whether there was evidence on the basis of which the judge was entitled to conclude that the claimant presented a risk of serious harm to the public. So far as the facts are concerned, they present a sorry picture for which the claimant is entitled to sympathy. He is now 27. He suffers from paranoid schizophrenia. The claimant faced criminal proceedings at the Isleworth Crown Court in respect of one allegation of burglary and one of attempted burglary which was said to have occurred on 27th October 2003. He was arrested at the scene. On 17th May 2004 he was found by a jury to be unfit to stand his trial. It is of note that this, in a long history of offending, was the first time that he was so found. On 20th May 2004 a separate jury found that he had committed the acts alleged on 22nd October 2003. On 24th May he appeared before the judge to consider disposal. Dr Omar, a psychiatrist into whose care the claimant had been placed, gave evidence, both at the earlier trial as to whether he was fit to plead, and also at the disposal hearing. The issue, therefore, before the judge on 24th May 2004 was the appropriate disposal for him pursuant to Schedule 1 of the Criminal Procedure (Insanity and Unfitness to Plead) Act. The direction he made was that reflected in section 41 of the Mental Health Act 1983. The statutory scheme with which the judge was concerned is to be found firstly in the substituted section 5 of the 1964 Act. This provides that the court may make an order that the accused be admitted, in accordance with the provisions of Schedule 1 of the Criminal Procedure (Insanity and Unfitness to Plead) Act 1991, to such hospital as may be specified by the Secretary of State (see section 5(2)). Schedule 1 of the 1991 Act provides under paragraph 1 that an admission order to a hospital is sufficient authority for his detention in that hospital; and further provides, under paragraph 2(1): "A person who is admitted to a hospital in pursuance of an admission order made otherwise than under section 14A of the 1968 Act shall be treated for the purposes of the 1983 Act -- (a) as if he had been so admitted in pursuance of a hospital order within the meaning of that Act made on the date of the admission order; and (b) if the court so directs, as if an order restricting his discharge had been made under section 41 of that Act, either without limitation of time or during such period as may be specified in the direction." That schedule, in other words, refers the court back to the provisions of section 41 of the Mental Health Act 1983, which provides: "Where a hospital order is made in respect of an offender by the Crown Court, and it appears to the court, having regard to the nature of the offence, the antecedents of the offender and the risk of his committing further offences if set at large, that it is necessary for the protection of the public from serious harm so to do, the court may, subject to the provisions of this section, further order that the offender shall be subject to the special restrictions set out in this section, either without limit of time or during such period as may be specified in the order, and an order under this section shall be known as 'a restriction order'." The principles to be applied in considering restriction orders have been identified by the Court of Appeal Criminal Division in the case of Birch [1990] 90 Cr.App.R 78 between pages 79 and 81. The court pointed out that the test of serious harm is not limited to personal injury, but emphasised that the harm must be serious. In those circumstances a high possibility of a recurrence of minor offences will not be sufficient. The court referred to the case of a recidivist burglar who might be described as an antisocial pest who had not since the 1991 Act been regarded as posing a risk of serious harm. The judge in the instant case was referred to those principles and referred to Birch in his ruling. In his ruling the judge noted the test correctly at page 7 of the transcript and went on to outline a substantial record of convictions for residential burglary and two convictions for assault occasioning actual bodily harm. He referred to the medical reports, and particularly the hallucinations from which this claimant suffered, which included hearing commands to hurt people. He then continued by referring to Birch and the proposition that harm is not limited to physical injury, and continued: "It seems to me here that the risks, should the defendant be at large and not taking medication, are two-fold: one is of violence but the other is of returning to burglaries to finance a drug habit. "I am satisfied that the combination of those two matters does indicate that if the defendant offends there is a risk of serious harm to the public, taken in that wide and, in my view, proper sense. Therefore, I am satisfied that it would be right to make such a direction." He then made the direction to which I have already referred. The issue, therefore, was whether it was necessary to protect the public from serious harm by making the equivalent of a restriction order. There was no dispute before the judge, and there has been no dispute in this court, that this claimant, by reason of his paranoid schizophrenia, presented a risk to the public; nor was there any dispute that a hospital order was appropriate. The question was whether there was evidence upon which the judge was entitled to take the view that it was necessary to protect the public from serious harm by making a restriction order. The material before the judge consisted in part of a list of the convictions of this claimant. That list discloses frequent commission of burglaries dating back to a young age; but more recently offences of possession of drugs, back in 1998, escalating to an offence of violence -- namely, assault occasioning actual bodily harm -- at Golgledd Ceredigion Magistrates' Court on 26th April 2000. There were then further offences of burglary and drugs, but what is specifically significant is the deterioration in this claimant's behaviour in 2002. On 9th January 2002 at Carmarthen South Magistrates' Court he was conditionally discharged for threatening behaviour. It is then noted that in April he was first admitted to St David's Hospital for three weeks and found to be in a psychotic state. He admitted that he had been taking commands, as it is put, and drinking heavily. The diagnosis of paranoid psychosis was made, coupled with multiple substance misuse. There were, in May 2002, further convictions for assault occasioning bodily harm at Carmarthen South Magistrates' Court. The facts were available to the judge and they disclose unprovoked aggression, consisting in part of punching a totally innocent driver as he sat in his motorcar. The admissions to hospital then increased. In November, but a few months after that conviction, he was admitted again, suffering from auditory hallucinations. There were further admissions in July and August 2003, and in September 2003 he was admitted by police to the hospital and made there several attempts to assault the staff. The burglaries in respect of which he was found unfit to plead led to further admission to hospital and there, it is recorded, there were unprovoked attacks on nursing staff. The nursing reports laid before the judge also spoke of a number of incidents where the claimant had been physically aggressive towards staff, other patients and property. The medical reports of the doctors which led to the hospital order included a psychiatric report from Dr Omar, to whom I have already referred. He referred to paranoid psychosis characterised by paranoid delusions and auditory hallucinations from which the claimant suffered. It is of note that the claimant spoke of people telling him to harm people. The conclusion was that the claimant suffered from paranoid schizophrenia and there was a recommendation that he should be in hospital. A similar view was taken in the report from the other doctor, the consultant in forensic psychiatry, Dr Lomax, which again agreed with Dr Omar and reported that he did not think that the claimant had reached the threshold requiring a restriction order. Nor did Dr Omar in the oral evidence that he presented to the judge. He was asked specifically by the claimant's counsel, who also appears before us, as to the issue of serious harm. He was asked about the violence in the past; namely, whether there had been any more explosive attack than throwing a few punches. The doctor said there had not and that he did not expect, if there was an attack, that there would be more than a few punches thrown. The doctor did not think that the claimant was likely to use a weapon or to try to strangle anybody. It was on the basis of that evidence that it was submitted to the judge that there was no risk of serious harm, and it is on the basis of that evidence that the submission is repeated, in the context of judicial review, that that evidence did not entitle the judge to reach the conclusion that there was a risk of serious harm. I disagree. It must be always recalled in the context of cases such as this that it is necessary for the judge to look to the future. Of course the evidence as to what had happened in the past provides a guide to the future; but it does not determine the nature of the risk, particularly in the context of an escalation of violence by one who suffers from paranoid schizophrenia and hears commands to harm other people. The judge was bound to consider the risk in the future and the nature of that risk, having regard to the past, but he was not bound to determine that risk solely by reference to the nature of the violence in the past. True it is that Dr Omar, looking to the future, expressed a view, but it is trite to observe that the judge was not bound by the view of that doctor. It was necessary to consider the escalating violence coupled with the abuse of drugs, revealed not only in the history of the previous convictions, but in descriptions of this claimant's behaviour when detained in hospital. In my judgment not only was the judge entitled to take the view that he did that there was a risk of serious harm, but that that was an almost inevitable view, having regard to the evidence laid before him. True it is that in the judge's ruling it appears that he was considering harm in a sense wider than that occasioned by physical violence. But reading the judgment as a whole, and looking at it in the context of the evidence laid before him and of the reports, it seems to me plain that the basis of the decision was that there was a risk of serious physical violence to the public, were there not to be put in place a restriction order. In those circumstances I take the view that the judge's decision to impose the restriction order was amply warranted by the material laid before him and there is no basis for saying that he was not entitled to reach that view. I would dismiss this application. LORD JUSTICE MAURICE KAY: I entirely agree. The order will therefore dismiss the application for judicial review. MR REID: My Lord, forgive my ignorance in this court. I am instructed to ask for legal aid taxation. LORD JUSTICE MAURICE KAY: It has a different name. Do you have a certificate? MR REID: Yes. LORD JUSTICE MAURICE KAY: Certainly you may have it.

Judgments - Total Network SL (a company incorporated in Spain) (Original Respondents and Cross-appellants) v Her Majesty's Revenue and Customs (suing as Commissioners of Customs and Excise) (Original Appellants and Cross-respondents) HOUSE OF LORDS SESSION 2007-08 [2008] UKHL 19 on appeal from: [2007] EWCA Civ 39 OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Total Network SL (a company incorporated in Spain) (Original Respondents and Cross-appellants) v Her Majesty's Revenue and Customs (suing as Commissioners of Customs and Excise) (Original Appellants and Cross-respondents) Appellate Committee Lord Hope of Craighead Lord Scott of Foscote Lord Walker of Gestingthorpe Lord Mance Lord Neuberger of Abbotsbury Counsel Appellants: John Martin QC Philip Coppel (Instructed by Solicitor Her Majesty's Revenue and Customs) Respondents: Charles Flint QC Tom Weisselberg (Instructed by Byrne and Partners) Hearing date: 26 & 27 NOVEMBER 2007 ON WEDNESDAY 12 MARCH 2008 HOUSE OF LORDS OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Total Network SL (a company incorporated in Spain) (Original Respondents and Cross-appellants) v Her Majesty's Revenue and Customs (suing as Commissioners of Customs and Excise) (Original Appellants and Cross-respondents) [2008] UKHL 19 LORD HOPE OF CRAIGHEAD My Lords, The issue in this case is whether the Commissioners can maintain a civil claim for damages under the tort of unlawful means conspiracy against a participant in a missing trader intra-community, or carousel, fraud. Two questions need to be considered. The first is whether it is open to the Commissioners to maintain a cause of action in damages at common law as a means of recovering VAT from a person who has not been made accountable or otherwise liable for that tax by Parliament. The second is whether, if so, it is an essential requirement of the tort of unlawful means conspiracy that the conduct which is said to amount to the unlawful means should give rise to a separate action in tort against at least one of the conspirators. On the second issue the Court of Appeal considered itself bound by prior Court of Appeal authority to hold that the unlawful means had to be independently actionable: [2007] EWCA Civ 39, paras 78-79. Its decision to strike out the Commissioner's claim for this reason is the subject of the appeal to this House by the Commissioners. The Court of Appeal decided the first issue in favour of the Commissioners: paras 31-32. Total Network SA ("Total") has cross-appealed on the first issue. The facts Total is a company incorporated in Spain which has a bank account in the United Kingdom. The Commissioners claim that Total is liable to them in damages at common law for conspiracy in sums equivalent to amounts of VAT which the Commissioners say they have lost as a result of thirteen carousel frauds which were participated in by Total. There are alleged to have been thirteen such conspiracies over five months from May to October 2002. In its simplest form a carousel fraud begins with the sale of taxable goods by a trader registered for VAT in one member state, A, to a VAT-registered trader in another member state, B. Under article 28c(A)(a) of European Council Directive 77/388/EEC of 17 May 1977 (OJ L 145, 13 June 1977) on the harmonisation of the laws of the member states relating to turnover taxes (the Sixth Directive), the supply of goods to a trader in another member state is exempted from VAT. In the words of section 30 of the Value Added Tax Act 1994 ("VATA 1994"), it is zero-rated. B then sells the goods to another VAT-registered trader, C, in its own member state, charging and receiving VAT on the consideration. It fails to account for that VAT to the taxing authorities and disappears. It becomes a missing trader. But before doing so it provides a tax invoice to C, which claims and receives the VAT that it has paid to B as input tax. C, the middleman or broker, then sells the goods to a registered trader in another member state. In the simplest form, this is A. This sale is zero-rated, so there is no output tax to set off against the input tax which C has received. B's disappearance has resulted in a profit to the conspirators which is equivalent to the amount of the input tax received by C. It is the circularity of the transaction that gives rise to the description of the fraud as a carousel. The fraud is the product of a dishonest application of the system of value added tax. C has a claim for input tax arising from its transaction with the missing trader, B, which it is entitled to recover under article 17(2)(d) of the Sixth Directive. Its sale to A is zero-rated in its own member state. So it is not required to account to the taxing authorities for any output tax on that sale. The result of the fraud is that the missing trader, B, has received the VAT from C. But it has not accounted for that VAT as output tax to the taxing authorities. They must nevertheless pay the VAT, or give credit for it, to C when it is claimed as input tax. The goods are no more than a token to give the transaction the semblance of reality. A has no genuine business motive in buying back what it has sold. Typically the goods are high volume articles such as computer chips or mobile telephones. As the Court of Appeal observed in para 3 of its judgment, this type of fraud is not confined to the United Kingdom. It is common in other countries within the EU. It has been described as a sophisticated attack on the VAT system. It was estimated to have cost in excess of £1bn in the year 2004/2005 to the United Kingdom by way of lost revenue. The Commissioners refer in their written case to estimates that show that this figure was exceeded substantially in the succeeding financial years. There is no doubt that this is a pernicious stratagem, and that member states are justified in making use of every means at their disposal within the scope of the Sixth Directive to eradicate it. It is sufficient for the purposes of this case to summarise the details of the first of the thirteen conspiracies alleged in the Statement of Claim. It has been treated as representative of all of them. On or about 15 October 2002 Total sold 3,780 Nokia mobile phones to Redlaw Ltd, a company incorporated in England and Wales, for £1,672,224.75. On the same day Redlaw sold the mobile phones to Lockparts Ltd for £1,423,170 plus £249,054.75 as VAT, amounting in total to £1,672,224.75. On the same day Lockparts sold them to GAK Ltd, for £1,428,840 plus £250,047 as VAT, amounting in total to £1,678,887. Both Redlaw and Lockparts thereafter ceased to trade and did not pay the VAT due on these transactions. On the same day GAK sold the mobile telephones to The Accessory People plc, for £1,436,400 plus £251,370 as VAT, amounting in total to £1,687,770. On the same day The Accessory People sold them to Alldech Ltd, the broker, for £1,447,740 plus £253,345.50 as VAT, amounting in total to £1,701,094.50. In due course GAK and The Accessory People paid VAT on the transactions which they had entered into. Finally, on the same day Alldech sold the mobile telephones to Total for £1,508,220. That sale, being a sale out of the United Kingdom, was zero-rated. Alldech claimed and was paid a refund of input tax from the Commissioners which included the sum of £253,345.50 of VAT which it had paid to The Accessory People. Reduced to its essentials, the position is that Redlaw, the first missing trader, was liable to pay VAT of £249,054.75 on its taxable supply which it failed to pay to the Commissioners. The intermediaries in the chain, other than Lockparts, did properly account for and pay VAT on the supplies. Alldech, the broker, did actually pay VAT of £253,345.50 on the supply it received from The Accessory People. Alldech then claimed and received a VAT credit for £253,345 in respect of the zero-rated supply out of the United Kingdom to Total. If Redlaw, the first missing trader, had paid the VAT due from it of £249,054.75 the result would have been that substantially all the VAT due on these transactions would have been paid or accounted for. The difference between the amounts paid and due at each end of the chain is accounted for by the fact that VAT of £992.25 due by Lockparts, the second missing trader, was not paid to the Commissioners. The total number of mobile phones involved in the thirteen conspiracies was 30,704. They were sold by Total to the various missing traders for a total of £12,299,117.40 and re-purchased by Total from the various brokers for a total of £11,663,423. The total amount of VAT due but unpaid on the sales by the missing traders is £1,921,331.12. The total amount of the VAT refund claimed by the brokers and allowed by the Commissioners is £1,958,714.95. That is the sum claimed in this action. The cause of action relied on by the Commissioners is the tort known as unlawful means conspiracy. The unlawful means on which they rely in their re-re-amended Particulars of Claim are (a) the commission by Redlaw and/or Alldech of the common law offence of cheating the revenue and (b) the making by Alldech of a fraudulent misrepresentation that the transactions had a genuine economic purpose and that VAT was chargeable and/or recoverable on them by the submission to the Commissioners of a VAT return in the relevant form claiming that it was entitled to a VAT credit. The claim relating to four of the alleged conspiracies was issued on 2 July 2003. On the same day Fulford J granted a freezing injunction against Total, the amount of which was increased on several subsequent occasions as other alleged conspiracies were added to the claim. On 10 January 2005 Hodge J held that the Commissioners had a cause of action in conspiracy where the unlawful means alleged was the common law offence of cheating the public revenue. On 31 January 2007 the Court of Appeal allowed Total's appeal against that order. The Commissioners were granted permission to appeal to this House and Total were granted permission to cross-appeal. The freezing injunction was continued pending the determination of the appeal and the cross-appeal. The statutory scheme Value added tax is a creature of statute. More precisely, it is the product of a series of EC Directives, of which the Sixth Directive was the most recent. (The Sixth Directive was repealed and replaced by Council Directive 2006/112/EC of 28 November 2006. But it was still in force at the time when the transactions that gave rise to this case were entered into). They provided for the harmonisation of this form of sales tax throughout all the member states of the EU: see Part I of the Finance Act 1972, which brought the then Directives into force in the UK following its accession to the EEC. It is a Community tax. There is no common law to which reference can be made. So it is important, to set the issues into their proper context, to identify the provisions of the statute that apply to the transactions that were involved in the alleged fraud. They are to be found in the Value Added Tax Act 1994, as amended. It is important also to identify the extent of the remedial steps that are available under the Act to the Commissioners. There are, as Mr Flint QC for Total explained, three aspects of the statutory scheme that need to be considered. These are (a) the application of VATA 1994 to transactions of the type complained of in this action; (b) whether VATA 1994 creates an exclusive regime for the enforcement of liabilities arising out of the failure to account for or pay VAT; and (c) the nature of the duties and rights of the Commissioners. Section 1(1) VATA 1994 provides that VAT shall be charged, in accordance with the provisions of the Act, on the supply of goods or services in the United Kingdom and on the acquisition in the United Kingdom from another member State of any goods. Section 1(2) provides that VAT on the supply of goods or services is a liability of the person making the supply and that, subject to provisions about accounting and payment, it becomes due at the time of the supply. That section must be read with sections 4(1) and 10(1) which make it clear that VAT is charged on the events referred to in section 1 only when the person who makes the supply or acquisition is a taxable person. Section 3(1) provides that a person is a taxable person while he is, or is required to be, registered under the Act. Total is not, and does not require to be, registered as it is a Spanish company carrying on business outside the United Kingdom. On the other hand Redlaw, the first missing trader, was registered under the Act, as was the broker, Alldech. Section 7 VATA 1994 deals with the place of supply. It applies for determining whether, for the purposes of the Act, goods or services are supplied in the United Kingdom. Section 13 deals with the place of acquisition. It applies for determining whether, for the purposes of the Act, goods acquired from another member State are acquired in the United Kingdom. Section 25(1) provides that a taxable person shall account for and pay VAT in respect of supplies made by him and in respect of the acquisition by him of goods from another member State. This is to be done by reference to prescribed accounting periods. Section 25(2) provides that he is entitled at the end of each accounting period to credit for so much of his input tax as is allowable under section 26 and then to deduct that amount from any output tax that is due from him. So Redlaw was liable under section 25(1) VATA 1994 to pay the output tax due on the supplies of the mobile telephones that it made in the United Kingdom, and Alldech was entitled under the same subsection to recover the VAT that it paid on their supply to it as input tax allowable under section 26. Part IV VATA 1994, which is headed "Administration, Collection and Enforcement", is introduced by section 58, which provides that Schedule 11 shall have effect with respect to the administration, collection and enforcement of VAT. Para 1(1) of Schedule 11, as originally enacted, provided that VAT was to be under the care and management of the Commissioners. Para 5(1) provides that VAT due from any person shall be recoverable as a debt due to the Crown. These provisions must now be read together with the Commissioners for Revenue and Customs Act 2005, which provides for the appointment of the Commissioners to exercise the functions previously vested in the Commissioners of Customs and Excise and for the transfer to them of the ancillary powers that were conferred on the former Commissioners by the Customs and Excise Management Act 1979. Various provisions are included within Part IV to enable the Commissioners to collect and to enforce the payment of VAT. Section 60 enables a civil penalty to be recovered in cases of dishonest evasion of VAT or the making of false input tax or repayment claims. Section 61 extends liability to a civil penalty to the director or managing officer where the person liable under section 60 is a body corporate. Section 72 makes it an offence for a person to be knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of VAT by him or by any other person. This provision supplements other common law offences with which the offender may be charged, including conspiracy to cheat the revenue. All persons knowingly concerned in the fraudulent evasion who are subject to the criminal jurisdiction of the relevant part of the United Kingdom are within its reach. Section 73 enables the Commissioners to assess the amount of VAT due where there has been a failure for whatever reason to make any returns required by the Act. The making of assessments under this provision is subject to the time limits set out in section 73(6). They may not be made after the later of two years after the end of the prescribed accounting period or one year after the evidence of the facts came to the knowledge of the Commissioners. Section 76 enables the Commissioners to assess amounts due by way of penalty, interest or surcharge. Section 77 prescribes a long-stop time limit, normally six years in the section as originally enacted and now three as substituted by section 47(10) of the Finance Act 1997, on the making of assessments, including assessments for penalties, interest or surcharge, under section 76. Two further provisions, added to VATA 1994 by amendment to address the problem of intra-community fraud, are also relevant to an understanding of the scheme of VATA 1994. First, section 77A was added by section 18(1) and (4) of the Finance Act 2003 with effect from 10 April 2003. It enables the Commissioners, where a taxable supply of goods to which the section applies has been made to a taxable person, and at the time of supply that person knew or had reasonable grounds to suspect that some or all of the VAT payable in respect of that supply would go unpaid, to serve a notice on the taxable person making him jointly and severally liable with the person who is liable to the Commissioners for that amount. Section 77A(1) provides that the section applies to telephones and equipment made or adapted for use in connection with telephones, computers and equipment made or adapted for use in connection with computers and various other equipment of a similar nature which it specifies. Secondly, section 55A was added by section 19(1) of the Finance Act 2006, together with section 26AB which provides for the adjustment of accounts to give effect to it. It introduced a system known as reverse charge accounting which had been permitted by a derogation from article 21(1)(a) of the Sixth Directive that had been requested by the UK government under article 27(1) to combat missing trader intra-community fraud. Its core is to be found in section 55A(3) by which the purchaser rather than the seller is liable to account for and pay the VAT on the supply. It applies to goods of a description specified in an order made by the Treasury. In June 2007 reverse charge accounting was implemented in respect of mobile phones and computer chips. Neither of these additional measures to combat fraud has the effect of enabling the Commissioners to obtain a statutory remedy against persons in another member state whom it believes to have been involved in intra-community fraud who are not registered for VAT in the UK. No provision for this is made in the Sixth Directive. There is no statutory remedy against Total. Redlaw and Alldech on the other hand are within the reach of the statute. Redlaw's failure to pay was a breach of section 25(1) VATA 1994. Alldech can be assessed under section 73(2) for an amount as being VAT due from it to the Commissioners which is equivalent to the amount of the VAT that it recovered as input tax, on the ground that the Commissioners would have been entitled to withhold payment of the VAT if the purpose of the transaction had been disclosed to them. Mention should also be made of the provision which VATA 1994 makes for appeals. Section 82(1) provides that a reference to a tribunal is a reference to a tribunal constituted in accordance with Schedule 12. Section 83 provides that an appeal shall lie to a tribunal with respect to the various matters listed in that section which, as amended, include the amount of any input tax that may be credited to any person, any liability to a penalty or a surcharge under sections 59 to 69, any assessment made under section 73 and any liability arising by virtue of section 77A. Overall the impression that is conveyed by VATA 1994 as amended is of a comprehensive scheme for the administration, collection and enforcement of VAT by the Commissioners under the powers that are given to them by the statute. This is consistent with the propositions which I set out in para 11: VAT is a creature of statute, the limits of which are set by the Sixth Directive which requires member states to comply strictly with the harmonised rules that it lays down. It is designed to apply throughout the EU. So there is no common law to which reference can be made to fill any gaps in the scheme as to the persons from whom the Commissioners may collect amounts due to it as VAT. This is the background to the first issue, which is whether the Commissioners can maintain a cause of action in damages at common law as a means of recovering VAT that ought not to have been paid or credited from a person who has not been made accountable or otherwise liable for that tax by Parliament. The first issue: the exclusive regime issue Total submits that it is a fundamental constitutional principle that no money shall be levied for or to the use of the Crown except by grant of Parliament, and that this in substance is what the Commissioners are seeking to do in this case without Parliamentary authority. Although their claim is presented as one for the award of damages, what they are really seeking to do is to recover by indirect means sums due as tax. Their action was ultra vires of the statute, from which alone they derive their powers. It was also contrary to article 4 of the Bill of Rights 1688, which declares: "That levying money for or to the use of the Crown, by pretence of prerogative, without Grant of Parliament for longer time, or in other manner than the same is or shall be granted, is illegal." The Commissioners had no power under VATA 1994 to raise an assessment on Total for the tax that had been not been paid on the transactions. Nor was there any power under the Act to commence civil proceedings by action to recover unpaid tax from Total as a debt, as Total was not a taxable person. The absence of any such power was to be contrasted with the powers to recover unpaid tax that were now available to the Commissioners in terms of sections 55A and 77A of the Act, as amended. The Court of Appeal did not, of course, question the fundamental constitutional principle. Ample support for it is to be found in the authorities. In Gosling v Veley (1850) 12 QB 328, 407, Wilde CJ said: "The rule of law that no pecuniary burden can be imposed upon the subjects of this country, by whatever name it may be called, whether tax, due, rate or toll, except upon clear and distinct legal authority, established by those who seek to impose the burden, has been so often the subject of legal decision that it may be deemed a legal axiom, and requires no authority to be cited in support of it." In Attorney-General v Wilts United Dairies Ltd (1921) 37 TLR 884 the Food Controller under the Defence of the Realm Acts sought to impose a charge as a condition of the grant of a licence to purchase milk in certain areas for which no authority had been given by Parliament. It was held that he had no power to do so. Atkin LJ referred at p 886 to the Bill of Rights and to what he described as the elaborate custom of Parliament by which money for the service of the Crown is only granted at the request of the Crown made by a responsible Minister and assented to by the House of Commons. He went on to draw this conclusion: "In these circumstances, if an officer of the executive seeks to justify a charge upon the subject made for the use of the Crown (which includes all the purposes of the public revenue), he must show, in clear terms, that Parliament has authorised the particular charge." In the House of Lords, where the decision was affirmed, Lord Buckmaster said that the imposition could only be properly described as a tax, which could not be levied except by direct statutory means: (1922) 38 TLR 781. Having recognised the principle, the Court of Appeal said in para 31 of its judgment that the crucial issue was to determine the nature of the claim in conspiracy: "Assuming for the purpose of this argument that a claim in conspiracy does lie, then this is a claim for damages for a perfectly proper, well-recognised tort, the tort of conspiring together to defraud the claimant. That the measure of damages suffered by such a claimant may be measured by reference to the amount by which the Exchequer's income is depleted does not in our view alter the essential character of the claim as one for damages, not as a levy of money for the use of the Crown without grant of Parliament." Having distinguished the nature of the claim in the Wilts United Dairies case, the court summed up its conclusion with these words: "Properly characterised this claim by the Commissioners is not a direct claim for VAT. It is a claim brought on a wholly different basis. It is a claim against conspirators to recover loss occasioned by fraud. It would make a mockery of the law to suggest that a fraudster can escape with impunity by piously claiming the benefit of the Bill of Rights designed for the innocent down-trodden citizen, not the scheming international fraudster." The Court of Appeal took a different view, at a later stage in its judgment, of the possibility that the Commissioners might have an independent actionable claim of damages at common law against Alldech: paras 83-85. The Commissioners had a statutory method for clawing back tax wrongly paid or credited to a trader under sections 73(2) and 77 VATA 1994. So the common law claim would be met by the defence that the only remedy was one provided by the statute. In that respect the statutory provisions could be said to provide a comprehensive regime for collecting tax which had been wrongly paid or credited. The Commissioners have issued an assessment under section 73(2) against Alldech to recover the amount of VAT with which they were wrongly credited. At first sight the argument that Total is entitled to invoke the Bill of Rights to avoid liability for its part in the alleged conspiracy seems to fly in the face of common sense. But, as Mr Flint pointed out, the protection of the Bill of Rights is available to everyone. Fraudsters and cheats are as much entitled to be protected against the levying of taxes without the authority of Parliament as anyone else. At the heart of his argument however there lie more fundamental questions about the nature of the Commissioners' claim and their interest, if any, to seek to recover tax wrongly paid or credited as damages against a person upon whom no liability to pay that amount can be imposed under the statute. The claim that is made in this case is presented as a claim for damages. As presented it is, as the Court of Appeal said, a claim for the loss caused by a perfectly proper, well recognised tort. I agree with my noble and learned friend Lord Neuberger of Abbotsbury (para 172) that such a claim is simply not within the territory of article 4 of the Bill of Rights. But I do not think that the claim in this case is truly of that character. The function of an action of damages is to provide a remedy for interests that are recognised by the law as entitled to protection. Obvious examples are protection against injury to the person, to reputation and to privacy. Economic interests are entitled to protection too, such as a person's business or his property. As Hazel Carty, An Analysis of the Economic Torts (2001), p 3, puts it, the economic torts are to be seen as protecting against the infliction of economic harm. Tony Weir, A Casebook on Tort (10th ed, 2004), p 17, makes the same point. Compensation, he says, is the principal function of tort law. The very concept of compensation entails the notion or harm or damage, since only harm or damage can be compensated. It is not difficult to think of situations where the Commissioners could properly bring a claim of damages for loss sustained with regard to some interest that falls within the law's protection, such as damage to their buildings or their equipment. In Inland Revenue Commissioners v Hambrook [1956] 2 QB 641 the Revenue's claim for loss resulting from its being deprived of the services of a taxing officer due to a vehicle accident was dismissed. But this was because an action for that kind of loss did not lie where its relationship was with an established civil servant. In this case it is said that an action lies for loss sustained as a result of an unlawful means conspiracy. But can the amount sued for be said to be a loss sustained by the Commissioners for which they can sue in damages? The Commissioners' duties and responsibilities are set out comprehensively in the statute. Para 1(1) of Schedule 11 VATA 1994, as originally enacted, stated that VAT was to be under the care and management of the Commissioners. Section 1(1) VATA 1994 states that references in the Act to VAT are references to value added tax charged in accordance with the provisions of the Act. Para 5(1) of Schedule 11 states that VAT due from any person shall be recoverable as a debt due to the Crown. The Commissioners are not authorised by the statute to carry on a business for profit. They have no commercial interests that need to be protected by the tort of conspiracy: see Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173, 189B-C per Lord Diplock. Their only function is to gather in and account to the Crown for VAT charged in accordance with the provisions of the Act. My noble and learned friend Lord Walker of Gestingthorpe, very properly, draws attention to the fact that the point that the Commissioners have no commercial interests needing to be protected by the tort of conspiracy was not raised by Mr Flint in his written and oral submissions (para 40). But in my respectful opinion it follows inevitably from his analysis of the statute. The sum that is claimed as damages in this action is the amount of the VAT that the Commissioners say was wrongly paid to Alldech in response to its claim for a refund or credit of input tax. It is the same amount as is recoverable as a debt due to the Crown from Alldech by means of an assessment made under section 73(2). It is not recoverable from Total under VATA 1994 because the statute makes no provision for the recovery of VAT from someone who is not a taxable person within the meaning of section 3. There is, it may be said, a gap in the statute. But this does not mean that the Commissioners have suffered a loss for which they can sue in damages. All that can be said is that payment was made to Alldech which ought not to have been made. It is an amount that can be recovered as a debt due to the Crown from Alldech. It does not change its character as a debt due to the Crown because, when it is sought to be recovered from someone else, it is described as damages. It is an inescapable fact that the sums claimed as damages will become VAT for the purposes of the statute if and when they are paid to the Commissioners because they have no power under the statute to deal with those sums in any other way. But the Commissioners have no power to recover such a debt from strangers to the Act such as Total. In form the claim is one for damages, outside the scope of article 4 of the Bill of Rights. But in substance it is a claim for the recovery of VAT from a person who is under no liability to pay that tax under the statute. No provision for this is made in the Sixth Directive. Total do not need to invoke the protection of article 4. The issue is resolved by the terms of the statute. The statutory code precludes the claim. As the Court of Appeal noted when it was considering, and then rejecting, the possibility of an independent actionable claim in damages at common law against Alldech, the statutory provisions can properly be said to provide a comprehensive regime for collecting VAT which has been wrongly paid or credited to a taxable person. Various aspects of that regime sit uneasily with the idea that there is an independent common law remedy. For example, time limits are built into the provisions for the making of assessments under section 73(2) VATA 1994 that are different from those that apply to a common law remedy: see section 77. And exclusive jurisdiction for the determination of all appeals arising from the Commissioners' exercise of their powers under the Act is given by section 82 to a tribunal constituted under Schedule 12. As Lord Nicholls of Birkenhead said in Autologic plc v Inland Revenue Commissioners [2006] 1 AC 118, para 13, the taxpayer must use the remedies provided by the tax legislation. It would seem odd for the court to have the exclusive jurisdiction to determine disputes about the amount of VAT claimed as damages from a non-taxable person such as Total, when a tribunal has exclusive jurisdiction to determine disputes as to exactly the same amount of VAT at the instance of a taxpayer who, under the tort on which the Commissioners rely, is jointly and several liable. These additional points reinforce the fundamental point that the regime for the administration and collection of VAT which is set out in VATA 1994 is indeed comprehensive and does not admit the use by the Commissioners of means for collecting VAT which are not provided for by the statute. The steps which Parliament has taken to address the problem of carousel fraud by conferring additional statutory powers on the Commissioners, authorised where necessary by a derogation from the Sixth Directive, are entirely consistent with this view. The taking of these powers would not have been necessary if common law remedies were available. The fact that Parliament has followed this route is, of course, due to its long tradition of insisting that power to raise money for the public revenue may be exercised only with statutory authority. In my opinion the Commissioners' attempt to resort to the common law for this purpose, which is without precedent, is contrary to principle. I do not think, with the greatest of respect, that it is an answer to say, as Lord Walker does, that the Commissioners regularly seek and obtain remedies against defaulting taxpayers which are not conferred on them expressly by statute or that the courts must be astute to deal with progressive techniques of tax avoidance when they are construing the taxing statutes. These points do not meet the fundamental objection that the purpose of this action is to recover VAT from a person who is not, for any of the purposes of VATA 1994, a taxpayer. Nor is it met by the example of cash representing collected taxes which was stolen from a vehicle belonging to the Commissioners while in transit. I agree that the Commissioners would have a civil remedy to reclaim the money if it could be traced to the robbers' bank account. But it would be recovered as a debt due by them to the Commissioners, not from a third party as damages. If the claim is properly to be seen as one for damages, the amount due would need to be assessed, as my noble and learned friend Lord Scott of Foscote points out. But the fact that techniques are available for the assessment of damages does not answer the question whether the Commissioners are in a position to make such a claim. For these reasons I consider that the Court of Appeal was wrong to hold that this ground of appeal was wholly devoid of merit. I would hold, in agreement with Lord Neuberger, that the Commissioners' claim is precluded by the statute and ought to have been struck out on this ground. The second issue: unlawful means conspiracy The Court of Appeal said in para 67 of its judgment that it could see no reason, on the assumed facts of this case, why the Commissioners ought not to be able to rely on the tort of conspiracy by unlawful means. If it had been open to it to do so, it would have held that the allegation of conspiracy to cheat the Commissioners, provided there was an intention, albeit not a predominant intention, to injure them, was sufficient. But it felt itself prevented from doing so by the decision of the Court of Appeal in Powell v Boladz [1998] Lloyd's Rep Med 116 in which Stuart-Smith LJ said, in a judgment with which the two other members of the court agreed, that the unlawful act relied upon must be actionable at the suit of the plaintiff and that it was not sufficient that it amounted to a crime or a breach of contract with a third party. The authorities relied upon by Stuart-Smith LJ in support of that proposition were Clerk & Lindsell on Torts, 17th ed, para 23-80, Marrinan v Vibart [1963] 1 QB 234 and 528, Hargreaves v Bretherton [1959] 1 QB 45 and Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173 per Lord Diplock at p 186 and following. The discussion of the topic in Clerk & Lindsell, as can be seen from the 19th ed (2006), pp 1615-1620, is wide-ranging and does not come down firmly on either one side or the other. Mr Flint accepted in the Court of Appeal and in your Lordships' House that neither Marrinan v Vibart nor Hargreaves v Bretherton supports the proposition for which they were cited. So the question is whether support for it is to be found in Lord Diplock's speech in Lonrho v Shell and, if it can be found there, how what Lord Diplock said in that case stands up to examination in the light of the speech of Lord Bridge of Harwich in Lonrho plc v Fayed [1992] 1 AC 448. The background to Lord Diplock's speech in Lonrho v Shell is to be found in the way the issue was dealt with in the Court of Appeal: The Times, 7 March 1981, [1981] Com LR 74. The judge, Parker J, had held that there was no claim in conspiracy because the acts, if done, were not done with intent to harm the plaintiff and were not in themselves actionable. Lord Denning MR made it clear at the outset of his discussion that the important point was that the agreement, if any, to which Shell was a party was not made with any intent to injure the pipeline companies. The point of law was whether the agreement to do an unlawful act was actionable by anyone who suffers damage even though there was no intention to injure him. He pointed out that the problem only arises where the unlawful act is one which does not itself give rise to a cause of action but it is sought to make it actionable by reason of an agreement by two or more to do it. His answer to it was that the tort was a conspiracy to injure. That intention may not be the predominant motive. It might be mixed with others. But it was sufficient if the conspiracy was aimed or directed at the plaintiff, it could reasonably be foreseen that it might injure him and it did in fact do so. Eveleigh LJ's judgment was to the same effect. Fox LJ said: "I agree with the judge, that where persons combine to do an unlawful act with the intention of injuring another person there is every reason why that person should have a cause of action if he suffers damage. The position is otherwise if, there being no cause of action in respect of the act if done by an individual, there was no intent by the combiners to injure the complainant. To give such a cause of action gives undue weight to the mere fact of the combination. An intention to injure is, it seems to me, a necessary element in the tort." In the House of Lords counsel for the appellants made it clear in his speech that his cause of action based on conspiracy assumed that no breach of contract, no private rights arising out of breach of the sanctions orders and no allegations of intent to injure. All that was alleged was actual knowledge that the acts done could cause damage to Lonrho: [1982] AC 173, 180C-D. Having held that there was no independent cause of action against any of the alleged conspirators, Lord Diplock proceeded at p 188C nevertheless to consider the conspiracy claim. In the discussion which followed he said that the civil tort of conspiracy to injure the plaintiff's commercial interests, where that was the predominant purpose of the agreement and of the acts done in execution of it, was too well established to be discarded: p 189 B-C. Turning to actions for damages for conspiracy where the damage-causing acts, although neither done for the purpose of injuring the plaintiff nor actionable at his suit if they had been done by one person only, he said that the House had an unfettered choice whether to confine the civil action of conspiracy to a narrow field or to extend it beyond the narrow limits which were all that common sense and the application of the legal logic of the decided cases required: p 189F. He concluded these remarks with this passage at p 189G: "My Lords, my choice is unhesitatingly the same as that of Parker J and all three members of the Court of Appeal. I am against extending the scope of the civil tort of conspiracy beyond acts done in execution of an agreement entered into by two or more persons for the purpose not of protecting their own interests but of injuring the interests of the plaintiff." I agree with the Court of Appeal, para 57, that the real point decided in that case was that to establish the tort the plaintiff had to prove that the defendant's purpose in the conspiracy was to injure the plaintiff. It is difficult to find in what Lord Diplock said a clear and unequivocal statement that where there is such an intention, and the plaintiff suffers the intended damage, the unlawful acts that were used by the conspirators to bring this about must themselves be actionable. When account is taken of the absence of any indication of disapproval of the judgments in the Court of Appeal, which were to the contrary, the argument that Lord Diplock intended to confine the unlawful means conspiracy to cases where the unlawful acts were themselves actionable becomes even more tenuous. But the previous cases to which he had referred were concerned with lawful means conspiracy, where there is no liability unless the predominant motive of the conspirators was to injure the plaintiff. This gave rise to doubt in subsequent cases as to whether a predominant motive to injure the plaintiff was also an essential element in unlawful means conspiracy. In Lonrho plc v Fayed [1992] 1 AC 448, Lord Bridge of Harwich quoted Lord Diplock's speech in Lonrho v Shell without disapproval. At p 463F he said that the tort of conspiracy where no unlawful means were used is regarded as an anomaly, for the reasons that had been explained by Lord Diplock. But at p 464D-E he observed that there were many cases where dicta had indicated that the predominant purpose requirement did not apply where the means used to effect the conspirators' purpose were unlawful. At pp 465G-466A he said: "Where conspirators act with the predominant purpose of injuring the plaintiff and in fact inflict damage on him, but do nothing which would have been actionable if done by an individual acting alone, it is in the fact of their concerted action for that illegitimate purpose that the law, however anomalous it may now seem, finds a sufficient ground to condemn their action as illegal and tortious. But when conspirators intentionally injure the plaintiff and use unlawful means to do so, it is no defence for them to show that their primary purpose was to further or protect their own interests; it is sufficient to make their action tortious that the means used were unlawful." No mention is made in this passage of a requirement that the unlawful means must be independently actionable. A clear indication in these speeches that the unlawful means need not be independently actionable is not easily found. Statements to that effect can be seen in the judgments of the Court of Appeal in Lonrho v Shell, and the assumptions to which counsel for the appellants referred in his speech in the House of Lords are a further pointer to the conclusion that ought to be drawn. The Court of Appeal concluded in this case that an allegation of conspiracy to cheat was sufficient, provided there was an intention to injure the claimant, albeit not a predominant intention: para 67. I respectfully agree. But I think that it has to be acknowledged that textual analysis of this kind is an incomplete answer to the problem. The question then is whether the general principles on which the tort is based support the proposition that the unlawful means must be independently actionable. When Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 was in the Court of Session Lord Justice Clerk Aitchison said (1940 SC 141, 155-156): "When the end of a combination is not a crime or a tort in the accepted sense, and the means are not in the accepted sense criminal or tortious - cases which give rise to no difficulty - the question always is - What is the real purpose of the combination? If it is to injure, without reference to anyone's lawful gain, or the enjoyment of one's rights, or the furtherance of one's legitimate interests, then what is done may become a wrongful act and be actionable. If, on the other hand, the real purpose of the combination is to further the lawful interests of the parties to it- these not necessarily being identical interests - no wrong is committed even when the means, employed not being in themselves illegal, are calculated, and even intended, to injure the persons against whom they are directed." He did not understand there to be any real dispute about the law, which was to be found in the cases from Allen v Flood [1898] AC 1 to Sorrell v Smith [1925] AC 700. The question was whether a purpose to injure was the real root of the acts that grew from it: Sorrell v Smith, per Lord Dunedin at p 717. If that was its purpose, he saw no reason to distinguish between means that were criminal and means that were tortious. As Lord Wright put it in the House of Lords, it is in the fact of the conspiracy that the unlawfulness resides: [1942] AC 435, p 462. That is the essence of the lawful means conspiracy. It is for the claimant to show that to harm his economic interests was the predominant purpose of the conspiracy. The situation that was contemplated in that case was one where the combination had more than one purpose, which Viscount Simon LC described at p 445 as "the quagmire of mixed motives". In a case of that kind the issue has to be resolved by ascertaining the predominant intention. If the predominant intention of the combination is to injure, what is done is actionable even though the means used were lawful. Harm caused by a conspiracy where the means used were unlawful would seem no less in need of a remedy. The means that are alleged in this case are the commission by Redlaw and/or Alldech of the common law offence of cheating the revenue and the making by Alldech of a fraudulent misrepresentation: see para 10. The second alternative can be ignored for the purposes of the argument. The conduct alleged was tortious, but on the evidence it may be the weaker alternative. So the Commissioners wish to have their argument tested on the first alternative. Their primary contention is that where the conspirators agree to engage in conduct against the claimant which amounts to a criminal offence, and the carrying out of that conduct results in loss or damage to the claimant, the conduct will supply the unlawful means for the purposes of an unlawful act conspiracy although it is not itself actionable. They do not offer to prove that harm to their economic interests was the predominant purpose of the conspiracy. But the case does not appear to be one of mixed motives where predominant purpose is a necessary ingredient. Their case is more straightforward. It is that the criminal offence was directed at the Commissioners for the purpose of persuading them to give Alldech a VAT credit to which it was not entitled. The unlawful means chosen by the conspirators were intended to secure that result which could not have been secured by either of them acting alone. In OBG Ltd v Allan [2007] 2 WLR 920, para 56 Lord Hoffmann said that the courts should be cautious in extending the tort of causing loss by unlawful means beyond the description given by Lord Watson in Allen v Flood [1898] AC 1, 96 and Lord Lindley in Quinn v Leathem [1901] AC 495, 535, which was designed only to enforce standards of civilised behaviour in economic competition between traders or between employers and labour. I entirely appreciate the point that he makes that caution is needed where the unlawful act is directed against a third party at whose instance it is not actionable because he suffers no loss. There the claimant's cause of action is, as Hazel Carty, An Analysis of the Economic Torts (2001), p 274 puts it, parasitic on the unlawful means used by the defendant against another party. As to that situation I would prefer to reserve my opinion. But in this case there was no third party. The means used by the conspirators were directed at the claimants themselves. This is a case where the claimants were persuaded by the unlawful means to act to their own detriment which, in para 61 of OBG, Lord Hoffmann said raises altogether different issues. One has to ask why, in this situation, the law should not provide a remedy. The situation that is contemplated is that of loss caused by an unlawful act directed at the claimants themselves. The conspirators cannot, on the Commissioners' primary contention, be sued as joint tortfeasors because there was no independent tort actionable by the Commissioners. This is a gap which needs to be filled. For reasons that I have already explained, I do not accept that the Commissioners suffered economic harm in this case. But assuming that they did, they suffered that harm as a result of a conspiracy which was entered into with an intention of injuring them by the means that were deliberately selected by the conspirators. If, as Lord Wright said in Crofter Hand Woven Harris Tweed Co v Veitch [1942] AC 435, 462, it is in the fact of the conspiracy that the unlawfulness resides, why should that principle not apply here? As a subspecies of the tort of unlawful means conspiracy, the case is virtually indistinguishable from the tort of conspiracy to injure. The fact that the unlawful means were not in themselves actionable does not seem, in this context at least, to be significant. As Professor Joe Thomson put it in An island legacy - The delict of conspiracy, Comparative and Historical Essays in Scots Law, ed Carey Miller and Meyers (1992), p 148, the rationale of the tort is conspiracy to injure. These factors indicate that a conspiracy is tortious if an intention of the conspirators was to harm the claimant by using unlawful means to persuade him to act to his own detriment, even if those means were not in themselves tortious. I would hold that the decision of the Court of Appeal in Powell v Boladz [1998] Lloyd's Rep Med 116 was erroneous and that it should be overruled. I would also hold, in agreement with all your Lordships' that criminal conduct at common law or by statute can constitute unlawful means in unlawful means conspiracy. Had it been open to the Commissioners to maintain a civil claim of damages the tort of unlawful means would have been available to them, even though the unlawful means relied upon were not in themselves actionable Conclusion For these reasons I would allow the appeal by the Commissioners. But I would also allow the cross-appeal by Total. For reasons that are different from those given by the Court of Appeal, I would affirm that part of the Court of Appeal's order by which the Commissioners' claim was struck out. LORD SCOTT OF FOSCOTE My Lords, I have had the great advantage of reading in advance the opinions prepared by all my noble and learned friends. The relevant facts are fully set out in the opinion of Lord Hope of Craighead and I gratefully adopt his exposition. The close, and to my mind completely convincing, analysis of the legal principles applicable to the two issues that arise on this appeal (see para.1 of Lord Hope's opinion) contained in the opinion of Lord Walker of Gestingthorpe probably say all that needs to be said. In view, however, of the importance of the two issues I propose to express in my own words why I have reached the same conclusions. It is important to keep in mind that the two issues arise from a preliminary issue directed to be tried by a Consent Order made on 9 July 2004. The preliminary issue asked this question: "Does the Claimant [i.e. the Commissioners] have, as a matter of law, a cause of action in conspiracy against the Defendant [i.e. Total] as pleaded in the Consolidated and Amended Particulars of Claim?" The question directs attention to the facts as pleaded by the Commissioners. These facts must, for the purposes of the preliminary issue, be assumed to be true. Whether they will, or which of them will, be proved to be true, only time will tell. There are some aspects of the pleaded facts that I wish to emphasise for they bear upon each of the two issues that arise. Paragraph 6 of the Agreed Statement of Facts and Issues, signed by leading and junior counsel for both parties, described the litigation, of which this appeal is the latest, but almost certainly not the last, stage as arising out of "a series of carousel, or missing trader intra-community, frauds". An alternative, and equally apt, description of each carousel, as pleaded by the Commissioners in this case, would be "charade". "Charade" is the name given to a game played frequently at birthday and Christmas parties but has also the colloquial meaning of an "absurd pretence" (see The Concise Oxford Dictionary 9th Ed.). The description of a "carousel fraud" taken from the decision of the VAT Tribunal in Bond v Commissioners of Customs & Excise, quoted by Ward LJ in paragraph 2 of his judgment in the present case, refers to the fraud as consisting of a series of sales of taxable goods, of which sales the initial one is zero rated, under the next one the initial buyer sells the goods and receives VAT from its buyer but then disappears without accounting to the Revenue for the VAT it has received, and the third sale made by the buyer from the "missing trader", is a zero rated sale of the goods back to the original vendor. This seller, who has paid VAT to the "missing trader", then claims back from the Revenue as input tax the amount of the VAT paid to the missing trader. The invoices are all in order so the Revenue accepts the claim for repayment of the input tax but because the "missing trader" has not accounted to the Revenue for the VAT it had apparently received, the Revenue is out-of-pocket by the amount it has had to pay to the vendor under the third sale. This description of a "carousel fraud" assumes valid sales of goods at each step. A charade, however, a pretence and in the present case a fraudulent pretence, is something else. Diplock LJ (as he then was) in Snook v London and West Riding Investments Ltd [1967] 2 QB 786 at 802 described as a "sham" "…acts done or documents executed by the parties to the 'sham' which are intended to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create." A "sale", at its simplest, is the exchange of property for money and it is, I suggest, plain that a contract of sale of goods requires, if the contract is to justify that description, an intention that there should be the payment of a price in exchange for the transfer of property in the goods (see s.2(1) and (3), Sale of Goods Act 1979). Consider these requirements against the facts of the "First Conspiracy" set out in paragraph 5 of the Commissioners' Consolidated Particulars of Claim and taken to be typical of each of the other twelve pleaded conspiracies. Paragraph 5 pleads that Total "... carried out and otherwise participated in a series of transactions in a chain of supply that had no economic purpose other than to cheat and/or defraud [the Commissioners] of revenue …". The transactions, as pleaded, related to 3,780 Nokia mobile telephones and consisted of the following events, all taking place on 15 October 2002.   (1) Total sold the telephones to Redlaw Ltd for £1,672,224 under a zero rated transaction.   (2) On the same day Redlaw sold the telephones to Lockparts Ltd for £1,423,170 plus VAT of £249,054, a total of £1,672,224. If this is taken to be a genuine sale it would have been a sale at an immediate loss of £249,054, the amount of the VAT for which Redlaw was accountable to the Revenue. But it was plainly never intended that Redlaw should pay £249,054 to the Revenue and Redlaw did not do so. Redlaw simply disappeared and became the "missing trader".   (3) On the same day Lockparts sold the telephones to GAK Ltd for £1,428,840 plus VAT of £250,047, a total of £1,678,887. The VAT payable by Lockparts on its purchase from Redlaw was £249,054. Lockparts was therefore accountable to the Revenue for the balance, £993. But Lockparts, too, became a "disappeared" trader and the £993 remains unaccounted for. Leaving aside the £993 VAT balance, Lockparts made an instant paper profit of £6,550 odd on its transaction with GAK.   (4) On the same day GAK, pursuant to written instructions given on that day by Lockparts, paid £1,672,224 into Total's UK bank account, thereby purporting to discharge the sum owing by Redlaw to Total and owing to Redlaw by Lockparts. That left £6,663 still owing by GAK to Lockparts.   (5) On the same day GAK sold the telephones to The Accessory People for £1,436,400 plus VAT of £251,370, a total of £1,687,770. GAK had paid, or purported to have paid, £250,047 VAT on its transaction with Lockparts and so was accountable, and did account, to the Revenue for the balance, £1323. GAK had made an instant paper profit of over £6200 on its transaction with Lockparts.   (6) On the same day The Accessory People sold the telephones to Alldech Ltd for £1,447,740 plus VAT of £253,345. The Accessory People were liable to pay £251,370 VAT under their transaction with GAK and so were liable to account, and did account, to the Revenue for the balance, £1975. The Accessory People had made an instant paper profit of over £9375.   (7) Finally, on the same busy day, Alldech sold the telephones back to Total for £1,508,220 under a zero rated transaction. So Total made an instant paper profit of £164,004 (i.e. £1,672,224 less £1,508,220). Alldech later claimed, and obtained, from the Commissioners the repayment as input tax of the £253,345 VAT that it had paid to The Accessory People. Alldech had made, therefore, an instant profit of £60,480. This profit, and Total's £164,004 profit, The Accessory People's profit of £9375, GAK's profit of £6200 odd and Lockpart's profit of £6,660 odd (if the £6,663 was ever paid by GAK to Lockparts) were funded by the £253,345 input tax repayment made by the Commissioners to Alldech (less, of course, the £1323 and £1975 for which GAK and The Accessory People accounted to the Revenue). What are your Lordships to make of these transactions that had "no economic purpose other than to cheat and/or defraud [the Commissioners] of revenue" and, as pleaded in paragraph 4 of the Consolidated Particulars of Claim, were entered into "…with intent to cheat [the Commissioners] of revenue and/or to defraud the Revenue …"? The telephones, if they existed, did not physically move from the place or custody in which they were in the morning of 15 October 2002, when the carousel began, to anywhere else or anyone else's custody by midnight. At best, if they existed, they started and ended with Total. If it is to be said that property in these telephones, if they existed, left Total, passed down the chain of companies and ended back with Total, at what point during 15 October 2002 did this process begin? We know that no money was ever paid to or by Redlaw and it does not appear that any authority was ever given by Redlaw for the payment made by GAK to Total. But these questions are, perhaps, pointless for it seems clear that the telephones, as objects of an intended sale, were irrelevant. The passing of property in the telephones was not the purpose of the transactions. The purpose was the creation of book entries enabling a claim for repayment of input tax to be made. Article 2 of the First Council Directive, 67/227/EEC of 11 April 1967 says that "… The principle of the common system of value added tax involves the application to goods and services of a general tax on consumption …" (emphasis added) and article 2(1) of the Sixth Directive says that "… a supply of goods and services effected for consideration by a taxable person acting as such is subject to VAT". Article 4(1) of the Sixth Directive defines "taxable person" as "… any person who independently carries out in any place any economic activity …" and "economic activities" are defined in article 4(2) as comprising "… all activities of producers, traders and persons supplying services …" On what basis could it be suggested that the carousel of 15 October 2002, on the basis of the facts as pleaded, involved the participants in trading in goods or supplying services? The several transactions were plainly orchestrated and pre-ordained. None of the participants wanted mobile telephones. All that they wanted was to obtain a money profit at no risk and without doing anything that could remotely be described as trading or supplying goods in a commercial transaction. On the Commissioners' pleaded case Alldech was a fraudulent conspirator, not an innocent trader caught up in somebody else's fraudulent scheme. The pleaded case does not allege that GAK or The Accessory People were conspirators. It is difficult to believe that they did not know or suspect the fraudulent purpose of a scheme under which they were to sign up to buy goods they had never seen and immediately to sell on the goods for an enhanced price. And if they did not know of the fraudulent purpose it is difficult to believe that their lack of knowledge was not attributable to a decision not to enquire, a convenient adoption of a Nelsonian blind eye. Be that as it may, Alldech, on the pleaded case, was a participating conspirator with knowledge of all the pleaded features of the conspiracy and neither expected nor intended to become the owner of mobile telephones. That was not the purpose of the carousel. In my opinion, there was, on 15 October 2002 when the several transactions were entered into, no supply or intention to supply mobile telephones, no change of the property rights in any mobile telephones and no transaction that could claim the description of a contract of sale or a contract for the supply of telephones. This was a fraudulent scheme designed to extract by deception money from the Revenue. If the pleaded facts had been known to the Revenue at the time that Alldech's input tax repayment claim was made, the Revenue would not have paid and would not have been liable to pay. The ECJ's judgment in Optigen Ltd v Customs & Excise [2006] Ch.218 is no authority to the contrary. The ECJ emphasise in their judgment that the terms "supply of goods" and "taxable person acting as such" in the Sixth Directive require an objective assessment to be made (see para.44 of the judgment). In paragraph 46 of the judgment the ECJ said this: "An obligation on the tax authorities to take account, in order to determine whether a given transaction constituted a supply by a taxable person acting as such and an economic activity, of the intention of a trader other than the taxable person concerned involved in the same chain of supply and/or the possible fraudulent nature of another transaction in the chain … of which that taxable person had no knowledge and no means of knowledge, would a fortiori be contrary to [the objectives of the Sixth Directive]." And in paragraph 51 the ECJ repeated that whether a supply of goods had been made by a taxable person acting as such was to be objectively ascertained "… regardless of the intention of a trader other than the taxable person concerned involved in the same chain of supply and/or the possible fraudulent nature of another transaction in the chain, prior or subsequent to the transaction carried out by that taxable person, of which that taxable person had no knowledge and no means of knowledge" (emphasis added). It follows from this that if a trader becomes innocently involved in a fraudulent and/or sham chain of supply, the innocent trader does not necessarily cease to be a person liable to pay output VAT and eligible to claim input VAT. If objectively assessed without regard to the fraud, there would appear to have been a supply of goods by or to the innocent trader, the innocent trader does not by reason of the fraud fall outside the VAT loop. None of this, in my opinion, assists Total in the present case. Alldech was not an innocent trader. GAK and The Accessory People may have been. If Alldech was not an innocent trader but a conspirator in the fraud there is no need to disregard the intentions of the conspirators, the fraudsters, in assessing the true nature of the transactions into which they entered. In my opinion, on the facts as pleaded, neither Total when it entered into its transaction with Redlaw, nor Alldech when it entered into its transaction with The Accessory People, nor Total and Alldech when they entered into the final transaction with one another, were intending to buy or sell, as the case may be, mobile telephones. They were intending to produce pieces of paper invoices, in order to pretend to the Revenue that genuine commercial transactions had taken place and thereby to deceive the Commissioners into paying-up on a spurious input tax repayment claim. The issue is whether in these circumstances the Commissioners have a civil action in tort to recover from Total, as damages for the tort, the loss suffered by the Commissioners by the success of the fraudulent scheme. The tort of conspiracy The pleaded tort is a conspiracy to cheat and/or defraud the Commissioners by unlawful means. The issue is whether this tort requires that the unlawful means relied on include some civil wrong actionable by the claimant against at least one of the conspirators. On this issue I can add nothing of value to the conclusion and reasoning of my noble and learned friends. The Court of Appeal felt bound to follow the earlier Court of Appeal decision in Powell v Boladz [1998] Lloyd's Rep. Med.116 in which Stuart-Smith LJ, with whose judgment the other two members of the Court agreed, had said at 126 that "… the unlawful act relied on must be actionable at the suit of the plaintiff. It is not sufficient that it amounts to a crime or breach of contract with a third party". My Lords, in agreement with my noble and learned friends and for the reasons they have given I too would hold that criminal conduct can constitute unlawful means for the purposes of a tortious conspiracy to injure by unlawful means (see para.95 of Lord Walker's opinion). It must, in my opinion, be kept in mind that the whole of this branch of the law of tort is the result of a step by step development by judges of the action on the case. We were taught at Law School that the action on the case was the means whereby our judicial forbears allowed tortious remedies in damages where harm had been caused in circumstances where the conduct of the authors of the harm had been sufficiently reprehensible to require the conclusion that they ought to be held responsible for the harm. The law whereby harm caused by negligence can be remedied by an action in tort for damages results from a development of the action on the case. The law enabling an action for tortious damages to be brought where two or more persons have joined together with the predominant intention of injuring another person and have successfully carried out their intention is another, and for present purposes highly relevant, example of a judicial development of the action on the case. This is the so-called "lawful means" conspiracy which is tortious notwithstanding that the means employed to cause the harm are themselves neither criminal nor tortious. The essential ingredient of this type of action is the combination of people all intent on causing harm to the victim, not on the type of means employed for doing so. As it was put by Viscount Simon in Crofter Hand Woven Harris Tweed Co.Ltd v Veitch [1942] AC 435 at 445 "If that predominant purpose is to damage another person and damage results, that is tortious conspiracy. If the predominant purpose is the lawful protection or promotion of any lawful interest of the combiners (no illegal means being employed), it is not a tortious conspiracy, even though it causes damage to another person." Where, however, unlawful means are employed by the conspirators to achieve their object and their object involves causing harm to the victim, the intent to cause that harm does not have to be the predominant purpose of the conspiracy. This difference between the torts of lawful means conspiracy and unlawful means conspiracy is sometimes described as anomalous. In my opinion it is not. The difference reflects and demonstrates the essential flexibility of the action on the case. It is not all conduct foreseeably likely to cause, and that does cause, economic harm to another that is tortious. Nor should it be. The circumstances must be such as to make the conduct sufficiently reprehensible to justify imposing on those who have brought about the harm liability in damages for having done so. Bearing that in mind, the proposition that a combination of two or more people to carry out a scheme that is criminal in its nature and is intended to cause economic harm to some person does not, when carried out with that result, constitute a tort actionable by that person is, in my opinion, unacceptable. Such a proposition is not only inconsistent with the jurisprudence of tortious conspiracy, as Lord Walker has demonstrated and explained, but is inconsistent also with the historic role of the action on the case. In my opinion, any coherent law of tortious liability for conspiracy must hold Total liable in tort if the facts of the conspiracies pleaded in this case can be proved. The second issue The second issue is whether the Commissioners can bring a private law action to recover the loss they have been caused by the fraudulent conspiracy. It is said that the damages claim is, in substance, a claim to recover the tax that Redlaw has failed to pay. The action constitutes, it is said, an attempt to make Total liable to pay the tax, an attempt that is barred by article 4 of the Bill of Rights (see para.21 of Lord Hope's opinion). It is said, alternatively, that the statutory VAT scheme establishes exclusive remedies for the recovery of tax or for dealing with false input tax repayment claims and that these remedies cannot be supplemented by a tortious action for damages. Lord Hope, in paragraph 15 of his opinion, has listed the various statutory remedies available under the statutory VAT scheme. My Lords, there is, in my opinion, nothing whatever in the Bill of Rights point. It is true that Total are not taxable under the statutory VAT scheme in respect of any of the pleaded transactions, but the claim against Total is not a claim for tax. It is a claim for damages, for loss, caused by the fraudulent conspiracy. The Consolidated Particulars of Claim claim from Total damages (for the first conspiracy) of "not less than £253,345.50". That was the sum paid by the Revenue to Alldech in response to Alldech's claim for repayment of the VAT Alldech had paid as input tax to The Accessory People. It was not the amount of the VAT in respect of which Redlaw, the missing trader, should have accounted to the Revenue. The claim for a sum in damages not less than the sum paid by the Revenue to Alldech is, however, capable of leading to a misunderstanding. The sum recoverable by the Commissioners as damages may well be less than £253,345. A tortious damages claim must bring into account benefits, as well as losses, that have accrued to the victim from the wrongful conduct. So the Commissioners must give credit for the £1323 and £1975 for which GAK and The Accessory People accounted to the Revenue and must give credit, also, for the value of any statutory right of the Commissioners under the VAT scheme to recover the £253,345 from Alldech (see s.73(2) of the Value Added Tax Act 1994). But this would all be part of the assessment of the quantum of damages recoverable by the Commissioners from Total if the Commissioners succeed in establishing the tort. It is not the levying of tax. As for the point that the statutory VAT scheme prescribes exclusive remedies for the Commissioners, I can, for my part, see no reason why the statutory scheme should be thought to provide protection against tort claims for those who by fraudulent schemes succeed in extracting money from the Commissioners. If the Commissioners have a statutory remedy against Alldech to recover the £235,345 and if Alldech are good for the money, then the economic damage caused by the conspiracy will, presumably, be nil. But if Alldech is not good for the money, or if there is no statutory remedy available in a case such as this, I can see no reason why the Commissioners, the victims of a fraudulent conspiracy, should be barred from recovering damages against the principal conspirator, Total. An intention that that should be so cannot, in my opinion, be attributed to the legislature in enacting the VAT scheme. Conclusion In agreement, therefore, with all my noble and learned friends on the tort of conspiracy point and with Lord Walker and Lord Mance on all other points, I would allow the Commissioners' appeal, dismiss Total's cross-appeal, restore paragraph 1 of the order of Hodge J made on 10 January 2005, and set aside paragraph 1 of the order of the Court of Appeal made on 31 January 2007. LORD WALKER OF GESTINGTHORPE My Lords, The two issues This appeal on a preliminary point of law raises two issues, each of which is important. The first is whether the appellants, the Commissioners of HM Revenue and Customs ("the Commissioners") are entitled to resort to a private law remedy—an action for damages for the tort of conspiracy—in order to recoup value added tax (VAT), which would otherwise be irrecoverable. The second issue is whether (on the facts which the House is required to assume for the purposes of the preliminary issue) the requirements of the common law tort of conspiracy can be established. Although they are distinct the two issues touch at a single point. That is whether (if, contrary to the Commissioners' primary case, a claimant alleging an "unlawful means" conspiracy must establish that the unlawful means consisted of or included the commission of a civil wrong actionable at the suit of the claimant) the Commissioners would have been able to bring a private law claim for fraudulent misrepresentation against a company called Alldech Limited ("Alldech"), which was (on the assumed facts) a participant in a fraudulent conspiracy with the respondent Total Network SL ("Total"). I have set out the two issues in what seems to be their logical order. But the Commissioners' appeal (on the second issue) was opened before Total's cross-appeal (on the first issue) and I will follow the same course. I gratefully adopt the exposition of the facts and the legislation set out in the opinion of my noble and learned friend Lord Hope of Craighead. The tort of conspiracy: background The essential dispute between the parties, on the Commissioners' appeal, is whether the Court of Appeal was right in holding that, in order to establish the tort of "unlawful means" conspiracy, the claimant must show that the unlawful means constituted or included a civil wrong which had been committed by at least one of the conspirators, and was actionable at the suit of the claimant himself. The Court of Appeal made clear that it would not have reached that conclusion had it not felt bound to follow the decision of the Court of Appeal in Powell v Boladz [1998] Lloyd's Rep Med 116. That decision referred (on the material point) to only three authorities, only one being a decision of this House, that is Lonrho Ltd v Shell Petroleum Co Ltd (No. 2) [1982] AC 173 ("Lonrho v Shell"). It might therefore appear to be a short point. But your Lordships have had the advantage of full argument and full citation of authority. Mr Flint QC for Total (echoing Lord Diplock in Lonrho v Shell at p189) urged the House not to extend the scope of an already anomalous tort. Against that Mr Martin QC for the Commissioners argued that on Total's case the tort would be reduced to no more than a barren iteration of joint tortfeasance. In these circumstances it is necessary, I think, to go back to some of what Lord Diplock (in Lonrho v Shell at p188) called the tort's "chequered history" between the first-instance decision of Lord Coleridge CJ in Mogul Steamship Co. Ltd v McGregor, Gow & Co. (1888) 21 QBD 544 ("Mogul") and Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 ("Crofter"). The decision of this House in Crofter can, I think, be seen as the final emergence of the tort of conspiracy in its modern form. But it is necessary to go back further to see why the tort is generally regarded as anomalous, and why the notion of "predominant purpose" or "real and predominant purpose" was defined in Crofter (especially in the speeches of Viscount Simon LC and Lord Wright at pp 445-447 and pp 477-478 respectively) as a necessary ingredient of an "unlawful object" (or "lawful means") conspiracy. In looking at the older cases I have the advantage of traversing some of the same ground as has recently been covered by Lord Hoffmann in his opinion in OBG Ltd v Allan and associated appeals [2007] 2 WLR 920 ("OBG"), paras 6 to 21 and paras 45 to 64. In the latter group of paragraphs Lord Hoffmann concluded (with the concurrence of the majority) that a wrong actionable in private law is a necessary ingredient of the tort of intentionally causing harm by unlawful means (which I shall for brevity call "the intentional harm tort"). That may be thought to add a further layer of anomaly to the tort of conspiracy, if the Commissioners are right on the first issue. That there is an anomaly, or at least something calling for explanation, was recognised as long ago as 1889, when Bowen LJ said in Mogul in the Court of Appeal (1889) 23 QBD 598, 616: "Of the general proposition, that certain kinds of conduct not criminal in any one individual may become criminal if done by combination among several, there can be no doubt." He proceeded to state what he saw as sound reasons for the distinction, but some other distinguished judges have been more sceptical. In Mogul the plaintiffs complained that the defendants (an association of shipowners) had conspired to obtain a monopoly of the China tea trade, mainly by offering a discount on the freight charged to those who confined their shipments to the defendants' vessels. The claim failed at first instance before Lord Coleridge CJ sitting without a jury (1888) 21 QBD 544, before the Court of Appeal (Bowen and Fry LJJ, Lord Esher MR dissenting) (1889) 23 QBD 598 and in this House [1892] AC 25. The distinction between the two varieties of the tort was seen in terms of combination for an unlawful object, or combination to cause harm by unlawful means. The real difficulty (exemplified in the difference of opinion in the Court of Appeal) was in identifying what was unlawful, either as an object or as a means to an end, in the laissez-faire Victorian world of trade competition. Lord Coleridge CJ described the two categories of the tort 21 QBD 544, 550: "And in this case it is clear that if the object were unlawful, or if the object were lawful but the means employed to effect it were unlawful, and if there were a combination either to effect the unlawful object or to use the unlawful means, then the combination was unlawful, then those who formed it were misdemeanants and a person injured by their misdemeanour has an action in respect of his injury." He was almost but not quite persuaded (pp 553-554) that there was a "wrongful and malicious combination to ruin a man in his trade". He concluded that: "I cannot see that these defendants have in fact passed the line which separates the reasonable and legitimate selfishness of traders from wrong and malice." Here Lord Coleridge CJ was identifying the problem of mixed motives - the trader who wants to damage his competitor's business because that will make his own business more profitable - which runs through the development of the law of economic torts, including conspiracy. This point was recently made by Lord Hoffmann (in the context of causing loss by unlawful means) in OBG [2007] 2 WLR 920 paras 134-135, quoting Lord Sumner in Sorrell v Smith [1925] AC 700, 742: 'When the whole object of the defendants' action is to capture the plaintiff's business, their gain must be his loss.' In the Court of Appeal in Mogul Lord Esher MR stated nine rules (23 QBD 598, 609-610). The first seven enunciated a doctrine of "fair trade competition" which, had they prevailed, would have set the development of the law on a very different course. They applied to all traders, whether or not they were acting in concert, and Lord Esher MR treated the defendants' combination as a sort of a fortiori footnote (at p.710). But the views of Bowen and Fry LJJ (which were approved unanimously by this House) insisted in much-quoted passages (at pp 614-618 and pp 626-628) that trade competition, however fierce, was not unlawful unless it involved fraud, misrepresentation, intimidation or molestation; that the defendants did not intend to injure their competitors further than was necessarily involved in the activity of competition; and that a combination of traders to engage in such activity did not amount to an unlawful conspiracy, although the doctrine of restraint of trade might make it unenforceable. Allen v Flood [1898] AC 1, the case about the demarcation dispute between the ironworkers and the woodworkers at a shipyard in Millwall, was regarded at the time as a case of the highest importance, and its importance is still recognised over a century later. It was first argued over four days before an appellate committee of seven, and then again over six days before a committee of nine (three Lords of Appeal in Ordinary and six other peers who held or had held high judicial office). On the second occasion eight judges attended to give the House the benefit of their opinions (the last time that ever occurred). The judges divided 6-2 in favour of the plaintiffs (the respondents in the appeal) but the House divided 6-3 in favour of Allen (one of the three original defendants, but by then the only appellant). The Lord Chancellor, Lord Halsbury, presided but was in the minority. The case is of enormous interest as a matter of legal and social history (see RFV Heuston, Legal Prosopography (1986) 102 LQR 90). But as regards conspiracy it is of limited importance since although conspiracy was an issue on the pleadings, at first instance (Kennedy J with a jury) the judge ruled that there was no evidence of conspiracy (or of intimidation, coercion or breach of contract). Allen, the London representative of the Boilermakers' Society, had simply been summoned to the shipyard, and (acting on his own initiative) told the management what would happen if Flood and Taylor (woodworkers who were known to have done ironwork at another yard) were not discharged (as they could be without a breach of contract, since they were employed by the day). The absence of a conspiracy was most strongly emphasised by Lord Macnaghten [1898] AC1, 153: "the decision of this case can have no bearing on any case which involves the element of oppressive combination. The vice of that form of terrorism commonly known by the name of 'boycotting,' and other forms of oppressive combination, seem to me to depend on considerations which are, I think, in the present case conspicuously absent." To my mind the main significance of Allen v Flood to the present appeal is in explaining the delicacy with which, about four years later, the House approached Quinn v Leathem [1901] AC 495. The Earl of Halsbury LC was again presiding, and the committee included several law lords who had sat in Allen v Flood. (Heuston's article does not advert to the curious fact that when this House gave judgment on 5 August 1901, there were according to the Law Reports six speeches, given by the Earl of Halsbury LC, Lord Macnaghten, Lord Shand, Lord Brampton, Lord Robertson and Lord Lindley. Lord Davey is recorded as having read the speeches of Lord Shand, Lord Robertson and Lord Lindley but not as having given any speech of his own. Mr G R Dymond of the House of Lords Library has kindly checked that the Lords' Journals confirm what is in the Law Reports.) Quinn was treasurer of a Belfast butchers' association. Leathem, who traded as a butcher, employed some non-union men, although when the union made difficulties he asked for them to be admitted to the union, and offered to pay their dues. The union put pressure on Munce, a wholesale customer of Leathem, to stop buying his meat. It also called out Dickie, one of Leathem's employees. The jury found for Leathem, holding that there had been a malicious conspiracy between Quinn and other officers of the union. The Irish Court of Appeal affirmed this. So, unanimously, did this House. The House's anxiety to explain why Allen v Flood was not in point makes it quite difficult to discern what Quinn v Leathem did decide. But it can, at any rate with hindsight, be recognised as a case of "unlawful object" (or "lawful means") conspiracy, since (on the facts found) the union did not have the justification of advancing its own interests, and was acting primarily for the purpose of punishing and injuring Leathem (see especially the speeches of Lord Macnaghten at p 511 and Lord Shand at p 515; Lord Lindley, however, at p 538 seems to have regarded it as a case of unlawful means). In Sorrell v Smith [1925] AC 700 most of the House saw Quinn v Leathem as a case of unlawful object, not unlawful means (see especially Viscount Cave LC at p 712, Lord Dunedin at pp 719 and 724, Lord Sumner at p 735 and Lord Buckmaster at p 744). In Crofter [1942] AC 435 the House, building on Sorrell v Smith, finally established the basic principles of the modern tort. There is a key passage in the speech of Viscount Simon LC at p 445: "The combiners may feel that they are killing two birds with one stone, and, even though their main purpose may be to protect their own legitimate interests notwithstanding that this involves damage to the plaintiffs, they may also find a further inducement to do what they are doing by feeling that it serves the plaintiffs right. The analysis of human impulses soon leads us into the quagmire of mixed motives, and even if we avoid the word 'motive', there may be more than a single 'purpose' or 'object.' It is enough to say that if there is more than one purpose actuating a combination, liability must depend on ascertaining the predominant purpose. If that predominant purpose is to damage another person and damage results, that is tortious conspiracy. If the predominant purpose is the lawful protection or promotion of any lawful interest of the combiners (no illegal means being employed), it is not a tortious conspiracy, even though it causes damage to another person." Another very important passage is in the speech of Lord Wright, at p 462, and it has been the subject of a good deal of discussion before your Lordships: "The rule may seem anomalous, so far as it holds that conduct by two may be actionable if it causes damage, whereas the same conduct done by one, causing the same damage, would give no redress. In effect the plaintiff's right is that he should not be damnified by a conspiracy to injure him, and it is in the fact of the conspiracy that the unlawfulness resides. It is a different matter if the conspiracy is to do acts in themselves wrongful, such as to deceive or defraud, to commit violence, or to conduct a strike or lock-out by means of conduct prohibited by the Conspiracy and Protection of Property Act, 1875, or which contravenes the Trade Disputes and Trade Unions Act 1927." My Lords, I would draw attention to three general features of the authorities down to, and including, Crofter. First, the debate is overwhelmingly about intention (or purpose, or object) culminating in the approval of "real and predominant purpose" (Viscount Simon LC in Crofter at p 446) as the essential ingredient of the "unlawful object" variety of the tort. Second, there is little or no discussion of whether unlawful means can include conduct which is a criminal offence but cannot found a civil cause of action. Most of the examples of unlawful means given in the speeches and judgments are expressed in general, fairly non-technical terms (fraud, misrepresentation, molestation, intimidation, obstruction). Lord Wright, in the passage just quoted from his speech in Crofter, includes some statutory offences, but he does not seem to have regarded it as a point calling for reasoned discussion. Third, there are frequent references (again, the quotation from Lord Wright in Crofter is an example) to the anomaly that the conduct of two or more persons may be actionable whereas the same conduct on the part of a single person would not be. This third point calls for a little more discussion. In Mogul, Bowen LJ (23 QBD 598, 616) gave two reasons for it: "The distinction is based on sound reason, for a combination may make oppressive or dangerous that which if it proceeded only from a single person would be otherwise, and the very fact of the combination may shew that the object is simply to do harm, and not to exercise one's own just rights." The first reason is not very satisfactory, since (as has very often been pointed out, for instance by Lord Sumner in Sorrell v Smith at p 741 and Lord Diplock in Lonrho v Shell at p189) it all depends on the particular facts. The second reason seems to me more principled, focusing as it does on the fact that the claimant's damage is caused by two or more persons acting in concert to carry out an unlawful plan. That is, I think, what was behind an observation of Lord Dunedin in Sorrell v Smith at p 725: "Now the moment that that is recognised, ie, that the essence of conspiracy on which civil action is founded is a criminal conspiracy, though of course unless actual damage has followed no civil action will lie, the moment that fact is recognised, you at once bring in the spirit of the criminal law, where motive or intention—the mens rea—is everything." That identifies what sets conspiracy apart from other torts, and emphasises the first point made above—the intense focus, in the tort of conspiracy, on intention. It is also worth noting that in some factual situations (such as that in the present appeal) the fraud disclosed by the assumed facts could not have been carried out otherwise than by a number of persons acting in concert. I suspect that the judges at the end of the 19th century also had a third reason, largely unarticulated but appearing in Lord Macnaghten's dictum about boycotts in Allen v Flood. That was the deep suspicion which the governing class had, in Georgian and Victorian England, of collective action in the political and economic spheres, as potential threats to the constitution and the framework of society. It is a theme from the Gordon Riots in 1780 to the Land League in Ireland a century later (see R v Parnell (1881) 14 Cox CC 508), with the conventions called by the corresponding societies in the 1790s, the Peterloo Massacre in 1819, the Tolpuddle Martyrs in 1834 and the Chartist Movement (1838-1848) and the rise of the trade unions in between. The tort of conspiracy: the modern cases The litigation in Lonrho v Shell [1982] AC 173 arose from sanctions imposed against Southern Rhodesia, after UDI, under the Southern Rhodesia Act 1965. Lonrho's claim was that Shell and its co-defendant BP had breached the sanctions and caused loss to Lonrho and its Portuguese co-owner of a pipeline from Beira in Mozambique to a refinery in what was then Southern Rhodesia. The matter came before the court as issues of law arising on assumed facts in the course of an arbitration. The relevant issue was numbered 5(b): "Whether the claimants have a cause of action for damage alleged to have been caused by such breaches [of the sanctions orders] by virtue only of the allegation that there was an agreement to effect them." That is a rather bald way of putting the issue: the essential point was whether it was fatal that there was no pleading of an intention to injure Lonrho and its co-plaintiff, as Lord Diplock explained at p188: "Question 5(b), to which I now turn, concerns conspiracy as a civil tort. Your Lordships are invited to answer it on the assumption that the purpose of Shell and BP in entering into the agreement to do the various things that it must be assumed they did in contravention of the sanctions Order, was to forward their own commercial interests; not to injure those of Lonrho. So the question of law to be determined is whether an intent by the defendants to injure the plaintiff is an essential element in the civil wrong of conspiracy, even where the acts agreed to be done by the conspirators amount to criminal offences under a penal statute." So the question was clearly understood as being one of intention, and the reference to "criminal offences under a penal statute" (introduced as it was by the words "even where") does not suggest that the criminal element was seen as a potential flaw in Lonrho's case. Lord Diplock then briefly discussed the classic authorities on the tort of conspiracy; I have already mentioned some of his observations. He stated (at p189) that none of the authorities "was directed to a case where the damage-causing acts although neither done for the purpose of injuring the plaintiff nor actionable at his suit if they had been done by one person alone, were nevertheless a contravention of some penal law." He concluded that the House had an unfettered choice, and his unhesitating choice (agreeing with the courts below in their conclusion if not in their reasoning) was not to extend the scope of the tort, and to answer question 5(b) in the negative. The other members of the House agreed. My Lords, the reasoning in Lord Diplock's speech seems to me to be very compressed, especially in the passage from which I have just quoted. I am very conscious of the danger of trying to expound speeches and judgments (even of the most eminent judges) as if they were Acts of Parliament. It is a danger of which Slade LJ (delivering the judgment of the Court of Appeal in Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391—"Metall") was conscious. Nevertheless he did subject the speech of Lord Diplock to "detailed textual analysis" (as Lord Bridge of Harwich put it in Lonrho plc v Fayed [1992] 1 AC 448, 468—"Lonrho v Fayed"). In analysing Lonrho v Shell, Slade LJ also quoted from and paid close attention to the reasoning of the arbitrators, Parker J and the Court of Appeal, although it is far from clear that Lord Diplock (whose speech on this issue runs to no more than one and a half pages) had the reasoning in the lower courts at the forefront of his mind. In Lonrho v Fayed this House unanimously disapproved of the views which the Court of Appeal in Metall had expressed about the effect of Lord Diplock's speech in Lonrho v Shell. In doing so the House also clarified the law, which had fallen into some confusion as a result of Lonrho v Shell as interpreted in Metall. In those circumstances it is unnecessary and inappropriate, I suggest, for your Lordships to revisit the exegesis of Lord Diplock's speech. It is sufficient to repeat that it was concerned solely with the issue of intention, and that Lord Diplock uncharacteristically failed to make a clear distinction between the requirement of predominant purpose under one variety of the tort of conspiracy and the lower requirement of intentional injury needed for the other variety. Clarity was restored by the speech of Lord Bridge in Lonrho v Fayed [1992] 1 AC 448, with which the rest of the House agreed. (Lord Templeman also stated, with the agreement of the majority, that the ambits and ingredients of the torts of conspiracy and unlawful interference might require further analysis and reconsideration.) The key passage in the speech of Lord Bridge is at p464, after a citation of Lord Diplock's reference to injury to the plaintiff being the predominant purpose of the conspiracy: "But this reasoning has no relevance to the second type of conspiracy which employs unlawful means. Of this type Lord Devlin said in his speech in Rookes v Barnard [1964] AC 1129, 1204, . . . 'In the latter type . . . the element of conspiracy is usually only of secondary importance since the unlawful means are actionable by themselves.' It is no doubt for the reason mentioned by Lord Devlin that there is no direct authority, unless it be Rookes v Barnard itself, establishing the negative proposition that the tort of conspiracy to injure by unlawful means may be established without proof that the intention to injure the plaintiff was the predominant purpose of the conspirators. But in the many cases where plaintiffs have asserted a conspiracy to injure, but have been unable to prove that any unlawful means were used, judgments in the Court of Appeal and speeches in your Lordships' House emphasising the requirement of a predominant purpose to injure have repeatedly included dicta indicating that this requirement does not apply where the means used to effect the conspirator's purpose are unlawful." Lord Bridge then gave some examples, including a passage from the speech of Lord Wright in Crofter, of which I have already quoted part. He also quoted from the judgments below in Lonrho v Shell before coming to Metall. Of that case he said (at p468): "My Lords, I am quite unable to accept that Lord Diplock or the other members of the Appellate Committee concurring with him, of whom I was one, intended the decision in Lonrho v Shell [1982] AC 173 to effect, sub silentio, such a significant change in the law as it had been previously understood. The House, as is clear from the parties' printed cases, which we have been shown, had never been invited to take such a step. Moreover, to do so would have been directly contrary to the view of Lord Denning MR expressed in the judgment which the House was affirming and inconsistent with the dicta in what Lord Diplock described, at p188, as 'Viscount Simon LC's now classic speech in [Crofter].' I would overrule the Metall case in this respect." I now come to Powell v Boladz [1998] Lloyd's Med Rep 116, which the Court of Appeal saw as compelling it to require civil actionability as an ingredient of unlawful means. It was a very unusual conspiracy claim, alleging falsification of hospital records. I need not go further into the complicated facts. Stuart-Smith LJ (with whom Morritt and Schiemann LJJ agreed) saw three answers to the claim for conspiracy. The second (at p126) is in point: "Secondly the unlawful act relied upon must be actionable at the suit of the plaintiff. It is not sufficient that it amounts to a crime or breach of contract with a third party. (See Clerk & Lindsell on Torts, 17th ed. Para 23-80, Marrinan v Vibart [1963] 1 QB 234 & 528, Hargreaves v Bretherton [1959] 1 QB 45, Lonrho v Shell [1982] AC 173 per Lord Diplock at p186 etc). For this reason this form of unlawful act conspiracy adds little to the remedies available to a plaintiff." Mr Martin QC (for the Commissioners) described this passage as plainly wrong. Mr Flint QC (for Total) showed little enthusiasm for its reasoning. But to say that the reasoning in Powell v Boladz is unsound is only the first step towards identifying the correct principle. That question has been considered in a number of recent cases, which (to say the least) do not speak with one voice. The judgment of the Court of Appeal in this case, holding itself bound by Powell v Boladz, was handed down on 31 January 2007. That judgment referred to the unreported decision of Davis J in Mbasogo v Logo Ltd [2005] EWHC 2034 (QB) ("Mbasogo") but not to the fact that that case had by then gone to the Court of Appeal (Sir Anthony Clarke MR, Dyson and Moses LJJ) [2006] EWCA Civ 1370; [2007] 2 WLR 1062 which gave its reserved judgment on 23 October 2006. That division of the Court of Appeal declined to go far into the law on unlawful means conspiracy (since it held the claim unjusticiable on wider grounds) but the Court did (at para 104) express doubt as to whether it was bound by Powell v Boladz. Davis J's judgment in Mbasogo contains an admirable discussion of the "unlawful means" issue, with mention of all the recent cases. Because the judgment is unreported I will give a brief summary. Davis J pointed out that in an interlocutory appeal in Associated British Ports v Transport & General Workers' Union [1989] 1 WLR 939, Stuart-Smith LJ had (in agreement with Butler-Sloss LJ but contrary to the view of Neill LJ) taken the view, for the purposes of the intentional harm tort (p 966): "that at the very least it is strongly arguable that where the unlawful relied upon in this tort is a breach of statute, it is not necessary that it should be one that is actionable in tort at the suit of the plaintiff." That case was not referred to in Powell v Boladz (decided on 1 July 1997), nor in Credit Lyonnais Bank Nederland NV v Export Credit Guarantee Department [1998] 1 LLR 19, decided by the Court of Appeal (Stuart-Smith, Hobhouse and Thorpe LJJ) on 23 July 1997. At p 32 Stuart-Smith LJ recorded (using the same language and referring to the same authorities) counsel's concession that the unlawful act must be actionable at the suit of the plaintiff. That statement of the law was followed by Toulson J in Yukong Line Ltd of Korea v Rendsburg Investments Corp. of Liberia [1998] 1 WLR 294, 311-314. Toulson J's reasoning was based, it seems to me, on an over-elaborate textual analysis of Lord Diplock's speech in Lonrho v Shell, without regard to the authoritative explanation given by Lord Bridge in Lonrho v Fayed. I would make the same respectful criticism of the judgment of Laddie J in Michaels v Taylor Woodrow Developments Ltd [2001] Ch 493 (especially paras 30-34). In Surzur Overseas Ltd v Koros [1999] 2 LLR 611, the Court of Appeal refused to strike out a claim alleging an unlawful means conspiracy by deception of the Court (leading it to lift an order preventing the sale of three ships). Waller LJ (with whom Hirst and Aldous LJJ agreed) stated at p 617: "This aspect was not debated in any detail before Mr Justice Longmore at all and was raised very much at the last moment in argument [before] us. It would clearly be wrong to reach any final conclusion. What is clear, in my view, is that it is eminently arguable that in an unlawful means conspiracy the unlawful means do not have to be actionable at the suit of the plaintiff." Crime as unlawful means My Lords, faced with this confusion in the recent case-law, the House must, I suggest, go back to the general principles to be derived from the older cases in which the economic torts have been developed. It is however necessary to bear in mind that their development has been a long and difficult process, and may not yet be complete, as Lord Templeman observed (with the concurrence of the majority) in Lonrho v Fayed [1992] 1 AC 448, 471. A particular difficulty is that it has been generally assumed, throughout the 20th-century cases, that "unlawful means" should have the same meaning in the intentional harm tort and in the tort of conspiracy. A good deal of legal reasoning in the speeches and judgments (as to the ingredients of one or other of these torts) has been based on the assumption that the meaning must be the same in both. That assumption is however challenged, if the Commissioners are correct, by the speech of Lord Hoffmann in OBG (with which the majority concurred). I shall have to come back to that difficulty. In searching for general principle I start with a very simple, even naïve point. The man in the street, if asked what an unlawful act was, would probably answer 'a crime.' He might give as an example theft, obtaining money by false pretences, or assault occasioning actual bodily harm. He might or might not know that each of these was also a civil wrong (or tort) but it is unlikely that civil liability would be in the forefront of his mind. The reaction of a lawyer would be more informed but it would not, I suggest, be essentially different. In its ordinary legal meaning "unlawful" certainly covers crimes and torts (especially intentional torts). Beyond that its scope may sometimes extend to breach of contract, breach of fiduciary duty, and perhaps even matters which merely make a contract unenforceable, but the word's appropriateness becomes increasingly debatable and dependent on the legal context. In the very important criminal case of R v Clarence (1888) 22 QBD 23 (in which a question of law on sections 20 and 47 of the Offences against the Person Act 1861 was argued before a court of 13 judges, several of whom later gave their opinions to the House in Allen v Flood) Stephen J (at p 40) expressed the view that: "The word 'unlawfully' must here be construed to mean 'unlawfully' in the wide general sense in which the word is used with reference to acts which if done by conspirators are indictable, though not if they are done by individuals. This general sense may, I think, be said to be 'immoral and mischievous to the public'. I do not agree with the doctrine that the word 'unlawfully' is used here in this wide sense. The use of the word in relation to conspiracy appears to me to be exceptional." What was exceptional about it was its extension downwards in the scale of blameworthy conduct. The unlawfulness of criminal conduct was at the top end of the scale, and too obvious to call for mention. The enquiry how far downwards to go seems to me to be a feature common to all the leading cases in which the tort of unlawful means conspiracy has been developed. Until Lord Diplock's speech in Lonrho v Shell there was never a clear issue as to whether the alleged unlawful means must be actionable (as a separate tort) at the suit of the plaintiff. Lord Diplock himself acknowledged this [1982] AC 173, 189. His attention may have been drawn to the point by his earlier disapproval (at p187) of some wide observations made by Lord Denning MR in an interlocutory appeal in Ex parte Island Records Ltd [1978] Ch 122. In the long period during which this issue did not arise for decision there is, unsurprisingly, little discussion of it in the authorities. They concentrate on the issue of intention (which was also at the heart of question 5(b) in Lonrho v Shell). But all the statements of general principle in the classic cases seem to me to be consistent with the proposition that unlawful means, both in the intentional harm tort and in the tort of conspiracy, include both crimes and torts (whether or not they include conduct lower on the scale of blameworthiness) provided that they are indeed the means by which harm is intentionally inflicted on the claimant (rather than being merely incidental to it). I do not want to multiply citations but I would instance Lord Watson in Allen v Flood at p96 (emphasising "illegal means directed against that third party"); Viscount Cave LC in Sorrell v Smith at p 714 ("means which are in themselves unlawful, such as violence or the threat of violence or fraud"); Lord Wright in Crofter at p 462 (quoted in para 75 above, and instancing some statutory offences); Lord Devlin in Rookes v Barnard [1964] AC 1129, 1209 ("in some of the dicta [on conspiracies] the language suggests that the means must be criminal or tortious and in others that breach of contract would do; but in no case was the point in issue;" in the earlier much-discussed sentence at p 1204 I would not give much weight to the position that the word "usually" occupies in the sentence); and Lord Denning MR and Russell LJ in Daily Mirror Newspapers Ltd v Gardner [1968] 2 QB 762, 783, 785 (though that decision is questionable: see (1968) 84 LQR 310). From these and other authorities I derive a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant is actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort. To hold otherwise would, as has often been pointed out, deprive the tort of conspiracy of any real content, since the conspirators would be joint tortfeasors in any event (and there are cases discussing the notion of conspiracy "merging" into some other tort, but I need not go far into those: Surzur Overseas Ltd v Koros [1999] 2 LLR 611; Kuwait Oil Tanker Co. SAK v Al Bader [2000] 2 All ER (Comm) 271). In my opinion your Lordships should clarify the law by holding that criminal conduct (at common law or by statute) can constitute unlawful means, provided that it is indeed the means (what Lord Nicholls of Birkenhead in OBG at para 159 called "instrumentality") of intentionally inflicting harm. In Lonrho v Shell the sanctions order against Southern Rhodesia was part of the story, but it was not the instrument for the intentional infliction of harm. With great respect to Lord Hoffmann (in OBG at para 57) it is in my view what Shell and BP did not intend, rather than what Parliament did not intend, that is most relevant to that decision. Having said that I would accept that the sort of considerations relevant to determining whether a breach of statutory duty is actionable in a civil suit (Cutler v Wandsworth Stadium Ltd [1949] AC 398) may well overlap, or even occasionally coincide with, the issue of unlawful means in the tort of conspiracy. But the range of possible breaches of statutory duty, and the range of possible conspiracies, are both so wide and varied that it would be unwise to attempt to lay down any general rule. What is important, to my mind, is that in the phrase "unlawful means" each word has an important part to play. It is not enough that there is an element of unlawfulness somewhere in the story. OBG revisited I must now come back to OBG [2007] 2 WLR 920. It was a case about an invalid appointment of receivers in which the appellants sought to widen the scope of the tort of conversion. It was heard with Douglas v Hello! Ltd, which raised issues about breach of confidence, and Mainstream Properties Ltd v Young, a case which might have been run as a claim for dishonest assistance in breach of fiduciary duty. Despite these disparate issues the appeals were heard together because they all raised issues as to the intentional harm tort. In a passage of his opinion with which the majority concurred (paras 45-60) Lord Hoffmann observed in relation to the intentional harm tort (para 49): "In my opinion, and subject to one qualification, acts against a third party count as unlawful means only if they are actionable by that third party. The qualification is that they will also be unlawful means if the only reason why they are not actionable is because the third party has suffered no loss." Lord Nicholls of Birkenhead took a different view (paras 149-163). Lord Hoffmann stated at para 56: "Your Lordships were not referred to any authority in which the tort of causing loss by unlawful means has been extended beyond the description given by Lord Watson in Allen v Flood [1898] AC1, 96 and Lord Lindley in Quinn v Leathem [1901] AC 495, 535. Nor do I think it should be." He added at para 57 (on which I have already commented): "Likewise, as it seems to me, in a case like [Lonrho v Shell], it is not for the courts to create a cause of action out of a regulatory or criminal statute which Parliament did not intend to be actionable in private law." And at para 60: "I do not think that the width of the concept of 'unlawful means' can be counteracted by insisting upon a highly specific intention, which 'targets' the plaintiff. That, as it seems to me, places too much of a strain on the concept of intention." These passages (on which Mr Flint relied in his printed case and his oral submissions) prompted me to mention, near the beginning of this opinion, the risk of a new layer of anomaly being added to the tort of conspiracy (that is, that "unlawful means" would have a meaning for the purposes of a conspiracy claim different from its meaning for the purposes of a claim based on the intentional harm tort). But as Lord Hoffmann develops his reasoning in paras 51-58 of his opinion it becomes apparent that he is concerned, not only with the legal quality of the unlawful means (tort or crime?) but also with their effect in interfering with a third party's freedom of economic action. Cases like RCA Corporation v Pollard [1983] Ch 135 and Isaac Oren v Red Box Toy Factory [1999] FSR 785, show that a trader may suffer economic loss as the result of a civil wrong by a bootlegger actionable by the proprietor (or sometimes, an exclusive licensee) of intellectual property rights, without the trader having a remedy. The breach of the intellectual property rights is a statutory tort, but it is actionable only by those with a sufficient title to them. As I understand his opinion, Lord Hoffmann was concerned to limit the intentional harm tort to cases where the claimant has been "intentionally struck at through others" (in the words of Lord Lindley in Quinn v Leathem [1901] AC 495, 535, quoted by Lord Hoffmann at para 46). He made clear (para 61) that "two party intimidation" raises quite different issues. This point is developed in para 43 of the opinion of my noble and learned friend Lord Hope of Craighead, and in para 124 of the opinion of my noble and learned friend Lord Mance, and I respectfully agree with their observations. The intentional harm tort and the "unlawful means" variety of conspiracy share the ingredients of the intentional infliction of harm on the claimant. But that variety of conspiracy is not simply the intentional harm tort committed by joint tortfeasors. The gist of the intentional harm tort (apart from exceptional "two party" cases) is striking at the claimant through a third party, and doing so by interfering with his freedom of economic activity. The gist of conspiracy is damage intentionally inflicted by persons who combine for that purpose (Viscount Simon LC in Crofter at p 444) and the claimant need not be a trader who is injured in his trade, though that is the most common case. In my opinion your Lordships are driven to the conclusion that, as the economic torts have developed, "unlawful means" has a wider meaning in the tort of conspiracy than it has in the intentional harm tort. Some scholars have classified the tort of unlawful means conspiracy as a form of secondary liability (notably Hazel Carty, An Analysis of the Economic Torts (2001) p 22, agreeing with Philip Sales, The Tort of Conspiracy and Civil Secondary Liability [1990] CLJ 491). They would not apply this classification to a conspiracy to injure by lawful means. If an unlawful means conspiracy is indeed a form of secondary liability for a civil wrong then the need for the unlawful means to be actionable as a civil wrong would be self-evident. However the premise is in my opinion mistaken. The best judicial support for it seems to be some comments by Palles CB in Kearney v Lloyd (1889) 26 LR Ir 268, but in Crofter [1942] AC 435, 461-462 Lord Wright said that later cases have decisively held the contrary (this passage immediately precedes the passage which I have set out in para 75 above). Sales' article was written (like other scholarly comments such as John Eekelaar, The Conspiracy Tangle (1990) 106 LQR 223) in the uneasy period after this House's decision in Lonrho v Shell and the Court of Appeal's decision in Metall and before the House's decision in Lonrho v Fayed. A later well-regarded article by Sales and Stilitz, Intentional Infliction of Harm by Unlawful Means (1999) 115 LQR 411 repeated (at p435) the proposition: "It is now clear that conspiracy to injure another by unlawful means is a distinct form of liability, under which the conspirators are made jointly liable for acts committed by one or more of them, which are acts which would be independently actionable by P if committed by only one person. Unlawful means conspiracy is thus an example of secondary liability, and is quite distinct from the intentional harm tort (for which the unlawful means involved do not have to be actionable independently of the tort itself)." The last part of this passage has been shown to be incorrect by the decision of this House in OBG (see the speech of Lord Hoffmann at paras 59-61). In my opinion the first part of the passage is also unsustainable. The authors cite in support of it Lonrho v Shell; Lonrho v Fayed; Rookes v Barnard; Marrinan v Vibart; and Powell v Boladz. I need not repeat why those authorities do not in my opinion support it, beyond noting the passage relied on in the speech of Lord Bridge in Lonrho v Fayed [1992] 1 AC 448, 466G: "As the judgments in both courts below and the speech of Lord Diplock make clear, the fact dictating a negative answer to the second question was the absence of any intention to injure Lonrho. Parker J said:        'The claimants accept that there is no case in which   an undirected crime, not itself a civil wrong,   committed without intent to injure, has been   held, or, I think, even alleged to be actionable on   the mere ground that it was committed pursuant to   agreement.'" The whole context of Lonrho v Shell shows that the emphasis in this passage (and the other passages quoted) was on the absence of an intention to injure, and not on the need for an independently actionable wrong. In short, and with great respect to those who take a different view, any suggestion that the unlawful means conspiracy is a form of secondary liability, and must therefore have an actionable wrong as an essential ingredient, seems to me to be a circular argument which assumes what it sets out to prove. Is a private law action open to the Commissioners? All the foregoing discussion is academic if, as my noble and learned friend Lord Hope of Craighead would hold, a private law action for damages for conspiracy is not open to the Commissioners. Lord Hope founds his conclusion, as I understand it, not so much on the Bill of Rights 1688 as on the comprehensive and exhaustive nature of the statutory code for the administration and collection of VAT contained in the Value Added Tax Act 1994. My noble and learned friend also considers that the Commissioners have no commercial interests needing to be protected by the tort of conspiracy. This last point was not, so far as I can see, raised by Mr Flint in his written and oral submissions. I respectfully differ from Lord Hope on this part of the case. The Commissioners' statutory powers are not derived solely from the Value Added Tax Act 1994. They are also derived from the Commissioners for Revenue and Customs Act 2005, which lays down the Commissioners' statutory functions in connection with VAT (section 5(1)(b) and (2)(b)). The Commissioners have ancillary powers (section 9) and specific power to conduct civil proceedings (section 25). The Commissioners regularly present bankruptcy petitions and winding-up petitions against defaulting taxpayers of all sorts. In a winding up they can if necessary proceed against a receiver for misfeasance (Inland Revenue Commissioners v Goldblatt [1972] Ch 498). They do so in order to recover tax (not to "levy" it). So far as I can see they have no express statutory power to seek these remedies, but it has never been doubted that they are available. Similarly (though your Lordships heard no argument on the point from either side) there does not appear to be any specific statutory power for the Commissioners to obtain a freezing order. But it was only by obtaining a freezing order in private law proceedings that the Commissioners were able to prevent the conspirators from removing their ill-gotten gains out of the jurisdiction. But for a freezing order, there would have been a severe loss to the Commissioners and to the general body of taxpayers. The Commissioners' action in this case has been described in Total's written and oral submissions as unprecedented. That may be so. The first-ever application for a freezing order (originally called a Mareva injuction) was unprecedented, but it has proved very efficacious in strengthening civil remedies against fraud. In the well-known case of Ramsay v Inland Revenue Commissioners [1982] AC 300, 326, Lord Wilberforce said: "While the techniques of tax avoidance progress and are technically improved, the courts are not obliged to stand still. Such immobility must result either in loss of tax, to the prejudice of other taxpayers, or to Parliamentary congestion or (most likely) to both." Lord Wilberforce said that in relation to artificial (but not unlawful) tax avoidance which was then costing the Exchequer millions of pounds a year. Your Lordships are now concerned with illegal, fraudulent tax evasion which is costing the Exchequer more than a billion pounds a year. Indeed it is worse than evasion: it is the fraudulent extraction of money from the Exchequer. The Commissioners do not now handle large sums of cash, since there are safer means for the transfer of money. But if an official vehicle carrying cash belonging to the Commissioners (cash representing collected taxes) were hijacked and the cash stolen, it seems to me that the Commissioners would undoubtedly have a civil remedy available to reclaim it, if the robbers were apprehended and the proceeds of the robbery traced to a bank account. In my opinion the present case is essentially the same. For these reasons I disagree with the conclusion of the Court of Appeal on what it called the third issue (paras 80-87 of its judgment). I would therefore, if necessary, have upheld the Commissioners' fallback position (para 63 above). I would allow the Commissioners' appeal and dismiss Total's cross-appeal. LORD MANCE My Lords, I have had the benefit of reading in draft the opinions of my noble and learned friends, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe and Lord Neuberger of Abbotsbury. I gratefully adopt the summary of the facts in paragraphs 3 to 10 of Lord Hope's and paragraphs 49 and 51 of Lord Scott's opinions. The questions to which they give rise are (a) whether the pursuit of any claim by the Commissioners against Total Network SL in conspiracy is precluded by (i) the Bill of Rights and/or (ii) the statutory scheme of the Value Added Tax Act 1994 ("the VAT Act 1994") and (b) whether, if it is not, it can as pleaded exist in law. I will start with issue (b). All of your Lordships are of the view on issue (b) that the Commissioners' pleaded claim can as pleaded exist in law. The Commissioners put their claim in two alternative ways, as Lord Neuberger explains in paragraphs 142 and 164-167 of his opinion. I agree with him that both are arguable under the domestic and European legal principles that he examines. But I would put this on a narrow basis. One way in which the Commissioners put their case focuses on the non-payment of VAT by Redlaw (£249,054.75) and, to a much lesser extent, Lockparts (£993); the other on the VAT credit which was claimed by, and in respect of which the Commissioners were induced to pay £253,345.50 to, Alldech. The Commissioners allege a conspiracy to cause them loss by unlawful means, consisting of the commission of the common law offence of cheating the public revenue either in respect of the VAT which the Commissioners should have received from Redlaw and Lockparts or out of the VAT credit they were induced to pay to Alldech. It is not, for present purposes, disputed that there is a good case for saying that Total, Redlaw, Lockparts and Alldech were together guilty of this common law offence of cheating the revenue. There is nothing in the scheme of the VAT Act 1994, or in the various civil and criminal remedies for which it provides, to prevent prosecution for the common law offence such as was pursued under the predecessor legislation in R v. Mavji [1987] 2 AER 758. Total's primary response is that the commission of a crime alone is insufficient to constitute "unlawful means" for the purposes of grounding a tortious cause of action for conspiracy. Total submits that for this purpose "unlawful means" would have to consist in conduct that was itself actionable by the Commissioners in tort (or possibly breach of contract). In the case of the payment made to Alldech, the Commissioners do allege that the cheating was accompanied by positive deceit, itself actionable by them in tort against Alldech. In response to this, Total submits, and the Court of Appeal held, that the statutory scheme of the VAT Act 1994 precludes any independent actionable remedy in tort against Alldech. The House is not concerned with an alleged conspiracy committed with the predominant intention of injuring the Commissioners. In the Court of Appeal, counsel for the Commissioners declined on instructions, for reasons which he explained to the Court, to seek to amend to plead that the conspirators' predominant purpose was to injure the Commissioners. The House is concerned with the other branch of conspiracy depending upon an intention (although not a predominant intention) to injure by unlawful means. The existence of unlawful means is therefore critical to the Commissioners' case. In agreement with the reasoning of Lord Walker and Lord Neuberger, I consider that the history and jurisprudence relating to this type of conspiracy point clearly to the conclusion that at least some criminal acts, not amounting to torts, may suffice to ground the tort. Lord Wright's speech in Crofter Hand Woven Harris Tweed Co. Ltd v. Veitch [1942] AC 435, cited by Lord Walker, contains particularly clear support for the view that this type of conspiracy is not to be regarded as a purely secondary form of liability, limited (apart from the possibility that the wrongful means might consist of breach of contract) to duplicating liability that the conspirators would anyway have as joint tortfeasors. The decision in Lonhro Ltd v. Shell Petroleum Co Ltd (No. 2) [1982] AC 173 proceeded, as explained in Lonhro plc v. Fayed [1992] 1 AC 448, on the basis that a purely criminal act, consisting of Shell's alleged breach of the United Kingdom's sanctions Orders making it a criminal offence to supply oil to Rhodesia, could constitute relevant unlawful means for the purposes of the tort of conspiracy by unlawful means. The conclusion that no tort had been committed derived from the absence - admitted by counsel for Lonhro plc (p.180B-C) - of any allegation of any intention at all to injure Lonhro plc. (It was also the fact that the sanctions Orders were "not passed for the protection of any particular section of the public and [gave] rise to no special duty to [Lonhro]": see the concession at p.179B-C.) In Lonhro plc v. Fayed at pages 467A to 468H Lord Bridge Harwich, giving the leading speech with which all other members of the House agreed, quoted extensively from the judgment of Lord Denning MR in the Court of Appeal as well as from Lord Diplock's speech in the House of Lords in Lonhro Ltd v. Shell Petroleum Co Ltd (No. 2) to show that what was fatal in the latter case had been the absence of any intent at all to injure; and on that basis he concluded that conspiracy by unlawful means, where there was an intention to injure the claimant, even if this was not the defendant's predominant intention, continued to exist as an English law tort. It is also worth noting that in Lonhro plc v. Fayed the unlawful means alleged consisted in misleading the board of directors of the House of Fraser and the Secretary of State, in other words of torts committed at most against third parties. Yet the House accepted that the claim for conspiracy by unlawful means was arguable. Liability in conspiracy has been described as an anomaly. But it is again to be noted that in Metall und Rohstoff AG v. Donaldson Lufkin & Jenrette Inc. [1990] 1 QB 391, the Court of Appeal at p.460C-D thought that to interpret Lonhro Ltd v. Shell Petroleum Co Ltd (No. 2) as preventing a plaintiff from relying on a damage-causing act which was merely a breach of the criminal law but gave no right of action in tort would be to treat the House as having intended to introduce a new anomaly. It would mean that "a cause of action in conspiracy would exist where it was least needed (i.e. where the acts done pursuant to the agreement were torts, which would in themselves provide a cause of action) but not where it was most needed….". The Court of Appeal's understanding of Lonhro Ltd v. Shell Petroleum Co Ltd (No. 2) in another respect (that on which its decision was overruled by Lonhro plc v. Fayed) does not detract from this observation. Caution is nonetheless necessary about the scope of the tort of conspiracy by unlawful means. Not every criminal act committed in order to injure can or should give rise to tortious liability to the person injured, even where the element of conspiracy is present. The pizza delivery business which obtains more custom, to the detriment of its competitors, because it instructs its drivers to ignore speed limits and jump red lights (Lord Walker in OBG Ltd. v. Allan [2007] UKHL 21; [2007] 2 WLR 920, para. 266) should not be liable, even if the claim be put as a claim in conspiracy involving its drivers and directors. And - as in relation to the tort of causing loss by unlawful means inflicted on a third party - there is a legitimate objection to making liability "depend upon whether the defendant has done something which is wrongful for reasons which have nothing to do with the damage inflicted on the claimant": per Lord Hoffmann in OBG Ltd. v. Allan at para. 59. But the same concern does not apply where, as here, the offence exists in its very nature to protect the Revenue; where its commission is necessarily, directly and intentionally targeted at and injurious to the Revenue; and where its intended result is the wrongful non-payment of VAT by Redlaw and Lockparts of statutorily recoverable VAT or the payment to Alldech of a VAT credit not properly due under the VAT Act 1994. Like others of your Lordships, I think that there would be an evident lacuna if the law did not respond to this situation by recognising a civil liability. It may be asked why the liability should only exist through the medium of a claim for unlawful means conspiracy, and not on the basis of the cheating alone. There is force in the point. It was not argued on this appeal that mere cheating of the Revenue would (without either conspiracy or the commission of another recognised tort such as deceit) give rise to liability in tort. But I would reserve my opinion about that. The assumption in the case-law recognising the common law offence of cheating the public revenue appears to have been that cheating would as between subject and subject be actionable (though actionable only) by civil action: see e.g. Rex v. Bainbridge (1783) 22 St. Tr. 1, 155 per Lord Mansfield CJ, cited in R v. Hudson [1956] 2 QB 252, 260, per Lord Goddard CJ (and 253, in counsel's argument). I note the observations of Sales and Stilitz in Intentional Infliction of Harm by Unlawful Means (1999) 115 LQR 411, at pp.420-425 as well as by Lord Hoffmann and Lord Nicholls of Birkenhead in OBG Ltd v. Allan at paras. 61 and 161 about the possibility of civil liability in the case of deliberate infliction of harm in "two-party" situations. In practical terms, however, the possibility of the point now arising in relation to cheating the public revenue must be negligible, having regard to the statutory scheme of civil liability arising under the VAT and other taxing statutes. The statutory scheme would in a two-party situation be likely to supersede any tortious liability: see further below. Assuming that cheating the public revenue is not, even apart from the statutory scheme of the VAT and other taxing statutes, itself tortious in the absence of some other recognised tort such as deceit, the fact of conspiracy in my opinion offers a sufficient justification for recognising tortious responsibility in the present context, as it does in cases of predominant purpose to injury. The present appeal illustrates the extent to which cheating the revenue is a crime likely to be facilitated by a combination of conspirators. A devious individual or entity might - possibly - achieve the same result by himself or itself, but would be a great deal less likely to try or succeed. Heavy reliance was placed by Total on OBG Ltd. v. Allan [2007] UKHL 21. In that case, the House considered and distinguished the accessory or secondary liability which exists under the principle in Lumley v. Gye (1853) 2 E & B 216, where C induces B to break B's contract with A, and the primary liability which exists under the tort of causing loss to a person (A) by unlawful means where C commits acts (including the threat to do acts) against B which are actionable by B or would be if B had suffered loss and which affect B's freedom to deal with A (see paras. 49, 51, 129 and 136, per Lord Hoffmann). The majority of the House in OBG held the actionability (or potential actionability) of C's acts against B to be a pre-requisite to A having a claim in tort against C for causing loss by unlawful means. The submission made to the House on this appeal is that the House should adopt the same view of unlawful means in the context of the tort of conspiracy to injure. The submission has on its face attraction, as I have myself said in Grupo Torras SA v Al-Sabah [1999] CLC 1469 (though in support of an analysis according to which actionability at the suit of the plaintiff was not necessary). But another view has been suggested at the highest level (Rookes v Barnard [1964] AC 1129, 1210-1211 per Lord Devlin), and, on reflection, there can be danger in what Lord Goff of Chieveley called "the temptation of elegance" (Henderson v. Merrett Syndicates Ltd [1995] 2 AC 145, 186B-C). The two torts are different in their nature, and the interests of justice may require their development on somewhat different bases. Lord Hope (in para. 43) and Lord Neuberger (in para. 223) note that Lord Hoffmann at para. 61 in OBG, in "defining the tort of causing loss by unlawful means as a tort which requires interference with the actions of a third party in relation to the plaintiff", made clear that "a case of 'two party intimidation' raises altogether different issues". In relation to the three-party tort of causing loss by unlawful means, Lord Hoffmann's criticism of the Court of Appeal's reasoning in OBG was that it first expanded the concept of "unlawful means", and then sought to counteract the width of the concept "by insisting upon a highly specific intention, which 'targets' the plaintiff"; this, he considered, "places too much strain on the concept of intention" (paras.60 and 135). That problem does not to my mind arise with anything like the same force in the present context. I accept that conspiracy can be categorised as a three- rather than two-party tort, in that liability depends on at least two persons joining together to injure another: see also Hazel Carty in An Analysis of the Economic Torts at e.g. pp.271 and 278. Nevertheless, there is in my view a distinction between the infliction of harm through the intermediary of a third party (as in the case of the tort of causing harm by unlawful means under consideration in OBG Ltd. v. Allan) and the present situation where two wrongdoers join and act together to inflict injury directly upon another person or body; and to do so, moreover, by committing an offence integrally related to the Revenue and recognised specifically to protect it from such injury. This in turn assists to delimit the liability for conspiracy by unlawful means which the House is recognising by its present decision. So far as the Commissioners' claim relates of the VAT credit paid to Alldech, I would only add that the Commissioners ought on any view to succeed on issue (b). It matters not if the Commissioners' only remedy to recover the VAT credit as against Alldech (as opposed to other conspirators responsible for the deceit) is under s.73(2) of the VAT Act 1994. The wrongful extraction of the money from the Commissioners by deceit involved unlawful means and a sufficiently actionable wrong to justify a civil claim in conspiracy. I would therefore answer affirmatively issue (b) identified in paragraph 112 above. This brings me to the issue on which my opinion proves critical to the outcome of this appeal. It is a curious feature that the appeal was in terms brought only on part (i) of issue (a), that is the Bill of Rights point. Part (ii), the inconsistent statutory scheme point, was taken below, but not in either the cross-notice of appeal or the statement of issues. Total's case only mentions the statutory scheme as a background factor to its submissions on issue (b) and to the Bill of Rights. Even during oral argument before the House, Mr Charles Flint QC for Total did no more than say that issue (a) could also be put on a pure "ultra vires/statutory" basis, but that article 4 of the Bill of Rights was how they had formulated it. However, as all aspects of issue (a) involve pure questions of law and raise questions of general importance, I agree that they need deciding. Lord Hope and Lord Neuberger have helpfully analysed the detailed provisions of the VAT Act 1994. The Act was of course passed in the context of the Sixth VAT Directive 77/388, but it has not been suggested by counsel that the Directive contains anything presently material. I agree with Lord Scott (para. 59) and Lord Neuberger (paras. 168-172) in rejecting Total's submission that the Commissioners' claim infringes article 4 of the Bill of Rights (issue (a) part (i)). For the reasons they give the Commissioners' claim is a damages claim for being wrongfully cheated of monies or revenue with the management or collection of which the Commissioners were entrusted, rather than a claim to levy money for or to the use of the Crown within the meaning of article 4. The Commissioners are claiming damages against a conspirator (Total) whose wrongdoing either prevented the recovery of tax which was due under Parliamentary authority (from Redlaw and Lockparts) or led to the Commissioners mistakenly paying (to Alldech) a VAT credit which was not due and which is in law recoverable under Parliamentary authority (from Alldech). In short, although the claim is against Total, it is a claim aimed at the recovery of damages to uphold, not to extend, the tax system. Such a claim is in my view outside the language and mischief of article 4. Article 4 aims to prevent the levying of taxation for which there is no Parliamentary authority, not the recovery of compensation for wrongdoing causing the loss of monies belonging or due to the Commissioners. The statutory scheme point (issue (a) part (ii)) is, self-evidently in view of the division in the House, more difficult. Lord Neuberger identifies and examines various aspects of the point: the Commissioners' functions, the remedial rights given to them and the procedural and other stipulations relating to such rights. Some of his reasoning in relation to the Commissioners' functions echoes Mr Flint's reference to vires. But for my part, I do not find vires a problem. First, no question of vires in a strict sense has ever been raised. The most that was argued below or touched on in the House is the suggestion that the statutory scheme excludes the ordinary common law rights that the Commissioners would otherwise have in respect of Total's alleged conduct. Second, the Commissioners had, in the language which applied until 2005, "the care and management" of VAT (sched. 11, para. 1(1) to the 1994 Act). They were charged with "the duty of collecting and accounting for, and otherwise managing, the revenues of customs and excise" (s. 6(2) of the Customs and Excise Management Act 1979). If, as their alternative case involves, their loss consists in paying out in respect of a false claim to a VAT credit, that involves loss of money under their direct management. Lord Neuberger accepts (at para. 184) that the Commissioners could bring tortious claims for theft of monies in their possession. Wrongful abstraction of monies as a result of a successful deceit or conspiracy seems no different in principle. And if, as their primary case involves, the Commissioners' loss is their inability, as a result of the conspiracy, to recover VAT due from the missing traders, the recovery of such loss seems to me also to fall within the scope of their competence. I see no reason why it should be outside the Commissioners' competence, if the statutory scheme otherwise permits, to take common law action in respect of a successful conspiracy which abstracts monies en route to the Commissioners or which prevents the Commissioners from recovering from others what is due from such others to the Commissioners. It is in my view neither wrong nor artificial to describe the Commissioners as having suffered loss or as seeking compensation, in whichever way their case is put; and I see no incongruity in their and the public's interests being in this respect protected by a common law action for conspiracy. Again, the claim is not for the VAT due or for repayment of the VAT credit, it is for damages in respect of loss suffered by the Commissioners due to a successful conspiracy to manipulate the VAT system. The decision in Inland Revenue Commissioners v. Goldblatt [1972] Ch 498 is in my opinion of interest, even though, and to some degree because it was taken for granted that the Commissioners were entitled to pursue private law remedies to recoup loss which they had suffered through the receivers' and/or debenture holder's failure to pay tax out of monies available for the purpose. Goff J accepted that the Commissioners could bring both a misfeasance claim for breach by a receiver and/or debenture holder of the statutory duty to pay the revenue preferentially (pp.505B-C, 506E and 506G-507C), and claim in equity on the footing of constructive trusteeship (pp.507G-508A). Goff J based his decision on each of these grounds, and the existence of the latter as well as the former appears to me to strengthen, rather than weaken, the significance of the case. A claim for breach of a statutory duty specifically designed to protect preferential creditors such as the Commissioners might be argued to fall into a different category to the Commissioners' present claim to invoke the common law tort of conspiracy. Nonetheless, a claim on this basis enables the Commissioners to recover compensation for wrongdoing causing a loss of tax due to them. In that respect, it mirrors the Commissioners' present claim. A claim in equity on the footing of constructive trust cannot on any view be distinguished as belonging to some special category associated with breach of statutory duty. The critical question, in my view, is whether the statutory scheme supersedes and displaces the common law rights and remedies which the Commissioners would otherwise have: see Deutsche Morgan Grenfell Group plc v. Inland Revenue Commissioners [2006] UKHL 49, [2007] 1 AC 558, per Lord Walker at para. 135. For this to be the case, it seems to me that the statute must positively be shown to be inconsistent with the continuation of the ordinary common law remedy otherwise available, and further that this must be shown to be the case as against the particular defendant. In support of the passage cited above, Lord Walker referred to two cases where an exclusive scheme would have been "set at nought" or "defeated" if a common law claim had been permitted. In Marcic v. Thames Water Utilities Ltd. [2003] UKHL 66; [2004] 2 AC 42, the statutory scheme for ensuring that water undertakers performed their statutory duties appropriately would have been set at nought if a common law claim for damages in nuisance had been possible; and in Autologic Holdings plc v. Inland Revenue Commissioners [2004] UKHL 54; [2006] 1 AC 118, the majority in this House held that, at least where the time limit for use of the statutory scheme had not expired, a taxpayer's only way of challenging a taxing provision as contrary to European law was by making use of the statutory tribunal scheme, as opposed to judicial review. In contrast, in Woolwich Equitable Building Society v. Inland Revenue Commissioners [1993] AC 70, also cited by Lord Walker, there had been no lawful assessment, it was not therefore possible to seek a remedy through the statutory scheme (which "where applicable, overlaid and replaced the common law principles") and so a common law claim for restitution could lie: per Lord Goff of Chieveley at pp.168G-170D, esp. at p.169H-170B. The case of Johnson v. Unisys Ltd. [2003] 1 AC 518 falls in my opinion into the same category. The claimant was contending for a common law remedy covering the same ground as the statutory right available to him under the Employment Rights Act 1996 through the Employment Tribunal system, and it was held that it would have been contrary to Parliament's intention to recognise such a remedy: per Lord Nicholls of Birkenhead at para. 2 and Lord Hoffmann at paras 58-59. As against any taxable person, including in the present case Redlaw, Lockparts and Alldech, the legislation provides direct remedies for the recovery of any VAT due as well as of any sums paid as a VAT credit which ought not to have been so paid: cf para. 5 of sched. 11 to the VAT Act 1994 and s.73(2). In each case, as I read the statute, the Commissioners could only pursue the person concerned in respect of VAT due from or a VAT credit paid to him, her or it. S.77A, introduced only with effect from 10th April 2003 by the Finance Act 2003 and so not applicable at the times relevant to this appeal, contains a major extension, by creating potentially joint and several liability for unpaid VAT on the part of any taxable person who, at the time a supply was made to such person, "knew or had reasonable grounds to suspect that some or all of the VAT payable in respect of that supply, or on any previous or subsequent supply of those goods, would go unpaid" (s.77A(2)). The permissibility and validity of that extension under article 21(3) of the Sixth Directive were upheld by the European Court of Justice in Commissioners of Customs and Excise v. Federation of Technological Industries Case C-384/04; [2006] 3 CMLR 11. But, even s.77A would not have created a liability for VAT on the part of Total, which was not a taxable person. The possibility that article 21(3) might have permitted the United Kingdom to go further than it did in s.77A, by imposing liability for VAT on an otherwise non-taxable overseas company such as Total, was not raised or explored before the House. It may be the case that this would not be possible. But, assuming for the moment that it would, it did not happen. Nothing in the language of article 21(3) of the Sixth Directive seems to me (or was suggested by Mr Flint QC before the House) to exclude, or preclude the pursuit by the Commissioners of, any ordinary civil remedy that would otherwise be available to them against a third party for tortiously causing the Commissioners a loss of VAT or a loss by way of payment of a VAT credit. In the light of the statutory scheme, I would accept as correct the Court of Appeal's answer to the third question before it, namely that the Commissioners cannot pursue an independent actionable remedy (outside the statute) against Alldech. But the issue on the present appeal is whether the Commissioners can pursue such a remedy against Total. It was not, as I understand it, suggested, nor would it in my view be correct to suggest, that the Commissioners' inability in law to pursue anything but a statutory remedies against Alldech (or any other of the United Kingdom companies in the chain) means that they cannot still pursue Total for the conspiracy to which it is alleged that all were in fact party. No statutory remedy to recover VAT or repayment of a VAT credit from Total has been identified as available to the Commissioners in this respect. Total happens to be a company in the chain of suppliers and purchasers involved in the present alleged "carousel" fraud, and it is its overseas status and the fact that it is not a taxable person that takes it outside the statutory scheme. But the claim for conspiracy does not depend upon its membership of the chain of suppliers and purchasers or its overseas status. It is quite possible to conceive of other conspirators here or abroad, including financial and legal advisers, involved in the conception, preparation and implementation of a carousel fraud, who would themselves have no liability under the statutory scheme for VAT or its repayment (except perhaps criminal liability under e.g. s.72, which I address below). It is, I think, on the statutory scheme of liability for VAT and the repayment of VAT paid that attention should primarily be focused when considering whether a separate common law claim for being cheated by a conspiracy out of VAT can be pursued. A penalty is a sanction, and differs in nature from compensation for loss. But, when one does look at the penalty provisions which the VAT Act 1994 also contains, they also do not apply to Total. S.60 in particular is, as I read it, concerned with evasion of VAT by the person liable to the VAT or claiming a credit or refund. S.61 provides a minor qualification to this, by allowing a penalty to be imposed on a director or managing officer of a body corporate liable to a penalty under s.60. Neither the liability for VAT which the VAT Act 1994 imposes on taxable and some other persons, nor the potential liability to a penalty or criminal offences which it also imposes on certain persons, including some who are not themselves taxable persons under the Act, seem to me reasons for treating the Act as excluding or precluding the exercise of ordinary civil remedies against non-taxable persons like Total against whom the Act provides no parallel statutory remedy. S.72 of the VAT Act 1994 creates a criminal offence of considerable width, which may lead to a court ordering a penalty of up to three times the VAT evaded and/or imprisonment. In so far as the evasion of VAT - which Total in combination with other companies is alleged to have been concerned in or to have taken steps with a view to - took place in England, it is arguable, and I am ready for present purposes to assume, that the principle of territoriality of criminal legislation would not preclude the application of s.72 to Total. But s.72 is capable of co-existing with the common law offence of cheating the revenue (cf R v. Mavji cited in para. 113 above), and I see nothing in the existence of either of these criminal offences to exclude or preclude the use of ordinary civil law remedies, if otherwise available. The practicalities, the ease of pursuit, the aims and results and the enforcement of civil and criminal proceedings all differ radically. There are under the VAT Act 1994 provisions whereby a conviction under s.72 or for cheating the revenue will preclude the assessment of a penalty under s.60 or s.63 (see s.60(6) and s.63(11)(a)), and the assessment of a penalty under s.60 will preclude the assessment of a penalty under s.63 (see s.63(11)(b)). But I see no inconsistency or even incongruity in it being possible, despite the conviction of one conspirator under s.72, to pursue a common law remedy in tort against another conspirator. I do not think that the conspirator who has been convicted can be regarded as having escaped liability. The likelihood is, if anything, that s/he will suffer a considerably heavier penalty, including it may well be a financial penalty in excess of any loss that the Revenue could claim to have suffered in civil proceedings. It is of course the case that, if a common law claim against Total is possible, it will be pursued through the courts, and the statutory rules, procedures and mechanisms relating to such matters as limitation, appeals against assessments and mitigation of penalties will not apply. But, as I have already noted, the Commissioners might have a claim for conspiracy against persons such as financial and legal advisers, against whom the statutory scheme could not afford any right to recover the VAT or VAT repayment in issue. If such persons have by a successful conspiracy caused the Commissioners to pay out a false VAT credit to other conspirators, is it to be said that the statute precludes any civil claim against them? Further, it is of the essence of any such civil claim that it is brought to recoup any loss that the Commissioners may ultimately suffer after all statutory remedies reasonably available have been exhausted. The Commissioners have to mitigate their loss by taking reasonable steps in that regard. A court assessing damages will have to take into account the Commissioners' statutory rights and, so far as they have not been exhausted and enforced, make an assessment as to their value. That is a different exercise from any which a tax tribunal will have to undertake. Parallel, though different, exercises of this nature have not infrequently to take place in various legal contexts, where all connected proceedings cannot be combined, and I do not see their possibility as any indication that the statutory scheme should be treated as precluding the Commissioners' claiming damages for conspiracy at common law. The possibility under s.70(1) of a tax tribunal reducing a penalty imposed under the statute (though not by reference to any of the matters specified in s.70(4)) appears to me irrelevant. As I have already said, the sanction of a penalty is conceptually distinct from the compensation afforded by a common law claim for damages. There is no call or basis in the case of a common law claim for reducing whatever the court may find to be the properly recoverable loss suffered by a claimant. For these reasons, I would, in common with Lords Scott and Walker, answer issue (a)(ii) in the Commissioners' favour, by holding that there is nothing in the statutory scheme to preclude the Commissioners' pursuit of a common law claim for conspiracy against Total. It follows that I would allow the Commissioners' appeal on issue (b) and hold that the Commissioners' common law conspiracy claim based on unlawful means can as pleaded exist in law, while I would dismiss Total's cross-appeal on issue (a) and hold that the pursuit of such a claim is not precluded by either the Bill of Rights or the statutory scheme of the Value Added Tax Act 1994. LORD NEUBERGER OF ABBOTSBURY My Lords, Introductory The Commissioners' pleaded case raises a claim for damages against Total based on the tort of conspiracy. The core allegation is that Total was party to a so-called carousel fraud, which resulted in the Commissioners not recovering VAT which they should have recovered, or paying an alleged VAT credit which they should not have paid. The preliminary issue to be determined is whether the Commissioners "have, as a matter of law, a cause of action" against Total "as pleaded in [their] Consolidated and Amended Particulars of Claim". The preliminary issue proceeds on the assumption that the Commissioners will make out the factual allegations which they have pleaded. These allegations have been very clearly set out and explained by my noble and learned friends, Lord Hope of Craighead, and Lord Scott of Foscote, in paras 3 to 10 and paras 49 and 51 of their respective opinions, which I have had the privilege of seeing in draft. The Commissioners put their case on conspiracy on two bases. The first involves accepting the carousel transactions, as summarised by Lord Hope in para 7 and by Lord Scott in para 51, as effective for VAT purposes, on the ground that each transaction constituted an economic activity within the meaning of article 4(2) of the Sixth Directive (77/388/EEC). On this basis, the loss suffered by the Commissioners is the output tax that ought to have been paid by Redlaw, but was not. The second basis involves treating the carousel transactions as deceitful shams falling outside the ambit of article 4(2) of the Sixth Directive. On this basis, the Commissioners' loss arises from the credit claimed by and accorded to Alldech in respect of input tax, which was paid by the Commissioners. As a result of the arguments which have been advanced before your Lordships, it seems to me that the issues which need to be resolved are as follows: a.  Whether, even if otherwise justified, the Commissioners' claim based on conspiracy must fail because: i.  The claim falls foul of Article 4 of the Bill of Rights 1688 ("the Bill of Rights issue"); ii.  The Value Added Tax Act 1994 constitutes a regime which excludes the claim ("the complete code issue"); b.  Whether the claim cannot in any event be made out on the Commissioners' pleaded case ("the conspiracy tort issue"). I set out the issues in this way, because it appears to me that the Bill of Rights issue and the complete code issue are to some extent connected. The conspiracy tort issue involves a rather different argument, which, if successful, may have the same effect. Before considering those three issues, which raise points of difficulty and significance, it is convenient briefly (a) to summarise the relevant provisions of the Value Added Tax Act 1994 ("the 1994 Act"), as they play such a crucial part in the arguments on the first two issues, and (b) to consider the viability of the Commissioners' two ways of putting their case in the light of the Sixth Directive, which is, of course, the overarching legislative code relating to VAT. All references to sections and schedules hereafter are to those of the 1994 Act unless the contrary is stated. The Value Added Tax Act 1994 Part I of the 1994 Act is concerned with the "Charge to Tax" and it identifies the items upon which tax is chargeable, the persons who are chargeable, and when they are chargeable. Section 24(1) defines "input tax" as VAT on the supply to a taxpayer of goods or services or on the acquisition by him of goods from another member state. Section 24(2) defines "output tax" as VAT on the supply by a taxpayer of goods and services or on the acquisition by him of goods from another member state. Section 25(1) effectively requires a taxable person to account for and pay output tax by reference to "accounting periods", in accordance with regulations. Sections 25(2) and 26 entitle a taxable person to credit for input tax, again in accordance with regulations. Those regulations enable a taxpayer whose input tax exceeds his output tax to recover the difference from the Commissioners. Part II of the 1994 Act, which deals with "Reliefs, Exemptions and Repayments", and Part III, which is concerned with "Application of [the 1994 Act] in Particular Cases", are not relevant for the purposes of this appeal. Part IV of the 1994 Act is entitled "Administration, Collection and Enforcement" and is of significance in the present context. Section 58 provides that schedule 11 shall have effect "with respect to the administration, collection and enforcement of VAT". The functions of the Commissioners are defined in para 1 of schedule 11. Until 2005, this provided that VAT should be "under the care and management of the Commissioners". This was amplified by section 6(2) of the Customs and Excise Management 1979 ("the 1979 Act") which charged the Commissioners with "the duty of collecting and accounting for, and otherwise managing, the revenues of customs and excise". (In 2005, section 6 of the 1979 Act was repealed by the Commissioners for Revenue and Customs Act 2005 ("the 2005 Act"), and para 1 of schedule 11 was amended so that it states that the Commissioners are "responsible for the collection and management of VAT".) Paras 2 to 4 of schedule 11 concern procedures for accounting for and paying VAT. They include obligations to register for VAT and to make periodic returns, and to pay VAT, by certain dates. Para 5(1) provides that "VAT due from any person shall be recoverable as a debt due to the Crown", and it has further provisions dealing with the recovery of VAT. Paras 6 to 13 are concerned with taxpayers' duties to keep records and the like, and the Commissioner's powers to inspect etc. Section 59(1) makes provision for a default surcharge where a taxable person fails to make a return on time or to pay tax on time. The amount is specified in subsections (4) to (6) and is calculated by reference to the amount of the outstanding VAT. By subsection (7), no surcharge is payable if the person concerned satisfies the Commissioners "or, on appeal, a tribunal" either that the return or VAT was despatched in time or that he had "a reasonable excuse". By subsection (9), any penalty under section 69 for the same default is to be credited against any section 59 liability. Section 60 (1) provides: "In any case where- (a) for the purpose of evading VAT, a person does any act or omits to take any action, and (b) his conduct involves dishonesty (whether or not it is such as to give rise to criminal liability), he shall be liable, subject to subsection (6) below, to a penalty equal to the amount of VAT evaded or, as the case may be, sought to be evaded, by his conduct". Section 60(2) gives an extended meaning to "evading VAT", so that it includes "obtaining…a VAT credit…in circumstances where the person concerned is not entitled to that sum", and section 60(3)(a) states that a "VAT credit" extends to an amount "falsely claimed by way of credit for input tax". Section 60(6) excludes the application of section 60(1) where "by reason of conduct falling within subsection (1) above, a person is convicted of an offence". (It has not been suggested that section 60(1) can be relied on by the Commissioners against a person, such as Total, who was not liable for the VAT evaded or sought to be evaded. As a matter of language, there may be an argument for saying that section 60(1) is capable of bearing such a meaning, although, apart from anything else, the way in which subsection (2) is worded may well call the argument into question. In any event, for present purposes, one must proceed on the common assumption of the parties, which I am inclined to think is right, namely that the section cannot be relied on by the Commissioners against Total.) Section 61 states that, where Section 60 applies and the person concerned is a company, its directors can, in some circumstances, be liable for the penalty. Section 62 provides for a penalty where a person gives an invalid certificate in relation to zero rating, Section 63(1) provides for a penalty (in addition to the VAT recoverable) where a person's VAT return contains a "mis-declaration" - i.e. it understates his liability for VAT or overstates his entitlement to a VAT credit in a single accounting period, in excess of an amount specified in succeeding subsections. Section 63(10) provides that such a penalty can be avoided if "there is a reasonable excuse" for the mis-declaration. Section 63 is disapplied by subsection (11) where the person concerned is penalised under section 60, or convicted, in respect of the mis-declaration. Section 64(1) provides for a penalty, specified in subsection (3) for "repeated mis-declarations", and, like section 63, it is disapplied where the mis-declarations have been the subject of a section 60 penalty or a criminal conviction - see section 64(6). Section 65 to 69 also provide for specified penalties for various other defaults, including (in sections 65 and 66) failure to comply with rules relating to EC sales statements, (in section 67) failure to register for VAT or to comply with the rules relating to invoices, and (in section 69) failure to comply with various other regulatory provisions in the 1994 Act. They include exoneration provisions if the person concerned satisfies "the Commissioners or, on appeal, a tribunal that there is a reasonable excuse" for the default, and disapplication provisions if a penalty has been exacted under other sections (e.g. section 60) or there has been a criminal conviction (see for instance subsections (8) and (9) of section 69). Section 70 entitles the Commissioners or, on appeal, the VAT Tribunal, to mitigate any penalty levied under sections 60, 63, 64 or 67. However the grounds set out in section 70(4) are specifically excluded from being taken into account. Those grounds include (a) "the insufficiency of…funds available", (b) "in the case in question or in that case taken with any other cases…no significant loss of VAT", and (c) the person liable for the penalty "has acted in good faith". Section 72 (1) is in these terms: "If any person is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of VAT by him or any other person, he shall be liable- (a) on summary conviction, to a penalty of the statutory maximum or of three times the amount of the VAT, whichever is greater, or to imprisonment for a term not exceeding 6 months or to both; or (b) on conviction on indictment, to a penalty of any amount or to imprisonment for a term not exceeding 7 years or to both." Section 72 (2) gives a wide meaning to "evasion of VAT", and it includes, in para (a), "the obtaining of ... the payment of a VAT credit", and the reference to VAT credit is extended by subpara (i) to an "amount (if any) falsely claimed by way of credit for input tax". Subsections (8) and (10) of section 72 create further offences, in connection with the production of false documents, and dealings with goods and services upon which VAT was evaded; conviction of such offences can give rise to substantial fines as well as imprisonment. Section 73(1) empowers the Commissioners to make assessments for VAT where a person makes no or "incomplete or inaccurate" returns or fails to maintain satisfactory records. Section 73(2) enables the Commissioners to assess a person who transpires to have wrongly received a refund of VAT or a VAT credit. Section 73(6) imposes a time limit of two years (or, if later, one year after sufficient facts come to the attention of the Commissioners) for such assessments. Section 73(7B), added in 1996, enables the Commissioners to assess a person who removed goods, on which VAT had not been paid, from certain types of warehouse. Section 74 entitles the Commissioners to interest on sums recovered under section 73, and it is normally subject to a three-year maximum. Section 75(1) enables the Commissioners to assess "a person who…was not a taxable person" for VAT in cases involving the import of certain classes of goods from other member states. Subsection (2) imposes similar time limits to those in section 73(6). Section 76 enables the Commissioners to make assessments of amounts due, where a person is liable for a surcharge under section 59, for a penalty under sections 60 to 69, or for interest under section 74. Section 77 provides for certain time limits within which the Commissioners have to bring claims and make assessments. The period in question is normally three years (although it is sometimes two years) in relation to assessments under sections 73 and 76, but, where the assessment is based on section 60(1), or is made in circumstances where section 67 applies, the period is twenty years. Section 80 enables overpayments of VAT to be recovered from the Commissioners by a taxpayer, albeit usually subject to a limitation period of six years. Section 77A was introduced by the Finance Act 2003, and was therefore not in force when the events in this case occurred. It applies where, at the time of a taxable supply of telecommunication goods, the taxable person to whom the supply was made "knew or had reasonable grounds to suspect" that VAT would go unpaid on that supply "or on any previous or subsequent supply of those goods". It enables the Commissioners to recover such unpaid VAT from that person notwithstanding the fact that he would not otherwise be liable. The section appears to have been specifically designed to ensure that, in the case of a carousel fraud, the Commissioners could recover any VAT not just from the person who would normally be liable, but from many of the other parties involved in transactions in the carousel. However, as my noble and learned friend Lord Mance points out, it would appear that the new section would not catch a party such as Total. Part V of the 1994 Act is concerned with "Appeals". Section 82 incorporates Schedule 12, which establishes and sets out the procedures of VAT Tribunals. Under para 9, the Lord Chancellor is empowered to make rules including provisions "(a) for limiting the time within which appeals may be brought" and for other purposes. Section 83 sets out a list of over thirty different types of matter on which an appeal lies to such a tribunal. They include in paragraph (n) "any liability to a penalty or surcharge by virtue of any of sections 59 to 69A" and any assessments or penalties under sections 73, 75, 76 or 77. The Commissioners' case and the Sixth Directive As I have mentioned, the Commissioners have pleaded and argued their case on two alternative bases, which I have summarised in para [142] above. On the first basis, the Commissioners allege no tort other than the conspiracy involving Total, Redlaw, and Alldech (and, quite possibly, some or all of the other parties to the carousel transactions). The second basis additionally involves an allegation of deceit, most specifically on the part of Alldech when it claimed the VAT credit from the Commissioners. The way the Commissioners put this point is that, by claiming a VAT credit from the Commissioners, Alldech deceitfully, if impliedly, represented that the transactions to which it was party had a genuine economic purpose. In their written cases, the parties did not give much consideration to the viability of these two ways of putting the Commissioners' case in the light of the provisions of the Sixth Directive. And they gave even less consideration to that aspect in their oral submissions. In view of the difficulties thrown up by the three points on which the preliminary issue was treated as focussing, and the time available for the hearing, this is scarcely surprising, and is not meant as a criticism. However, it does seem to me that this aspect requires some discussion, albeit of a limited nature, given that domestic courts should not proceed on a basis which conflicts with the provisions of the Sixth Directive. In this connection, it is necessary to consider the decision of the European Court of Justice in Optigen Ltd v Customs and Excise Commissioners [2006] Ch 218. The effect of that decision was that the fact that a transaction was a step in a carousel fraud did not prevent an innocent party to the transaction contending that it constituted a supply and a genuine economic activity, so that it was within the ambit of the Sixth Directive and subject to the VAT regime. In the light of the remarks of the ECJ in paras 46 and 51 (quoted by Lord Scott in para 55 of his opinion), it seems to me that the reasoning and conclusion in Optigen may very well only apply to traders in a carousel fraud who are innocent of any involvement in the fraud, as was assumed in relation to the traders in that case. Further, it may be difficult to reconcile the suggestion that the reasoning in Optigen applies to parties to the fraud with the conclusion reached by the ECJ in a case decided a month later, Halifax plc v Customs and Excise Commissioners [2006] Ch 387. If, as was held in that latter case, the steps in an honest but "abusive" scheme designed to avoid VAT should be "redefined" in relation to the parties to the scheme so that VAT is not avoided, it is not easy to see why each step in a dishonest and "abusive" scheme designed to evade VAT should be treated, in effect, as genuine and effective in relation to the parties to the dishonesty. In my opinion, it is therefore well arguable that each of the two ways in which the Commissioners seek to put their case against Total is consistent with the Sixth Directive. So far as the first basis is concerned, the assumption that the transactions constituting the carousel fraud in the present case are similarly effective for VAT purposes, even in relation to a party to the fraud, such as Total, may well be right (and, indeed, it appears to have been assumed by the legislature when enacting section 77A). However, that conclusion does not necessarily follow from Optigen, as already explained. Even if the transactions could be treated as a sham, which is the assumption made by the second basis, it seems to me that, at least as a matter of domestic law, it is open to a victim of the sham transaction to treat the transaction as genuine if he wishes to do so. The parties to a sham transaction must, I would have thought, be estopped from raising the argument that it was a sham, at the very least where, as here, the person seeking to treat the transaction as genuine has suffered loss in the belief that it was genuine. Nonetheless, it may conceivably be the case that such an estoppel argument could not be relied on under the Sixth Directive as interpreted by the ECJ. As to the second basis, it appears to me likely, at least in the absence of compelling authority to the contrary, that, if a transaction in a carousel fraud involves a party to the fraud, it should be possible to allege against him that the transaction is a sham not merely for domestic law purposes but for VAT purposes as well. A carousel transaction is not so much one of a pre-ordained set of transactions: it is, in reality, not a transaction at all. It is merely a chimera which is used as an excuse or a front to justify the creation of one of several purported invoices, which are brought into existence by the parties to the fraud to obtain money dishonestly from the Commissioners. However, whether that argument is correct in the light of the Sixth Directive is not entirely clear, in the light of the reasoning in Optigen (and see especially the reasoning of the Advocate-General at para 28 of his opinion). For the reasons I have given, at least on the basis of the arguments that have been put before your Lordships' House, I would not regard it as clear that both the ways in which the Commissioners put their case would withstand scrutiny under Community law. However, it may very well be that they both would withstand such scrutiny, and, as at present advised, I think that at least one of them must do so. I do not regard it as necessary to consider the question further, at least at this stage. Your Lordships are only concerned with a preliminary point, which throws up the three issues identified above, and, in view of the analysis just undertaken, I am prepared to proceed for that purpose on the basis that each of the two ways in which the Commissioners put their case is strongly arguable as a matter of Community law. The Bill of Rights issue: is the claim barred by the Bill of Rights? Article 4 of the Bill of Rights 1688 renders "illegal", "levying money for or to the use of the Crown", if it is "by pretence of prerogative, without grant of Parliament". It appears to me that, in order to decide whether this provision bars the present claim, it is necessary to identify the proper characterisation of the Commissioners' claim. In particular, is their claim for damages in tort, or for recovery of tax, or indeed should it be characterised in some other way? In my judgment, the claim is not for recovery of tax, but for damages in tort. It is quite clear that the Commissioners' case is pleaded, and has been argued throughout, solely in tort, as explained by Lord Hope in paragraphs 7 to 10 of his opinion. The Commissioners accept that Total is not liable for any VAT (whether by way of payment or repayment of tax or penalty) under the 1994 Act, insofar as it was in force at the time relevant for the purpose of these proceedings: hence the complete code issue. Indeed, they go further, and accept that, in order to succeed, they have to establish that a claim in common law is made out: hence the conspiracy tort issue. Further, as my noble and learned friend Lord Scott has explained in para 59 of his opinion, the amount which the Commissioners would recover in these proceedings by way of damages would not necessarily be the same as the amount of tax out of which the Commissioners were cheated. The amount of output tax which should have been paid by Redlaw or, on the Commissioners' alternative case, the amount that they wrongly paid to Alldech is not necessarily the same as their recoverable damages in tort. Unlike any tax so payable, the award of damages in tort would, of course, have to give credit for any VAT which had been paid to the Commissioners in the context of the totality of the transactions involved in the carousel fraud: such VAT would not have been paid if there had been no such fraud. Once one concludes that the claim which the Commissioners make is for damages in tort, it seems to me, in agreement with the Court of Appeal, that the basis of Total's case on the Bill of Rights issue falls away. While the claim for damages may be assailable on one of the other two grounds which have been raised on this appeal, I am of the view that a genuine claim for damages in tort does not fall within either the spirit or the literal meaning of the words of Article 4 of the Bill of Rights. Seeking damages under a claim which is made pursuant to a properly established common law ground does not fall within the expression 'levying money' within the meaning of the Article, which, in my view, is directed to claims which would have no other legal basis than the fact that they are made by or on behalf of the Crown. That point is, I think, made clear by the words "by pretence of prerogative" in the Article. Looking at the realities of the early twenty-first century, as opposed to those of the late seventeenth century, the effect of the Article is that the executive cannot impose or claim a tax or other imposition without the authority of the legislature. If the Crown has suffered a wrong which, in common law, would give it the right to claim damages, Article 4 of the Bill of Rights would not serve to prevent the Crown from raising a claim. If the Crown were to sue in debt for a sum due under an agreement or for damages for breach of an agreement, there would similarly be no 'levying [of] money', and no "pretence [or invocation] of prerogative", because the juridical basis for the Crown's claim would be an established legal right in contract, such as that enjoyed by any other individual or entity. So, too, if money were stolen from the Crown, it could maintain a claim for recovery or damages: again, there would be no "levying" or reliance on the prerogative: the claim would be based on an established legal right in tort. I should add that, if Article 4 of the Bill of Rights had otherwise applied, I would have unhesitatingly agreed with Lord Hope and disagreed with the Court of Appeal on the issue of whether it would have been open to Total to invoke the Article. Far from it being "a mockery of the law" for Total "as a fraudster" to invoke the Article, as the Court of Appeal suggested, it seems to me that such a statutorily enshrined unqualified fundamental right, intended to curb the powers of the Crown (and the executive), exists for the benefit of everyone. Indeed, it is when the unmeritorious seek to rely on such a right that it truly comes into its own and is properly put to the test. Outlawry, which is what the reasoning of the Court of Appeal appears to me to involve, may have existed in the past, but the concept has long ceased to be recognised by the law. As it is, however, it seems to me that this case is simply not within the territory of Article 4 of the Bill of Rights. The complete code issue: Does the 1994 Act preclude the claim? That, then, leads to the question whether a common law claim, such as that sought to be raised by the Commissioners in the present case, is precluded by the 1994 Act, and in particular its provisions relating to the functions of the Commissioners, the recovery of VAT and other sums, and procedures and the like. The issue is not dissimilar from that in Deutsche Morgan Grenfell Group plc v Inland Revenue Commissioners [2007] 1 AC 558, to which your Lordships were referred and in which my noble and learned friend Lord Walker of Gestingthorpe said this at para 135: "When Parliament enacts a special regime providing special rights and remedies, that regime may (but does not always) supersede and displace common law rights and remedies (or more general statutory rights and remedies). Whether it has that effect is a question of statutory construction…." (A comparable point in relation to equitable rights was made by Lord Wilberforce in Shiloh Spinners Ltd v Harding [1973] AC 691 at 724G to 725C). In other words, one is seeking to discern from the terms of the legislation concerned whether the legislature intended a common law claim to be displaced by the Statute, as in Deutsche or to exist outside the Statute, as in this case. It is convenient initially to consider this issue separately in relation to the two alternative bases upon which the Commissioners put their case. The first is that each of the transactions in the carousel should be taken as genuine for VAT purposes, so that the payment by the Commissioners to Alldech was a proper credit of input tax. On that basis, the Commissioners contend that the conspiracy deprived them of the receipt of output tax due from Redlaw. The alternative basis is that the whole set of alleged transactions was a fraud and a deceit on the Commissioners, in which case the conspiracy resulted in Alldech being wrongly credited with, and paid, input tax by the Commissioners. The claim based on unpaid output tax: general Does the 1994 Act constitute a "complete code" which excludes the Commissioners from raising claims for damages based on unlawful means conspiracy (which would otherwise be well-founded) in respect of any tax which should have been, but was not, paid to them? The reasoning of Lord Walker, Lord Scott, and Lord Mance (whose draft opinions I have had the benefit of seeing) as to why the Commissioners are entitled to maintain a common law claim in tort is powerful, and has resulted in even greater diffidence than I had already felt about reaching a conclusion to the contrary effect. Nonetheless, in agreement with Lord Hope, I am of the view that the statutory scheme of the 1994 Act precludes the Commissioners from pursuing a common law claim for non-payment of VAT which they should have recovered. In other words I consider that not only the Commissioners' right to recover VAT, but also their right to recover compensation for not recovering, or for wrongly being induced to pay, VAT, are exclusively governed by the 1994 Act, and that it is thus not open to them to raise claims outside that Act to recover damages for loss of tax which they should have recovered or which they should not have paid. Three aspects of the 1994 Act are relevant in this connection: the functions of the Commissioners, the remedial rights given to the Commissioners, and the procedural and similar stipulations relating to such rights. The claim based on unpaid output tax: the Commissioners' functions The contents of para 1 of schedule 11 changed in 2005, and, although it makes no difference to my conclusion, the relevant provisions are, in my view, those in force when the tax was lost and when these proceedings were issued. The fact that VAT was to be "under the care and management of the Commissioners" does not, as a matter of ordinary language, appear to me to carry with it a right to pursue a common law claim for damages, based on the contention that tax has been wrongly not paid to them or which has been wrongly paid by them, against someone who is not liable for VAT or any other sum under the 1994 Act. Nor can it be fairly claimed, in my opinion, that the pursuit of such a claim is within the ambit of the duty in the 1979 Act to "collect", "account for" or "manage" the customs and excise revenues. In these proceedings, the Commissioners are claiming neither VAT nor a penalty or similar sum under the 1994 Act, as is emphasised by their successful rebuttal of Total's argument based on Article 4 of the Bill of Rights. The Commissioners, an arm of the executive, appear to have suffered no loss if VAT which ought to have been paid or recovered is not paid or recovered: they have merely collected less tax then the 1994 Act intended. In this connection, para 1-39 of Clerk and Lindsell on Torts (19th Edition) starts with the proposition that: "the primary function of the law of tort remains to protect private rights and private interests". The exceptions that it then considers constitute breaches of public rights, which can give rise to claims by private persons who suffer particular damage. I consider that this reinforces the view that an action which results in non-payment of tax due under a statute should not amount to a tort actionable at the suit of the Commissioners. In another leading textbook, McGregor on Damages (17th Edition), it is stated at para 1-021 that "the object of an award of damages is to give the claimant compensation for the damage, loss or injury he has suffered". At least on the face of it, it is difficult to say that the Commissioners have suffered loss or damage simply because tax which they ought to have been entitled to collect is not capable of collection or because they have paid tax they ought not to have paid. The answer to that point might lie in para 5(1) of schedule 11, which specifically empowers the Commissioners to recover VAT payable under the 1994 Act as a debt due to the Crown. However, that appears to me to be directed to identifying how the tax is to be juridically characterised for the purpose of legal proceedings. Indeed, the paragraph gives some indirect support for the conclusion that there is no room for a tortious claim such as that raised in the present case. If the Commissioners were entitled to maintain a claim in tort arising out of non-payment of VAT, their right to claim VAT due under the 1994 Act as a debt would be a fortiori, and there would be no need for such a right to be expressly conferred. I would add that para 5(1) cannot have been inserted to defeat any argument based on Article 4 of the Bill of Rights, as the right to "levy" VAT is clear from other provisions of the 1994 Act, especially elsewhere in schedule 11. Mention has been made of sections 5, 9, and 25 of the 2005 Act. They did not come into force until 2005, and I therefore do not think that they could be relied on in this case, where the alleged tort occurred in 2002 and the proceedings were started in 2003. In any event, they would not cause me to change my view. Section 5 of the 2005 Act takes matters no further. Section 9 of the 2005 Act gives the Commissioners power to do things which are "necessary or expedient" for, or "incidental or conducive to", the exercise of their functions. These are general words, which are all contingent on their existing functions (i.e. the recovery of VAT and other sums statutorily levied on persons statutorily designated as liable), and cannot, to my mind, possibly extend the nature of the Commissioners' powers to enable them to bring a common law claim against someone not liable for tax or other payment under the 1994 Act. Section 25 of the 2005 Act is only concerned with rights of audience. It is true, as Lord Walker has pointed out, that the Commissioners seek freezing orders and present winding-up petitions against defaulting taxpayers. However, it seems to me that such applications or petitions can fairly and properly be said to fall within the ambit of their statutory function of "collect[ing]" VAT as a "debt", and are now plainly within the powers given to the Commissioners by section 9 of the 2005 Act. I cannot agree that the fact they bring such proceedings with a view to recovering what is undoubtedly VAT (or other sums due under the 1994 Act), from someone who is undoubtedly liable under the terms of the 1994 Act, assists the Commissioners' argument that they can bring proceedings for damages in tort against someone who is not a taxable person or otherwise liable under the 1994 Act. The successful claim for misfeasance by the Commissioners, as preferential creditors, against the receiver, and the debenture holder to whom he had wrongly paid out money, in Inland Revenue Commissioners v Goldblatt [1972] Ch 498 appears at first sight to present greater difficulties. However (although Goff J said at 509B that counsel for the defendants "took every point that could possibly be taken") the contention that the IRC had no power to bring the claim for misfeasance was not run - see at 501C to 502D. In any event, even if the point had been taken, the claim would, I think, still have succeeded, on the basis that the money paid by the receiver to the debenture holder was impressed with a trust for the payment of the tax -see at 507G to 508A. It is also true that the Commissioners could bring claims in tort in some circumstances; for instance, if cash belonging to them was stolen from a vehicle. However, that would be a claim for money which was their property in their possession, albeit money representing what had been paid as tax. Such a claim would be covered by the passage quoted above from Clerk & Lindsell, as it would be a private law claim, albeit by a public body. Such examples do not, to my mind, assist on the issue whether the statutory scheme under the 1994 Act permits extra-statutory common law claims by the Commissioners to recover damages for not having recovered tax which should have been paid to them. The claim based on unpaid output tax: statutory claims and remedies The second relevant group of provisions in the 1994 Act are sections 59 to 69, 72 and 73, which, when taken together, have a long and broad reach. It is important in the present context to note that those provisions extend (a) to many more payments than of the simple VAT which is described in sections 24 to 26, and (b) to persons other than the primarily taxable person under those three sections. Thus, the 1994 Act deals with recovery of other payments (such as surcharges, penalties and assessments) effectively compensating for failure to pay VAT or to comply with other statutory requirements, where the non-payment, or non-compliance, has occurred through dishonesty, recklessness negligence or mistake. It is hard to believe that a common law right to claim for such failures should co-exist with those statutory rights. The legislation also often extends the Commissioners' rights of recovery of such sums from the person responsible for paying the tax to others who are involved with the failure. Examples where others are rendered liable include sections 61, 72, 73(7B) and 75; many aspects of sections 65 to 69 also appear to me to be capable of extending to those who are not taxable persons. Again, it seems to me unlikely that the legislature envisaged common law claims being brought against such persons in addition to claims under the 1994 Act. Further, a section 60(1) claim is excluded by section 60(6) where there has been a conviction, and many of the succeeding sections are expressly disapplied where section 60 has been successfully invoked or where there has been a criminal conviction. It cannot have been intended that the Commissioners could get round such exclusions, in cases where there had been criminal convictions, by bringing common law claims based on the defaults covered by those sections. An answer to these points might be that common law claims can only be brought where the statute does not provide a remedy. I am unimpressed with that argument for two reasons. First, and more generally, it strikes me as unconvincing and unattractive that the common law should be invoked to "fill in the gaps" in a taxing statute in favour of the Crown, by providing remedies for non-compliance, where the statute has many provisions which clearly provide such remedies. Secondly, and more particularly, it seems unlikely that it can have been intended that the principal wrongdoer, if convicted (e.g. under section 72, or of cheating the Revenue), can escape liability, whereas a person jointly liable with him, who has similarly been convicted, should not. It also seems unlikely that the principal wrongdoer could only be liable under section 60, while his fellow wrongdoers could only be liable in tort. The claim based on unpaid output tax: procedure and mitigation The third strand of relevant statutory provisions are those relating to assessment, appeal, interest, limitation, and mitigation. If common law, as well as statutory, claims could be brought, these provisions serve to emphasise the curious differences which would arise between the two types of case. In my judgment, the differences become positively capricious once one considers a case of conspirators or other joint wrongdoers, some of whom are within the ambit of the statutory code and others of whom are not. The assessment provisions in sections 75 and 76, which enable the Commissioners to determine the surcharges, penalties and interest for which a person is statutorily liable under the preceding sections, would not apply in relation to common law damages, which would have to be assessed by the court. Nor would the procedural provisions of those sections apply to common law claims brought by the Commissioners. This would be particularly odd if one conspirator was liable statutorily (e.g. Redlaw under section 60) and the co-conspirators (e.g. Total) were liable at common law. The statutory appeal provisions in schedule 12 to the 1994 Act are designed to provide an exclusive set of routes and procedures whereby any liability determined by the Commissioners, whether to VAT or to any statutory surcharges, penalties or assessments, can be challenged. It would seem somewhat surprising if claims such as the present, which, while they do not strictly constitute claims for payment of VAT, nonetheless involve very similar considerations, should be subject to different procedures in different tribunals, namely the Civil Procedure Rules in the High Court or the County Court. Again, this would be particularly odd in a case such as this, where section 60 appears to apply to Redlaw, but not to Total. If common law claims could be brought, the interest provisions in section 74 would mean that different rates of interest could apply to claims under the 1994 Act and common law claims, and, indeed, that the interest might run for different periods. Once again, this would appear particularly odd where the Act applied only to the person who failed to pay the tax, but not to his co-conspirators. As for the time limits, sections 73(6) and 75(2) contain two year time limits, and, more generally, section 77 contains two or three year time limits and twenty year time limits. Thus, penalties, surcharges and assessments under the 1994 Act are subject sometimes to shorter, and sometimes to longer, time limits than would apply to any claims brought in tort, which would be governed by the Limitation Act 1980. Most claims under the 1994 Act are subject to a three or two year limitation period, which would represent an eccentric mismatch with the six year limitation period which would normally apply under the 1980 Act. If the Commissioners had an unrestricted right to sue in tort, then they would often be able to avoid the shorter limitation period in section 77. If the Commissioners could only rely on tort to "fill the gaps" in the 1994 Act, then it would be equally unsatisfactory. There would, in a case such as this, be different time limits for claims against joint wrongdoers, with the principle wrongdoer being liable under the 1994 Act, and therefore often benefiting from a shorter limitation period than could avail his co-conspirators. In relation to some claims under the 1994 Act, including those under section 60, the limitation period is twenty years, which is again different from that in tort. In many cases it would be longer than the period under the 1980 Act, but bearing in mind the fraud and concealment provisions in section 32 of the 1980 Act, that would not always be the case. In any event, there would still be a curious mismatch between the limitation period appropriate for the principal wrongdoer under section 60, and that applicable to his collaborators if they are liable in tort. Accordingly, these procedural provisions also suggest to me that no claim such as that sought to be raised here could have been intended by the legislature. A claim based on tort for loss of VAT on a transaction would, as Lord Scott points out, have to give credit for any VAT paid on another transaction which was part of the same scheme; yet that would not be true of a claim based on section 60 - see section 70(4)(b). Further, although this may be less significant in practice, good faith would be a defence to a claim in tort involving dishonesty, but it would not operate as a defence to a section 60 claim - see section 70(4)(c). Even if common law claims are limited to "filling gaps", it seems unlikely that the legislature could have intended that quantum in statutory claims should be subject to different mitigation from that in common law claims, especially as common law claims will normally be against co-conspirators of the person who is statutorily liable. The claim based on wrongly credited and paid input tax As already explained, the alternative basis of the claim involves treating the whole carousel, and each purported transaction within it, as a fraud and a deceit on the Commissioners. If each transaction can be treated as bogus, then the Commissioners' claim fastens not on the output tax which should have been paid by Redlaw to the Commissioners, but on the payment by the Commissioners to Alldech in respect of purported input tax which should not have been paid. On that basis, the Commissioners' case is that, as a result of a deception (to which Total was a party), they were dishonestly deprived of money. The question is whether this way of putting the Commissioners' claim is also defeated on the "complete code issue". At least on the face of it, on this basis, the Commissioners would appear to have a strong argument to the effect that, while, at the time the money was paid to Alldech, they may have believed it to have been a payment in respect of input tax, it was not, and therefore the whole transaction was outside the ambit of the 1994 Act, and could properly be the subject of a common law claim. In other words, the Commissioners would argue that this was a straightforward case of claimants being defrauded of money by a deceitful statement, and the fact that they were led to believe by the deceit that the money was paid in the context of the VAT regime does not mean that that regime governs the claim. Attractive though that submission (and indeed its consequences) may be, it does not appear to me to tie in with the wide way in which the provisions of the 1994 Act, and sections 60 and 72 in particular, are drafted. Sections 60(2)(b) and 60(3)(a) extend the concept of "evading VAT" in section 60(1) to "obtaining…a VAT credit" where "the person concerned is not entitled to that sum" so that it plainly applies to a case where a non-existent VAT credit is falsely claimed. Section 72(2)(a), especially subpara (i), contain similar provisions for the purpose of extending the ambit of section 72(1). It appears to me, therefore that the legislature has decided to extend the statutory regime in explicit terms to cases where money is wrongly claimed and paid out as a VAT credit, which would apply here in relation to the claim made by Alldech. Further, as already mentioned, in view of its wide words, section 72(1) would extend to all the other parties involved in the fraud, including (in the present case) Total; indeed, in view of section 61, section 60 has a longer reach than merely to the taxable person. It is also worth mentioning that sections 63 and 64 apply to cases where a person "overstates his entitlement to a VAT credit". Although not quite as specific as the provisions of sections 60 and 72, these provisions also seem to me to embrace a case such as this, where a VAT credit has been wrongly claimed. In these circumstances, it appears to me that the same principles and conclusions apply in relation to the second way in which the Commissioners put their case as in relation to the first. Conclusion on the effect of the 1994 Act on the claim If a common law claim, whether based on unpaid tax or on a payment of an unjustified claim for a tax credit, could be maintained, it would either sometimes overlap with statutory remedy or be limited to cases where there was no statutory remedy. It would plainly be unsatisfactory and inappropriate to have concurrent claims under the statute and in tort. It would also, as I have just been discussing, risk rendering the limitation, procedural and mitigation provisions in the 1994 Act nugatory. The notion of the common law filling in the holes in a taxing statute, particularly one containing many remedial rights in favour of the Commissioners, often not only against the primarily taxable person, appears wrong in principle, as I have already indicated; indeed, it is getting very close to Article 4 of the Bill of Rights territory. Further, it would lead to many and significant substantive and procedural inconsistencies, and indeed duplication of process, in claims against co-conspirators, where one or more of the conspirators are liable under the statute and others are not. For these reasons, I am of the view that a claim in tort such as that raised by the Commissioners in these proceedings is precluded as a matter of law. It is tempting to hold that an exception should be made in the case of those who dishonestly evade paying VAT or make dishonest claims, and of those who assist in their dishonesty. However, simply to invoke the doctrine that "fraud unravels everything" would seem to me to involve palm tree justice. In other words, one would be relying on a general sense of morality or indignation, without regard to principle or the rule of law. Such a course would be inconsistent with principle, especially in the context of a taxing statute, and would effectively represent carte blanche for any tribunal to do what it likes. A more principled approach might appear to involve holding Total liable on the basis that it was seeking to invoke the 1994 Act "as an engine of fraud". This doctrine has, so far as I am aware, only been applied to section 4 of the Statute of Frauds 1677 (re-enacted in a partial and amended form in section 40 of the Law of Property Act 1925, which has now been replaced by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989). The basis of the doctrine and the consequent development of the law of part performance was explained by Lord Selborne LC in Maddison v. Alderson (1883) 8 App. Cas. 467 at 474 to 480. The present case can be said to be in some ways a stronger candidate for the application of the doctrine than the normal case where part performance is invoked. Total has not merely been fraudulent in the equitable sense, but has been guilty of conspiracy to deceive and to cheat the Revenue. Nonetheless, it seems to me that the doctrine is inapplicable here, as its invocation would involve the Commissioners pulling themselves up by their own bootstraps: the only reason they have a claim at all is because of the existence of the 1994 Act, so they can scarcely complain if the person against whom they are claiming relies on that Act. The conclusion that the Commissioners cannot claim common law damages from a party to a dishonest "scam" which deprived the public purse of substantial sums might appear surprising and unsatisfactory. However, although Article 4 of the Bill of Rights does not come directly into play in this case, I consider that there is a policy argument for rejecting the existence of such a claim which as mentioned is similar to the policy behind Article 4. If the Government wishes to raise tax, or to recover compensation for not having received tax which it ought to have received, it is for the legislature to give the executive, presumably the Commissioners, the appropriate powers and duties; it is not for the courts to permit the executive to rely on the common law to fill in gaps in the legislation. According to Lord Nicholls of Birkenhead, "the taxpayer must use the remedies provided by the tax legislation" - see Autologic plc v Inland Revenue Commissioners [2006] 1 AC 118 at para 13. Although that statement was made in a case where the legislation concerned contained a remedy, it has some resonance here. It does appear appropriate, as a matter of principle, and consistent with the spirit of Article 4, that the Commissioners should be limited to their statutory remedies. The law relating to direct and indirect tax is comprehensively reviewed annually by the legislature through a Finance Bill which is presented by the Chancellor of the Exchequer, no doubt after consultation with the Commissioners. Other changes in revenue law can be introduced relatively easily during the year (particularly during the passage of a Finance Bill), and this presumably sometimes happens at the instigation of the Commissioners. Such reviews and changes are often retrospective, in the sense of taking effect from the date they are publicly announced. In the present connection, I am unpersuaded that the Commissioners can gain any assistance from the way the court has treated "artificial transactions" for the purposes of taxing statutes in cases since WT Ramsay Ltd v Inland Revenue Commissioners [1982] AC 300. I appreciate that there have been dicta (e.g. per Lord Wilberforce in that very case at p 326) which appear to suggest that the court in such cases was almost acting as a quasi-legislator, filling in gaps in the legislation. However, the rationale of such cases has been conclusively explained in MacNiven v Westmoreland Investments Ltd [2003] 1 AC 311 as involving the normal principles of a purposive approach to interpretation and giving effect to the statutory language (see at para 7 per Lord Nicholls, and at paras 33 to 64 per Lord Hoffmann). In his opinion, Lord Mance, also relying on the Deutsche Morgan Grenfell case, suggests that, in order for Total to succeed, the 1994 Act must positively be shown to be inconsistent with the existence of a common law claim such as the Commissioners seek to bring. I have already identified the points which seem to me to support such a conclusion in this case. However, I should also mention the reasoning of your Lordships' House in Johnson v Unisys Ltd [2003] 1 AC 518, to which my attention has been drawn by Lord Mance. In that case, it was held to be inappropriate to develop the common law in relation to employee dismissal because (per Lord Nicholls at para 2): "[A] common law right embracing the manner in which an employee is dismissed cannot satisfactorily coexist with the statutory right not to be unfairly dismissed. A newly developed common law right of this nature, covering the same ground as the statutory right, would fly in the face of limits Parliament has already prescribed on matters such as the classes of employees who have the benefit of the statutory right, the amount of compensation payable and the short time limits for making claims. It would also defeat the intention of Parliament that claims of this nature should be decided by specialist tribunals, not the ordinary courts of law". Lord Hoffmann (after full consideration of the legislation) and Lord Millett said much the same at paras 43 to 66 and para 80 respectively. Many of the factors relating to statutory rights and remedies which persuaded the House that there should be no common law claim in Johnson are applicable here. It is true that the Commissioners' claim would not involve extending the common law, as in Johnson. However, unlike in Johnson, the claim here is not based on a relationship recognised by the common law, but on obligations created by the very statute which contains the rights and remedies. In those circumstances, I do derive some support for my conclusion from Johnson. In reaching my conclusion, I do not rely directly on the existence of section 77A of the 1994 Act, which now enables the Commissioners to visit liability for VAT on any party to a transaction who "knew or had reasonable grounds to suspect" that it was part of a carousel fraud. However, its relatively recent enactment illustrates both the principle and the practicality of the legislature dealing with carousel fraud by claiming the unpaid VAT from a party such as Total. Perhaps of greater support is what the Advocate-General said in para 42 of his Opinion in Optigen in answer to the UK Government's concern about combating carousel fraud. He accepted the desirability of "member states…taking appropriate measures against carousel fraud", and went on to point out that "article 21 of the Sixth Directive gives member states the opportunity to introduce joint and several fiscal liability", so that a person can be made responsible for the VAT due from a "co-contractor, if he knew or should have known of his co-contractor's fraudulent activities". Another point arises from section 77A. Parliament has now legislated to ensure that certain parties involved in a carousel fraud, in addition to the primary taxpayer, should be liable for the VAT the Commissioners have lost as a result of the fraud, but this new legislation does not extend to a party such as Total. In those circumstances, it would seem wrong for the common law to intervene and hold Total nonetheless effectively liable to the Commissioners for that VAT. The alternative possibility, namely that the enactment of section 77A would now exonerate Total from common law liability would appear to run counter to the notion that the common law can "fill the holes" in the statutory scheme. Article 21.3 of the Sixth Directive provides that, where there is a taxable supply, "Member States may provide that someone other than the person liable for payment of the tax shall be held jointly and severally liable for payment of the tax". (This only came into effect in October 2000, but the predecessor article contained similar provisions in at the end of article 21.1(a) and 21.1(b)). The 1994 Act was intended to give effect to the Sixth Directive. The fact that the Directive clearly permits the legislature to extend liability for payment of VAT to persons not primarily liable for payment reinforces the conclusion that, as it did not do so in relation to cases such as this, it is not for the courts to do so. All the more so where the legislature has taken advantage of that right in the 1994 Act in relation to other types of case. For these reasons, and for those given by Lord Hope (which I believe are much the same), I am of the view that the Commissioners' claim in these proceedings, whether based on the contention that they were wrongly deprived of output tax or on the contention that they were wrongly induced to credit and pay input tax, is effectively precluded by the 1994 Act. This conclusion renders it unnecessary to resolve the third issue, but I shall nonetheless consider it, not least because I understand that the majority of your Lordships consider that the Commissioners' claim is not barred by the 1994 Act. If a claim in tort is permissible, is it made out on the pleadings? The Commissioners' case, as advanced both in writing and orally, against Total relies on the tort of unlawful means conspiracy. It is common ground that that tort involves an arrangement between two or more parties, whereby they effectively agree that at least one of them will use "unlawful means" against the claimant, and, although damage to the claimant need not be the predominant intention of any of the parties, the claimant must have suffered loss or damage as a result. It is also common ground that all those ingredients are present in the pleaded case against Total. The reason the Court of Appeal, albeit with regret, held that the Commissioners had not made out the claim in the present case was that there was an additional requirement of the tort which was not present. That requirement was that the unlawful means relied on must be independently actionable by the claimant against at least one of the parties to the alleged conspiracy. The question for your Lordships is whether that is correct. This issue appears to me only to arise in relation to the first basis upon which the Commissioners put their case. That claim alleges a conspiracy which involves no independent cause of action on the part of any of the alleged conspirators; what is relied on is that the conspiracy involved criminal means, namely cheating the Revenue. However, the second basis upon which the case is put seems to me to avoid the problem identified by the Court of Appeal. That is because, as already mentioned, the Commissioners contend that the conspiracy involved means which included an independently actionable tort, namely deceit on the part of Alldech. However, in case it transpires that this second basis is not maintainable and the first basis is otherwise maintainable, the Court of Appeal's reason for holding the tort was not made out needs to be addressed. Unlawful means conspiracy is one of the so-called economic torts, which include procuring a breach of contract, unlawful interference, causing loss by unlawful means, intimidation, and conspiracy to injure (or lawful means conspiracy). These torts present problems even if they are considered individually (and yet more problems arise if they are treated as a genus). This is as true of unlawful means conspiracy as of any of the other economic torts. The issue in the present case is what constitutes "unlawful means" in unlawful means conspiracy, and in particular whether, at least in a case such as the present, a criminal act is enough, or whether it must involve an act by at least one of the conspirators which is actionable at the suit of the claimant. This issue had not been expressly addressed by any court before it was specifically discussed and decided by the Court of Appeal in Powell v Boladz [1998] 1 Lloyd's Rep Med 116. The reasoning of Stuart-Smith LJ (who gave the only reasoned judgment) is not only brief but, with respect, unsatisfactory. He cited three cases to justify the proposition that the unlawful means in the tort of unlawful conspiracy must be a civil wrong committed by at least one of the conspirators, actionable at the suit of the claimant; however, none of those cases in fact provides such support. In their opinions, Lord Walker and Lord Mance have authoritatively and fully considered the decisions which touched on this issue, before Powell, and I agree with their analyses. Not only has the issue not been addressed in your Lordships' House, but it has really only been considered in any detail at first instance, most fully and impressively by Davis J in Mbasogo v Logo Ltd [2005] EWHC 2034 (QB) at paras 51 to 89. As Davis J said at para 69, referring to Lonrho Limited v Shell Petroleum Co Ltd (No 2) [1982] AC 173 and Lonrho Plc v Fayed [1992] 1 AC 488, "there are statements in the various speeches in the cases on this topic in the House of Lords which are capable of being read either way", but they do not really grapple with the issue (because it was not relevant to the conclusion in either appeal). Accordingly, it appears to me that your Lordships' House is free to decide the issue as it sees fit. However, we should plainly resolve the issue on a principled basis, in so far as that is possible in this very tricky area. At para 57 of his opinion in OBG v Allan [2007] 2 WLR 920, Lord Hoffmann (expressing the majority view in this House) said that the fact that the means involve a crime, without also involving a civilly actionable wrong, was insufficient to establish a claim for loss caused by unlawful means. Given the obvious desirability of consistency and coherence as between the economic torts, it can fairly be said that the same rule should apply to a claim in unlawful means conspiracy. Further, the point made by Lord Hoffmann at para 57 of OBG, that "it is not for the courts to create a cause of action out of a…criminal statute which Parliament did not intend to be actionable in private law" can fairly be said to be as applicable to unlawful means conspiracy as to causing loss by unlawful means. On the other hand, it appears that the law of tort takes a particularly censorious view where conspiracy is involved. Thus, a claim based on conspiracy to injure can be established even where no unlawful means, let alone any other actionable tort, is involved. That tort is therefore frequently described as anomalous; yet its existence is very well established. Its centrally important feature is that the conspiracy must have as its primary purpose injury to the claimant. In my judgment, given the existence of that tort, it would be anomalous if an unlawful means conspiracy could not found a cause of action where, as here, the means "merely" involved a crime, where the loss to the claimant was the obvious and inevitable, indeed in many ways the intended, result of the sole purpose of the conspiracy, and where the crime involved, cheating the revenue, has as its purpose the protection of the victim of the conspiracy. The difference between intending to make a profit at the claimant's expense and intending to cause injury to the claimant is pretty fine and, in economic terms, artificial: that point emerges most clearly from the discussion in paras 130 to 134 in Lord Hoffmann's opinion in OBG. I do not think that the conclusion, at least on the facts of in this case, that the "mere" crime of cheating the Revenue can constitute unlawfulness for unlawful means conspiracy can be said to involve illegitimately creating a tort out of a crime, as mentioned in para 57 of OBG. First, there is the narrow point that the crime (or at least the crime primarily relied on in the Commissioners' argument) in the present case is a common law one, and therefore there is no question of disregarding the legislature's intention, which only arises where the tort is statutory. Secondly, there is the more general and telling point that the tort in this case involves the element of conspiracy, which is, of course, lacking in the tort considered in OBG. The importance of the ingredient of conspiracy has been examined and explained by Lord Walker and Lord Mance in their speeches, and is, as already mentioned, underlined in the field of economic torts by the anomalous tort of conspiracy to injure (or lawful means conspiracy). Thirdly, as already mentioned, the crime in the present case exists for the protection of the victim. Further, in para 61 of his speech in OBG, Lord Hoffmann made it clear that his "discussion of unlawful means" was limited to cases involving "interference with the actions of a third party in relation to the plaintiff", and did not necessarily apply to "a case of 'two party intimidation'", which, he said, "raises altogether different issues". In this case, as Lord Hope and Lord Mance have explained, the tort is of a "two party" nature, in that the conspiracy could be said to have been directed against the Commissioners. After all, it was directly intended (albeit for the purpose of enriching the conspirators) to deprive the Commissioners of money to which they were entitled, and, if successful, it was inevitably and foreseeably going to do so, and no tort, harm or crime as against any party other than the Commissioners was involved. As Lord Hoffmann implicitly recognised, it may therefore not be inappropriate to hold that the Commissioners have a cause of action in such circumstances, even though they might not have had a claim if they had suffered loss (particularly if it was as an incidental result) as a result of a crime directed at a third party. Thus the notion that the Commissioners have a claim here is not, in my view inconsistent with the reasoning of the majority in OBG,upon which Total relies. In any event, the notion of a single consistent approach as to what constitutes unlawfulness in relation to all the economic torts can be said to be inconsistent with what Clerk & Lindsell refer to as the "ramshackle" nature of the economic torts (at para 25-001) and with the statement in Stevens on Torts and Rights (2007) at p 297 that the economic torts "have no inherent unity" and that it is "a mistake to group these 'torts' together". I would in any event, at least in a case such as this, where injury to the claimant is the direct, inevitable and foreseeable result of the conspiracy succeeding, and where the crime can be said to exist for the protection of the victim, I would find it far less offensive to hold that unlawfulness can extend to a "mere" crime in unlawful means conspiracy, when it cannot do so in causing loss by unlawful means, than to hold that a "mere" crime cannot in any circumstances constitute unlawfulness in unlawful means conspiracy, when there is a tort of conspiracy to injure by means which are neither tortious nor criminal. In this connection, I should record my agreement with Lord Walker and Lord Mance that, for the reasons they give, the tort of unlawful means conspiracy is not a form of secondary liability. Furthermore, although it involves an element of pulling oneself up by one's own bootstraps, it is hard to see what role the tort of unlawful means conspiracy, whose existence is accepted by Total, could have if it did not apply in a case such as this. This is well illustrated by Stevens's suggestion, at p 249, that there is no need for the tort of unlawful means conspiracy. This is on the basis that there are three well-established tortious principles which, between them, effectively "catch" almost all who would be caught by a claim in unlawful means conspiracy. First, there is the tort of causing loss by unlawful means, the tort considered in OBG. Secondly, there is the tort of conspiracy to injure, where injury to the claimant has to be the principle purpose of the conspiracy. Thirdly, there is the well-established principle that, where two or more parties join together in some way with a view to assisting or enabling one or more of them to commit a tort, all are liable for the tort as joint tortfeasors. On this basis, Stevens suggests that there is really no role for an additional tort of conspiring to injure by unlawful means. However, if a criminal act is sufficient unlawful means, at least in some circumstances (which Stevens challenges), the present case is an example of a claim which can (at least on the basis that the case has been argued by both parties) only succeed in unlawful means conspiracy. Conspiracy to injure cannot be relied on as injury to the Commissioners was not, it is apparently accepted by the Commissioners, the primary aim of the carousel fraud. Total could not be a joint tortfeasor if there is no claim in unlawful means conspiracy, because unlawful means conspiracy is the only tort relied on. There can be no claim in causing loss by unlawful means, as if the means involve a crime which is not civilly actionable, it does not count as unlawful means for that purpose (see OBG at para 57). Accordingly, in my view, on the basis of the arguments before your Lordships, a claim in unlawful means conspiracy could have been maintained on the Commissioners' first basis of claim, as well as on the second basis, were it not precluded by the 1994 Act representing a "complete code". That is because, at least where the conspiracy has loss or damage to the claimant as the direct, foreseeable and inevitable consequence of its success, the fact that the means "only" involve a crime, at least where that is other than incidentally, appears to me to give rise to sufficient unlawfulness to establish a claim in unlawful means conspiracy. However, it seems to me that, although this argument was abandoned by the Commissioners, it may be that the better route to this conclusion is that this is a case of conspiracy to injure, and that, as Stevens suggests, there is no need for the tort of unlawful means conspiracy. I referred earlier to the point that the reasoning in paras 130 to 134 of OBG supports the view that, in this case, there is little, if any, difference between the conspirators' intention to make money and their intention to deprive the Commissioners of money: each is the obverse of the other. On that basis, it may well be that it could be said that the predominant purpose of Total and the other conspirators was indeed to inflict loss on the Commissioners just as much as it was to profit the conspirators, and hence the claim in tort is made out in conspiracy to injure. For these reasons, I would allow both the Commissioners' appeal and Total's cross-appeal, and consequently would uphold the order of the Court of Appeal dismissing the Commissioners' claim.

Arising out of SLP Crl. No.6190 of 2007 Dr. ARIJIT PASAYAT, J. Leave granted. Challenge in this appeal is to the judgment of a Division Bench of Andhra Pradesh High Court, disposing of four Criminal Appeals i.e. Criminal Appeal number. 1114, 1128, 1130 and 1155 of 2005. 3. 16 accused persons were charged for offence punishable under Sections 147, 148, 448 read with Section 149 and Section 302 read with Section 149, 324 read with Section 149 of the Indian Penal Code, 1860 in short IPC . The High Court by the impugned order disposed of the appeals with the following observations In the result, Crl.A.No. 1114 of 2005 is allowed in part. Crl. A.No.1128 of 2005 is allowed. Crl. A.No.1130 of 2005 is dismissed. Crl. A.No.1155 of 2005 is allowed. The companyvictions and sentences imposed by the lower Court on A-1, A-3, A-7 to A-9, A-12 and A-13 for the offences under Sections 302 read with Section 149, 148, 448 read with 149, 324 read with 149 of I.P.C., are companyfirmed. The companyvictions and the sentences imposed on A-2, A-4 to A-6, A-10, A-11 and A-14 to A-16 for all offences are set aside and they shall be set at liberty forthwith, if they are number required in any other crime. It is to be numbered that the appellant was accused number12 for short A12 before the Trial Court. It is relevant to numbere that accused number. 1 and 3 filed SLP Crl. number5591 of 2006 before this Court which was subsequently companyverted into Criminal Appeal number222 of 2006. By judgment dated 19th February, 2007 the appeal was partly allowed with the following findings .If the evidence on record is companysidered on the touchstone principles set out above the inevitable companyclusion is that the proper companyviction would be Section 304 Part I IPC instead of Section 302 IPC. The companyviction of the appellants is accordingly altered from Section 302 read with Section 149 to Section 304 Part I read with Section 149 IPC. Custodial sentence of 10 years would meet the ends of justice. The findings of the guilt in respect of other offences and the sentences imposed do number warrant interference. The sentence shall run companycurrently. The appeal is allowed to the aforesaid extent. Learned companynsel for the appellant submitted that the present appellant stands in the same footing as the appellants in Criminal Appeal number222 of 2006 and the present appeal may be disposed of on similar terms. Learned companynsel for the respondent-State submitted that the present appelllant was armed with an iron rod, while the appellants in Criminal Appeal number222 of 2006 were armed with lathi. Therefore, the similar treatment cannot be given to the present appellant. It is to be numbered that the High Court with reference to the evidence of PW1 numbered as follows Sri C.Padmanabha Reddy, the learned Senior Counsel for the appellants submitted that there was a delay of five hours in preferring the companyplaint and there were numberspecific overt acts attributed to the accused and omnibus allegations were made. The medical evidence is number companyroborating with the oral evidence and the deceased has numberpremeditation to kill the deceased and numbermotive was suggested by the prosecution for the companymission of the offence and it was only in respect of the hiring of the Auto rickshaw by the deceased. He further submitted that in Ex.P-1 companyplaint only seven accused were said to be attacked and the witnesses mentioned in the inquest report were number examined. PW-1 attributed overt acts only to A-12 and A-13 and the remaining accused were said to be beaten with sticks which is different from the version given in Ex.P-1. Though PWs. 5 and 6 stated that all the accused attacked, their names were number mentioned in Ex.P-1. the overt acts attributed to the accused during the companyrse of evidence were number mentioned in the earlier statements and the whole version is subsequently developed to strengthen the prosecution. The receipt of injuries by PW-2 was number companyroborated with the evidence of the Doctor who examined PW-2. Though the accused were attributed overt acts of beating the deceased, there were numbercorresponding injuries on the deceased and for the alleged recovery of properties, the recovery panch turned hostile and did number support the prosecution case and as A-13 was implicated in this case, all the accused are entitled for benefit of doubt and they are entitled for acquittal. Since there is specific mention about A-1, A-3, A-7 to A-9, A-12 and A-13 beating the deceased with sticks, we are unable to agree with the argument that the witnesses improved the version by attributing overt acts to the accused in the evidence Above being the position, the findings recorded in Criminal Appeal number222 of 2006 by this Court are applicable to the present appeal. Accordingly appellants companyviction is altered to Section 304 Part I read with Section 149 IPC as was done in the case of the appellants in the aforesaid appeal. Custodial sentence of 10 years would meet the ends of justice. The findings of the guilt in respect of other offence and the sentences imposed do number warrant any interference.

SECOND SECTION CASE OF ONAY v. TURKEY (Application no. 31553/02) JUDGMENT STRASBOURG 20 September 2007 FINAL 20/12/2007 This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Onay v. Turkey, The European Court of Human Rights (Second Section), sitting as a Chamber composed of: MrsF. Tulkens, President,MrA.B. Baka,MrI. Cabral Barreto,MrR. Türmen,MrM. Ugrekhelidze,MrV. Zagrebelsky,MrD. Popović, judges,and Mrs S. Dollé, Section Registrar, Having deliberated in private on 30 August 2007, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 31553/02) against the Republic of Turkey lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by Turkish nationals, Mr Sıddık Onay and Mrs Zinnet Onay, on 27 June 2002. 2. The applicants were represented by Mr M Beştaş, Mr S Karadayı and Mrs M Beştaş, lawyers practising in Diyarbakır. The Turkish Government (“the Government”) did not designate an Agent for the purposes of the proceedings before the Court. 3. On 12 July 2006 the Court decided to give notice of the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the application at the same time as its admissibility. THE FACTS I. THE CIRCUMSTANCES OF THE CASE 4. The applicants, Sıddık Onay and Zinnet Onay, were born in 1985 and 1948 respectively and live in Diyarbakır. The second applicant is the mother of the former. 5. When the first applicant (“the applicant”) was 17 years old, on 25 May 2002 at about 2 p.m. he was arrested at his home by police officers from the Department of Peace and Order attached to the Diyarbakır Security Directorate, on suspicion of involvement in various incidents of bag snatching in Diyarbakır. 6. According to the report drafted by the police, the arrest took place on 26 May 2002 at 9.50 p.m. on the street outside his residence. The report stated that the police had acted upon the information of a certain M.D., a fellow detainee, who had cited the applicant's name during his interrogation in relation to the bag snatching in Diyarbakır. The report also stated that the applicant's mother had been informed of the arrest and detention. 7. On 26 May 2002 the applicant was given a medical examination at the Forensic Medicine Institute. A subsequent medical report revealed that there were some blade cuts on his left arm which were three or four days old but, apart from those injuries, no signs of possible ill-treatment were noted. The applicant was then taken into custody at the Peace and Order Department. 8. On 27 May 2002 at 3.30, 4.15, 4.45, 5.10, 5.35 and 6 p.m., the applicant and M.D. were taken to on-site inspections. A lawyer assigned by the Diyarbakır Bar Association was present during these inspections, when the applicant gave detailed statements as to how he and M.D. had planned and committed the offences. 9. Around 6.15 p.m. the same day, he was again given a medical examination. The medical report drafted on that occasion recorded no signs of beatings or the use of physical force on the applicant's body. The same day, at the request of the police, the public prosecutor, without seeing the applicant, extended his custody period by two more days under Article 128 § 2 of the former Code of Criminal Procedure. According to the report drafted by the police at 6.25 p.m. on that day, the applicant was handed over to the Juvenile Department of the Security Directorate. 10. On 28 May 2002 at 10.30 a.m., the applicant was brought for a further medical examination. The medical report prepared on that day noted two bruises of 10 x 2 cm on his right upper arm and a bruise of 5 x 1 cm on his left upper arm just below his shoulder, which were estimated to be two or three days old; some old cutting scars on his arms and chest were also noted. The applicant was given a second medical examination at 4.15 p.m. on the same day. The second medical report confirmed the findings of the first report. These reports both stated that the medical examinations had been performed upon the request of the Peace and Order Department. 11. On 29 May 2002 the Juvenile Police took the applicant for a medical examination. The forensic medical report prepared on that occasion recorded the old cutting scars on the applicant's body, but no signs of the use of recent physical force were noted. 12. On the same day the applicant was brought before the public prosecutor. In his statement to the public prosecutor, made in the presence of another duty lawyer, the applicant denied the charges against him. The lawyer claimed that the applicant had been ill-treated whilst in police custody and that he still bore the signs of that treatment. He requested that the applicant be referred to the forensic medicine institute for a complete medical report. 13. Later the same day, the applicant repeated his allegations of ill-treatment before the investigating judge. He alleged that, after the police officers had apprehended him, they blindfolded him; electric shocks were administered to his body; he was beaten with truncheons and forced to admit to the charges. He showed the marks on his body to the judge. The judge noted a bruise of 7 cm about the thickness of a little finger on the applicant's right upper arm, a bruise of 3 cm the thickness of a little finger just under his left shoulder, a scab-covered lesion under his left kneecap, a swelling on his left ankle and some old blade cuts. The applicant was then remanded in custody. 14. On 30 May 2002 the applicant's lawyer filed a complaint with the Diyarbakır Public Prosecutor's Office, requesting the public prosecutor to bring criminal proceedings against the police officers who had been on duty when the applicant was in their custody. He also repeated that the applicant should be referred for a full medical examination. Subsequently, the public prosecutor launched an investigation into the applicant's complaint of ill-treatment. 15. On the same day, the public prosecutor took a detailed statement from the applicant, in which he complained about the police officers and repeated almost the same submissions he had made to the investigating judge, adding that he had not been subjected to further ill-treatment after he had been handed over to the Juvenile Police. He also admitted that the scars on his upper and lower arms as well as his wrist were self-inflicted with metal wire, which he had torn off the cell window, as he could not bear the pain of ill-treatment. After taking the applicant's statement, the public prosecutor issued a letter to the Forensic Medicine Institute, asking for a detailed medical report on the applicant, including an explanation as to the nature and cause of his injuries. 16. A report submitted by the Forensic Medicine Institute on 30 May 2002 made reference to the previous medical reports dated 26, 27 and 28 May 2002, and drew its own conclusions after the applicant had been examined. It noted that the applicant had a bruise of 5 x 0.5 cm of which the outer line was a green-yellow colour and the centre was purple-dark blue, on the right upper arm, estimated to be three or four days old, and an old scar of 3 x 1 cm on his left kneecap. The bruising was deemed to have been caused by blunt force trauma. The applicant's injures were not regarded as life threatening but classified as sufficient to render him unfit for a day. 17. On 18 November 2004 the public prosecutor decided not to prosecute the police officers concerned. Referring to all the medical reports, this decision concluded briefly that the lesions had occurred prior to the applicant's arrest and that the scars on his body and arms had been self-inflicted, as he admitted in his statement of 30 May 2002. The applicant challenged this decision before the Siverek Assize Court. 18. On 19 January 2005 the Assize Court rejected the applicant's objection. II. RELEVANT DOMESTIC LAW 19. Section 18 (b) of the Regulations on Apprehension, Detention and Interrogation (1 October 1998, as amended on 13 August 1999) provides: “Anyone who has reached the age of eleven, but is no more than eighteen, may be arrested. The parents and a lawyer shall be informed of the arrest and the minor shall be brought promptly before the public prosecutor. In these cases, the preliminary investigation shall be conducted personally by the Principal Public Prosecutor or by a public prosecutor to whom the former delegates that duty...” THE LAW I. ALLEGED VIOLATION OF ARTICLES 3 AND 13 OF THE CONVENTION 20. The first applicant complained that he had been ill-treated whilst in police custody. In particular, he submitted that he had been beaten; water had been poured on him, followed by electric shocks. The second applicant also claimed that she had suffered on account of the emotional distress on hearing of her son's isolated detention and ill-treatment. The first applicant further alleged that he had not had an effective remedy before the national authorities for his complaint of ill-treatment. 21. They relied on Articles 3 and 13 of the Convention, which provide as follows: Article 3 “No one shall be subjected to torture or to inhuman or degrading treatment or punishment.” Article 13 “Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.” A. Admissibility 22. The Government argued that the second applicant, Zinnet Onay, who is the mother of the first, was not a victim of the alleged violation of Article 3 of the Convention. They contended that it was clear from the documents of apprehension and detention that the young man's parents had not made any attempt to visit him or challenge his detention, although they had been promptly informed of his arrest. 23. The Court notes that, in the present case, the anguish suffered by the second applicant cannot be regarded as being of a dimension or character distinct from the emotional stress which may be regarded as inevitably caused to relatives of victims of alleged human-rights violations (see Nesibe Haran v. Turkey, no. 28299/95, § 84, 6 October 2005, and, a contrario, İpek v. Turkey, no. 25760/94, § 183, ECHR 2004‑II). 24. In these circumstances, the Court considers that the second applicant cannot claim to be a victim of a violation of Article 3 of the Convention in terms of Article 34. It follows that this part of the application is incompatible ratione personae with the provisions of the Convention and must be rejected pursuant to Article 35 §§ 3 and 4. 25. The Court further notes that the first applicant's complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. Nor is it inadmissible on any other grounds. It must therefore be declared admissible. B. Merits 1. The alleged ill-treatment of the first applicant 26. The first applicant submitted that he had been subjected to ill-treatment in police custody. He relied on his medical reports in support of the allegation. 27. The Government maintained that the allegation of ill-treatment was ill-founded. They referred to the findings in the applicant's medical reports and contended that the lesions on his upper arms had occurred before or on 26 May 2002 (the day of the arrest) at the latest. Moreover, the size and nature of the bruises were not sufficient to substantiate the alleged ill-treatment, such as the administration of electric shocks or beatings by truncheons. They further stated that, even assuming that the bruises on the applicant's arms had occurred at the time of the arrest on 26 May 2002, which may have been due to the police grasping him by his arms to prevent him fleeing. They also alleged that the bruises which were deemed to be caused by blunt trauma may also have been self-inflicted by the applicant. In any case, the applicant's injuries were not regarded as life threatening in any medical report. Had the applicant been beaten with truncheons, the lesions would have been larger and more serious. Thus, it was not clear beyond reasonable doubt that the bruises had occurred during police custody. 28. The Court reiterates that where an individual is taken into custody in good health, but is found to be injured by the time of release, it is incumbent on the State to provide a plausible explanation of how those injuries were caused and to produce evidence casting doubt on the victim's allegations, particularly if those allegations were corroborated by medical reports. Otherwise, a clear issue will arise under Article 3 of the Convention (see Selmouni v. France [GC], no. 25803/94, § 87, ECHR 1999‑V; Aksoy v. Turkey, judgment of 18 December 1996, Reports of Judgments and Decisions 1996‑VI, p. 2278, § 62; Tomasi v. France, judgment of 27 August 1992, Series A no. 241-A, pp. 40‑41, §§ 108‑111; Ribitsch v. Austria, judgment of 4 December 1995, Series A no. 336, p. 26, § 34). 29. In assessing evidence, the Court has generally applied the standard of proof “beyond reasonable doubt” (see Avşar v. Turkey, no. 25657/94, § 282, ECHR 2001‑VII). Such proof may, however, follow from the coexistence of sufficiently strong, clear and concordant inferences or of similar unrebutted presumptions of fact (see Ireland v. the United Kingdom, judgment of 18 January 1978, Series A no. 25, pp. 64‑65, § 161). Where the events in issue lie wholly, or in large part, within the exclusive knowledge of the authorities, as in the case of persons under their control in custody, strong presumptions of fact will arise in respect of injuries occurring during detention. Indeed, the burden of proof may be regarded as resting on the authorities to provide a satisfactory and convincing explanation (see Salman v. Turkey [GC], no. 21986/93, § 100, ECHR 2000‑VII). 30. In the instant case, the Court observes that the applicant was medically examined at the time of his arrest and just before he was taken into police custody on 26 May 2002. This report noted no signs of ill-treatment on his body, but only some old blade cuts. The Government contended that the applicant had been handed over to the Juvenile Police Department on 27 May 2002. The Court notes that he was taken for a further medical examination on 28 May 2002. The two medical reports drafted on that day showed that the applicant bore bruises of 10 x 2 cm and 5 x 1 cm on both his arms. However, they recorded that the requests for medical examinations were made by police officers from the Peace and Order Department instead of the Juvenile Police. In this respect, the Court notes the inconsistency between the documents provided by the domestic authorities. On 29 May 2002 the applicant was taken for another medical examination by the Juvenile Police. That medical report recorded the old cutting scars but no signs of recent physical force. However, the bruises were again shown in the report of 30 May 2002 provided by the Forensic Medicine Institute. 31. The Court finds it striking that the lesions which were noted in the report of 28 May 2002 had disappeared on 29 May 2002 and then reappeared in the report of 30 May 2002. Therefore, it attaches no weight to the findings of the report of 29 May 2002, in which no signs of violence were found on the applicant's person. 32. The Court further observes that the applicant, whilst complaining in detail about the ill-treatment to the public prosecutor and the investigating judge, had only admitted at the beginning of his detention that the cutting scars were self-inflicted (paragraph 15 above). 33. In these circumstances, the Court is not satisfied with the Government's explanations as to the manner in which the bruises found during and after the custody period were sustained by the applicant. 34. There has accordingly been a substantive violation of Article 3 of the Convention. 2. The alleged lack of effective investigation 35. The applicant maintained that the authorities had not conducted an adequate investigation into his allegation of ill-treatment. 36. The Government submitted that, upon the applicant's petition concerning the allegation of ill-treatment, the public prosecutor took a detailed statement from him, and asked the Forensic Medicine Institute for a complete medical report, including an explanation as to the nature and cause of the injuries found on his body. Subsequently, on 18 November 2004 he decided not to prosecute the police officers concerned. Referring to all the medical reports, this decision concluded that the applicant's lesions had occurred prior to his arrest and that the scars on his body and arms had been self-inflicted. 37. The Court reiterates that where an individual raises an arguable claim that he or she has been seriously ill-treated by the police in breach of Article 3, that provision, read in conjunction with the State's general duty under Article 1 of the Convention to “secure to everyone within their jurisdiction the rights and freedoms defined in ... [the] Convention”, requires by implication that there should be an effective official investigation. This investigation should be capable of leading to the identification and punishment of those responsible (see Assenov and Others, judgment of 28 October 1998, Reports 1998-VIII, p. 3290, § 102; Labita v. Italy [GC], no. 26772/95, § 131, ECHR 2000‑IV). 38. In the present case, the Court notes that the public prosecutor initiated an investigation as soon as the applicant's lawyer filed a petition concerning the ill-treatment. However, it appears from the case file that the prosecutor only relied on the applicant's statement of 30 May 2002, in which he admitted that the old cutting scars had been self-inflicted, when he decided not to prosecute the police officers (paragraph 17 above). He did not make any inquiry into the blunt trauma lesions noted in the medical report of 30 May 2002, which were estimated to be three or four days old, and thus falling within the custody period. The Court further notes that the public prosecutor disregarded the inconsistency between the applicant's medical reports. Nor, did the Siverek Assize Court, which had dealt with the case on appeal, take account of the preceding elements. Moreover, the case file does not disclose any information as to whether the prosecutor or the Assize Court took testimony from the accused police officers. 39. In the light of the above, the Court concludes that the applicant's claim that he had been ill-treated at the hands of the police was not subject to an effective investigation by the domestic authorities, as required by Article 3 of the Convention. 40. There has therefore been a procedural violation of this provision. 41. In these circumstances, the Court considers that no separate issue arises under Article 13 of the Convention (see Timur v. Turkey, no. 29100/03, §§ 35‑40, 26 June 2007). II. ALLEGED VIOLATIONS OF ARTICLE 5 §§ 1, 3 AND 4 OF THE CONVENTION 42. The applicant alleged, first, that the domestic law required that minors be brought promptly before a public prosecutor, on apprehension, and that it was for the prosecutor to conduct the investigation in person. However, in his case, the police officers were in charge of the investigation, and the public prosecutor was not involved. Secondly, he maintained that his detention in police custody had been excessive. He relied on Article 5 §§ 1 (c) and 3 of the Convention. 43. Thirdly, the applicant submitted that he had been unable to challenge the lawfulness of his detention as he had had no legal representation during the police custody and that the presence of his lawyer during the on-site investigations had been limited to witnessing the events. He invoked Article 13 of the Convention in this respect. However, the Court finds it appropriate to examine this complaint under Article 5 § 4 of the Convention. 44. The relevant part of Article 5 of the Convention provides: “1. Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: (c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so; ... 3. Everyone arrested or detained in accordance with the provisions of paragraph 1 (c) of this Article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power ... 4. Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful.” 45. The Government argued that the applicant had failed to exhaust the domestic remedies available to him, as required by Article 35 § 1 of the Convention. In this connection, they submitted that, according to Article 128 § 4 of the former Code of Criminal Procedure, the applicant's parents or his representative could apply for his release. However, they did not pursue habeas corpus proceedings before the domestic courts. 46. The Government further submitted that, as the applicant had been acquitted, he was entitled to have access to the remedy provided for by the Compensation Law (No. 466) which was in force at the material time. Under Article 2 of that Act, persons who had been subjected to unlawful arrest or detention could apply to the nearest Assize Court within three months from the date of the competent authority's decision and claim compensation for any kind of loss which they may have sustained. 47. The Court reiterates that the rule of exhaustion of domestic remedies referred to in Article 35 § 1 of the Convention obliges the applicants first to use remedies that are normally available and sufficient in the domestic legal system to enable them to obtain redress for the breaches alleged. It also requires that the complaints intended to be brought subsequently before the Court should have been made to the appropriate domestic body, at least in substance and in compliance with the formal requirements laid down in domestic law (see Aksoy, cited above, §§ 51‑52; Akdivar and Others v. Turkey, judgment of 16 September 1996, Reports 1996‑IV, §§ 65‑67). 48. The Court notes that, in the present case, the applicant complained of the circumstances of his detention which allegedly did not comply with the requirements of domestic law, and which had therefore been unlawful. The Court observes that the applicant's detention may have breached certain requirements of Section 18 (b) of the relevant regulations (paragraph 19 above). However, the Court cannot overlook the fact that the applicant was arrested at his home in the presence of his mother. The arrest report drafted by the police on 26 May 2002 (paragraph 6 above) confirmed that the applicant's mother had been informed of his arrest and detention. Furthermore, the applicant was assisted by two different duty lawyers during and after the police custody period (paragraphs 8 and 12 above). Although he claims that the first lawyer had only witnessed the events during the on-site inspections and had not provided him with sufficient legal assistance, the second lawyer had lodged a complaint concerning the ill-treatment before the public prosecutor (paragraph 14 above). However, that petition did not include any submission in relation to the alleged unlawfulness of the detention. Nor, were there any other authorities whom his mother or lawyers approached on his behalf concerning his Article 5 grievances. 49. In the light of the foregoing, it would be reasonable to expect from the applicant that he had brought these complaints before the national authorities prior to his application to the Court, which has a role that is subsidiary to the national systems safeguarding human rights. 50. It follows, that this part of the application must be rejected for non-compliance with the requirement of exhaustion of domestic remedies pursuant to Article 35 §§ 3 and 4 of the Convention. III. APPLICATION OF ARTICLE 41 OF THE CONVENTION 51. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Damage 52. The first applicant claimed 1,500 new Turkish liras (YTL) (approximately 838 euros (EUR)) in respect of pecuniary damage and YTL 100,000,000 (approximately EUR 55,796) for non-pecuniary damage. 53. The Government contested these claims as being unsubstantiated and excessive. 54. The Court does not discern any causal link between the violation found and the pecuniary damage alleged; it therefore rejects this claim. However, having regard to the violations found and ruling on an equitable basis, it awards the first applicant EUR 5,000 in respect of non-pecuniary damage. B. Costs and expenses 55. The first applicant also claimed YTL 11,200 (approximately EUR 6,247) for the costs and expenses incurred before the Court. In support of his claim, he submitted the Diyarbakır Bar Association's recommended scale of fees for 2006. 56. The Government disputed the amount claimed. 57. According to the Court's case-law, an applicant is entitled to reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and were reasonable as to quantum. In the present case, the applicant has not substantiated that has actually incurred the costs so claimed. Accordingly, it makes no award under this head. C. Default interest 58. The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Declares the first applicant's complaint concerning ill-treatment in police custody admissible and the remainder of the application inadmissible; 2. Holds that there has been a substantive violation of Article 3 of the Convention as regards the complaint of ill-treatment; 3. Holds that there has been a procedural violation of Article 3 of the Convention on account of the authorities' failure to conduct an effective investigation into the allegations of ill-treatment; 4. Holds (a) that the respondent State is to pay the first applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 5,000 (five thousand euros) in respect of non-pecuniary damage, plus any tax that may be chargeable, which sums are to be converted into new Turkish liras at the rate applicable at the date of the settlement; (b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 5. Dismisses the remainder of the first applicant's claim for just satisfaction. Done in English, and notified in writing on 20 September 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. S. DolléF. TulkensRegistrarPresident

A. Vaidialingam, J. This appeal by certificate is directed against the order of the Bombay High Court dated December 9, 1966 in Appeal No. 110 of 1965 By the said judgment the Division Bench companyfirmed the order of the learned Single Judge in Miscellaneous petition No. 131 of 1964 quashing the numberice dated November 9, 1965 issued Under Rule 10 A of the Central Excise Rules, 1944. The first respondent is a public limited companypany incorporated under the Companies Act, who manufactures steel wires On April 24, 1962 they had on hand 4077 Metric Tonnes of imported steel wire rods. Out of this quantity 1173 Metric Tonnes had been imported and duly cleared from the customs prior to April 24, 1962. The balance appears to have been purchased by the first respondent from the Iron and Steel Controller, Calcutta, prior to April 24, 1962. No excise duty was leviable on these rods or steel wires. But the excise duty was leviable on steel ingots. Item No. 26AA was inserted in the schedule to the Central Excise and Salt Act, 1944 hereinafter to be referred as the Act whereby certain iron and steel products specified therein were made subject to excise duty. By numberification No. 70 of 1962 dated April 24, 1962 issued Under Rule 8 1 of the Central Excise Rules hereinafter to be referred as the Rules , certain exemptions were granted By another numberification No. 90 of 1962 issued under the same rule on May 10, 1962 certain iron and steel products were exempted. The first respondent had manufactured steel wires out of the imported steel wire rods and had substantially removed them from their manufacturing premises between the period May 4, 1962 and June 21, 1963. There is numbercontroversy that at the time of clearance of the said steel wires, the same were assessed to duty which was paid and thereafter the first respondent was permitted to clear and remove them from their manufacturing permises. There was a demand by the Inspector of Central Excise on July 6, 1962 for further payment at the rate of Rs. 39.35 per metric tonnes But on representations made by the first respondent to the Assistant Collector of Central Excise, the numberice dated July 6, 1962 was withdrawn. Nevertheless on November 9, 1963 the second appellant issued a numberice Under Rule 10A calling upon the first respondent to pay a sum of Rs. 1,69,258.20 being additional excise duty stated to be payable by them on the goods already cleared The first respondent protested against this demand. The demand was also followed by a letter of the first appellant calling upon the first respondent to pay the additional duty demanded. The respondents filed miscellaneous petition No. 131 of 1964 in the High Court of Bombay under Art 226 to quash the demands companytained in the numberice dated November 9, 1963. Before the learned Single Judge both the sides appear to have accepted that the decision of the Division Bench in Appeal No. 69 of 1963 will govern this case also. Accordingly the writ petition was allowed and the appeal taken before the Division Bench was also dismissed, on December 9, 1966. The question that arises for companysideration is whether the numberice dated November 9, 1963 issued Under Rule 10A is valid According to the appellants Rule 10A applies whereas according to the respondents Rule 10 applies and the demand having been made for beyond the period provided therein is illegal. We have discussed the scope of the rules in Civil Appeal No. 1467 of 1967 in which we have just number delivered the judgment. For the reasons stated therein we hold that Rule 10A is number applicable and as such the High Court was justified in quashing the demand dated November 9, 1963 We may further state that even on the restricted interpretation sought to be placed on Rule 10 by the appellant it will be seen that the case on hand is one where a duty was levied and paid by the party. What is sought to be done is to recover an additional duty on the ground that the original imposition was at a lower rate due to the misapprehension of the Department.

Akenhead J: . This revised case management hearing was fixed on Wednesday for an hour-and-a-half, starting at 8.30 in the morning. It was listed for an hour-and-a-half and the purpose was, as I made clear on Wednesday, that the Court should finally deal with, and dispose of, issues relating to the scope of electronic disclosure on the part of the claimants, primarily. It is clear that substantive agreement on the defendants' electronic disclosure had been reached. From the transcript which the claimants have kindly paid for and provided to the Court, page 21, I said this: "We will say 8.30 Friday. I'm not going to make an order, but I do expect the solicitors, at least, to meet on the phone and start going through this. This has been the subject matter of discussion for a long time now. It is important that both parties focus with a view to getting resolution, but the parties should be in no doubt that I will make decisions one way or another about electronic disclosure on Friday morning." Also, at that hearing, Mr Ciumei, junior counsel instructed on behalf of the claimants, sought extra time to comply with the order which I had already made, and it was a final order that further information relating to quantum be made. I had ordered that it be provided by 27 March 2012. Mr Ciumei, on instructions, sought an extension to Maundy Thursday, 5th April. I refused that application. Of the two grounds advanced, the major ground advanced was that the claimants, for reasons best known to themselves, were planning to instruct Herbert Smith as their new solicitors in place of Bird & Bird. There was no suggestion, and indeed there is still no suggestion, that Bird & Bird's services have been dispensed with on the grounds of any dissatisfaction with the competence or quality of service which they had provided to their clients to date. I said this at paragraph 20 of the judgment which I handed down orally on that date: "I've no doubt that the claimants and those within the claimant companies will know that there will be a very, very real risk that the progress of this litigation will be delayed and disrupted by a change of solicitors at this stage, which is already two-and-a-half years into the proceedings, certainly so far as Dr Ho is concerned and rather less so far as Dr Gover is concerned. The claimants must know this: that if this is their intention or motivation, which I know not, they cannot seek to secure indulgence from the court when, for entirely voluntary reasons and with their eyes open, they decide at a relatively late stage in litigation, to change solicitors. That is not a good reason, in my view." What has happened is (and I will come to the detail) that the claimants and defendants have been in discussion in a rather desultory way over much of the last six or seven months in relation to electronic disclosure. I will come to the reasons for the fact that progress has been slow on that later. Before the meeting of the parties in the courts this week, there had been some real progress in relation to electronic disclosure. The solicitors had helpfully met, and substantially agreed on much of the form of the order, and there were a number of matters left outstanding for resolution by the court. At the meeting before the court on Wednesday, Mr Ciumei, who has clearly been given an enormous amount of work to do by his solicitors and clients, was not in a position that day to deal with the question of electronic disclosure. Contrary to suggestions which I made some weeks ago, the claimants have not seen fit to bring in additional counsel to assist; Mr Goulding QC, who is the leader retained by the claimants, has gone on no doubt a well-deserved holiday this week, and so he is not available. It has all been landed on Mr Ciumei's desk, with no additional counsel assistance. I was not unsympathetic to that, so I adjourned the question of electronic disclosure and its final resolution until today. I made it clear, as I said, that the solicitors should meet, and I was assured that it was expected that instructions would be received from the claimants before midday on Thursday, 15th March, and that a without prejudice meeting could take place in the afternoon further to narrow down matters in issue. That has not happened. One of the reasons for that may be that Messrs Herbert Smith have now been formally instructed and I am told, and I accept, that Bird & Bird have applied to come off the record and Herbert Smith have applied to come on the record so far as this litigation is concerned. I am also told, and have no reason to doubt, that Messrs Bird & Bird are still retained, albeit not on the record, and they are retained, no doubt, to provide appropriate further assistance. Mr Ciumei, and I do not criticise him for this, took the best part of an hour of the hour-and-a-half hearing effectively applying for further time for the parties to try to agree matters relating to electronic disclosure. Messrs Herbert Smith, doubtless as quick off the mark as they could be, sent, just before 8.30 pm last night, a six-page letter to the defendants' solicitors, which obviously the court did not see until this morning. Essentially, the consent draft order attached (doubtless hoping for consent) was to the effect that a further 12 days or so be provided for the parties to seek agreement, in relation to certain elements of the electronic disclosure exercise, and that finally that the parties should use reasonable endeavours to agree the list of key word searches to be applied by 10th April 2012. It would only be if the parties were unable to reach agreement in relation to the scope of disclosure of electronic documents by 13th April 2012 that either party would have liberty to apply to the court for further directions. I now need to go back to the background to all this. I am not going to reiterate the background to the case, which is referred to in the judgments which I have already handed down, perhaps in rather more detail in the draft judgment, which the parties have, in relation to the claimants' strikeout application and the defendants' application for security for costs. That judgment is due to be handed down next week, due to Mr Goulding's absence on holiday. The proceedings were initially started against Dr Ho in 2009. I am told that some disclosure had been exchanged between the parties. However, when the proceedings against Dr Gover were commenced in April 2011, there was not, at that stage, a formal order relating to disclosure in relation to him. The defendants' solicitors wrote to the claimants' solicitors on 18 August 2011, setting out in detail what their proposals were in relation to electronic disclosure. That was supported by a draft witness statement from Mr Arben, one of the defendants' solicitors, which also had attached to it, as is not uncommon in these cases, a detailed draft order. That letter asked for comments from the claimants' solicitors. There then followed some correspondence, which could be described as "desultory", between the solicitors. On 19 September 2011, the defendants' solicitors, Wragge & Co, wrote, saying: "We note your continued failure to engage with the detailed requests for disclosure which we sent to you. If your clients truly intend to adopt a constructive approach, there is no reason for them not to respond to the many points identified in the draft statement of Mr Arben. We consider that the key words, the lists of custodians that we have provided was comprehensive in relation to Mr Gover's proceedings. Save for any adjustments that may possibly need to be made if any new issues are raised from your clients' and defence to counterclaim. There is no real risk of unnecessary duplication work because of some possible small adjustment in relation to key words and custodians of Mr Gover. Should you consider that any additional key words or custodians should be added in respect of Mr Gover's proceedings, please let us know and we will be happy to consider them with our clients." Messrs Bird & Bird for the claimants responded to the electronic disclosure request, by their letter of 4 October 2011. At this stage they had taken, doubtless seeking instructions, just under two months to respond. They said: "We are currently undertaking a detailed review of the proposals. It appears you propose an annual review of approximately 100 mailboxes over a 16-year period with 262 search terms, some of which are very broad, then being applied to any remaining mailboxes within the claimants' organisations. That exercise will take years to complete, so it is not clear to us that this was the proposal you intent to take, please confirm. "Regardless of the above, our analysis of your suggested list of custodians and key words is ongoing. It is no small task, however, and we will revert to you regarding them as soon as is reasonably practicable ". Wragge & Co responded reasonably promptly on 14 October, and sought to address the fear that the proposal that they had put forward would take years to complete. They offered to assist with guidance as how best to manage the process in a cost efficient and proportionate manner. Bird & Bird, even more promptly, replied on the same day. They referred to the draft order attached to Mr Arben's draft witness statement, and said that the claimants would conduct a review of all e-mail documentation relating to the key custodians, and the "above filters would be applied to any remaining documentation" caught within the above. They said, amongst other things, that they intended: "... in due course to put forward a list of proposed search terms. Plainly those which overlap with your proposed search terms may then be agreed. Further discussion may be necessary in relation to the others suggested by either side. We expect to respond to your extensive list of custodians on a similar basis." Wragge & Co responded less promptly ten days later challenging a certain amount of what was said by Bird & Bird, suggesting that they need only comment on the proposal that had been sent to Bird & Bird. Bird & Bird responded on 2 November 2011, raising issues about the manual review which they thought was being called for in the draft order. Thus it was little more was done on this until the hearing before Mr Justice Ramsey on 8 December 2011. Amongst numerous other orders that he made, he ordered this starting at paragraph 15: "15. The claimants' response to the defendants' disclosure proposals is to be filed and served no later than 4.00 pm on 10 February 2012. This is to include the claimants' response to the defendants' annex draft disclosure order: claimants, and the defendants' annexed 'draft disclosure order: defendants'." 16. The parties are to seek to agree the terms of a disclosure order by 5 March 2012. 17. If the parties are unable to agree the scope of the disclosure exercise, a further hearing should be held on 5 March 2012 to make an appropriate order. Any further outstanding matters of case management are also to be dealt with at that hearing." 18. Disclosure and inspection should take place in stages. The 'long stop date' by which the final disclosure stage is to be complete is to be complete by no later than 4.00 pm on 2 July 2012." 19. The last date by which inspection is to be completed is 4.00 pm on 16th July 2012." The trial date was fixed, at this hearing, to commence in about mid-January 2013. It is quite clear, therefore, that Mr Justice Ramsey was envisaging resolution of matters relating to electronic disclosure by no later than 5 March 2012. He clearly envisaged that thereafter the electronic disclosure exercise would not be a simple one, but that it might stretch to two or three months' worth of work, if not a little more. There was going to be rolling disclosure of the electronic documentation, but with a final date on 2 July 2012. These dates, I am confident, were carefully selected to provide a good prospect of securing that the trial takes place and commences in January 2013.It is therefore important, given what is in issue in this case, both in terms of liability, causation and quantum, that these timetables are kept to. There is no good reason why they could not be kept to. The claimants, through their solicitor, Mr Wayne, put in their response on the electronic disclosure on 10 February 2012. I am not going to go into the detail of that, save to refer to several paragraphs.It is not an unhelpful response in that it begins to make clear what they say the appropriate custodians should be and they look at key words and key word searches, date ranges and the like. He accepts, doubtless on instructions, that one of the key custodians in relation to the search should be Ms Elena Ambrosiadou, who I have referred to elsewhere as "EA"; I hope she does not mind. She is on any count a key player in the matters which are in issue in these proceedings. It is said that she is the effective owner and controller of the IKOS Group. That may or may not be right, but that is certainly what is said and it is certainly clear that on any count she plays a major role. It has been confirmed by counsel for the claimants today that she is indeed the chief executive of IKOS CIF Limited and she certainly has been, in the past, a director and shareholder of Phaestos Limited. The witness statement again, doubtless on instructions, identifies that the claimants were proposing searches to the mailboxes of a number of custodians, including EA. He says, at paragraph 56: "The claimants believe that searching these mailboxes will suffice to generate any materially relevant documents. However, for the reasons that are now abundantly clear from my assessment of the data, the volumes involved in this case, it is obvious that some form of initial filtering will need to be applied before any manual review is conducted." He then refers to the possibility of connector or proximity searches and, in paragraph 58, he looks at certain key word searches and connector phrasing. In paragraph 63, he identifies the locations from which the data will be collected. He identifies a number of servers based in different parts of Europe, including Cyprus and Frankfurt. The defendants responded to that on 27 February 2012. I am not going to go in detail to that, but they undoubtedly modified their proposals in the light of what Mr Wayne had said in that statement. They identified, for instance, in addition to what Mr Wayne was talking about, some additional custodians, some other electronic documents or classes of electronic documents that should be searched for as well, which appeared to be in issue. On 28 and 29 February 2012 I heard the defendants' application for security for costs and the claimants' application to strike out the surveillance claims in the counterclaim. On 2 March 2012, the claimants filed, pursuant to a final order which I had granted about a fortnight before, their response to the defendants' requests for further information which had also been served in August 2011. The parties convened before the court on 5 March, with a 2½ hour hearing listed. I had thought that this would be sufficient to deal with everything, but the claimants pursued an application for a split trial, in between liability and quantum. In a judgment which I gave, I rejected that application for the reasons contained in that judgment. There was little time left on 5 March to deal with electronic disclosure, so it was that I fixed 8 March 2012 for a hearing, again for three hours in the afternoon, to deal with what I hoped was going to be the balance. Obviously the court has been too optimistic, because all that hearing was taken up with were other matters, including the question of amendments to the Particulars of Claim and other matters, including one issue about custodians on the claimant's electronic document search. I made it clear at the meeting before the court that it was vital that the parties progressed with the electronic disclosure exercise. At pages 67 to 69, going into page 70, of the transcript, I made it clear that irrespective of whose fault any delays in reaching agreement was, as follows: "We have either to get agreement or to get a very finite list of things that are not agreed. Things like the thing we have just dealt with, the two people, a fairly simple point." Mr Goulding QC on behalf of the claimants accepted that this was right, and that they were content to sit down and to try and reach agreement. He said this, doubtless, on instructions: "An enormous amount has been done by the claimants' solicitors in the period since then [that was some time before] until now to agree a substantial amount of material." What I said in response to that is that I wanted to get this: "... sorted out not much later of Tuesday of next week because disclosure has got to start. I am sure both parties, subject to the points you have made about the possible inconvenience of a hearing in January next year, are very keen to get these matters on. What I do not want is this to be derailed by arguments that run and run and run about electronic disclosure." I made it clear that I wanted solicitors and counsel, if necessary, to meet the following day, and I was told that that was going to happen. Indeed, it did happen, on Thursday 8 March 2012, the following day. It is clear that a substantial measure of agreement was reached, although there were clearly defined areas of disagreement. Thus it was that we got to Wednesday of last week, and how the court and the parties have got to where they are today. It seems to me, having set that history out, that it is necessary to consider whether the exercise of the court becoming involved in making decisions on electronic disclosure can go ahead. I have absolutely no doubt that it can go ahead. I say this primarily for this reason that the claimants have known for a very long time now that the court was anxious to resolve any outstanding issues. There is an agenda from which the court can work, which is the draft order produced by Mr Tozzi QC on behalf of the defendants, which identifies those substantial areas which have been agreed between solicitors and those relatively few items that have not been agreed. It does not seem to me that that should prove difficult. Certain it is that the claimants have had more than enough time to take instructions from their clients. As I have said before, I do not see that the fact that Herbert Smith have come on board as new solicitors only yesterday, should make any difference because first the claimants instructed Herbert Smith with their eyes open, knowing that these matters were still up in the air. Secondly, and as importantly, the claimants have still retained Bird & Bird, who are the solicitors who have detailed knowledge of the scope and extent of what it is that can and should be provided by way of disclosure. A substantial measure of agreement has been reached and it would be a waste of resources and a waste of cost, if the work that the former solicitors did was not capable of consideration. I was assured on Wednesday that instructions would be received by midday yesterday, and I have no reason to believe that they could not have been obtained by then, on all the outstanding matters in issue. Whether in fact instructions were given and whether Herbert Smith have had time to take them on board, I know not, but that there was an opportunity to give and secure instructions is absolutely clear. A number of points have been forward by Mr Ciumei which are referred to in the letter received late yesterday evening from Messrs Herbert Smith. The first point (from the letter) is that: "It is clear that the disclosure exercise is a potentially massive one. The burden on the claimants is substantially, very substantially, greater than the burden on the defendants, albeit that the defendants' electronic disclosure will certainly not be a trivial undertaking." The point is made that there is a very substantial amount of further material or material, rather, to consider, and they, Herbert Smith, are anxious to ensure that a sensible basis for disclosure is worked out and preferably agreed. It seems to me that that is the very exercise which Bird & Bird had been working on, apparently extensively, for the last six or seven months. It does not seem to me, therefore, to be a good point. Whilst the disclosure may be massive, nonetheless it is an exercise that must be done and is an exercise which the claimants have been aware for a very long time that they must focus on and provide an appropriate level of disclosure. There is then a discussion in the letter about the range of storage devices. Again, the point they make is: "...device services, servers and other services are located in a number of jurisdictions. It is not clear to us the extent to which the parties have considered the data privacy regimes prevailing in those jurisdictions and discussed how any matters are to be addressed. This too would appear to need a short period of time for reflection." This is the first time, as far as I am aware, that the claimants have raised data privacy regimes existing in Cyprus and possibly Frankfurt as a material matter for consideration. Certain it is that Mr Wayne did not raise it in his witness statement. He was making it clear that there should be no problem in providing disclosure in Cyprus and in Frankfurt. Again, that is not something which it seems to me, is a good reason to put forward for deferring resolution by the court. Then, slightly surprisingly, a point is raised in relation to EA. It is said: "Although she was a director of CIF and Phaestos at material times all of her e-mail traffic concerning the matters at issue was conducted using an e-mail address at IKOS AM entity, which entity is not a party to the actions. In fact, we are instructed that the position is that all of Ms Ambrosiadou's e-mails concerning the matters at issue in these actions, together with all other business and personal matters are on the IKOS AM Limited e-mail account, which is located on a server not owned by any of the parties to the actions." This is a point that apparently had been raised a year or two before as a possible point in relation to the disclosure exercise on the Ho action, but is certainly not a point that was raised until Herbert Smith's letter, by Bird & Bird, between August 2011 and February or March 2012. It is said by Herbert Smith, again doubtless on instructions, that because of this, they need time to see if ways can be secured by which EA's e-mails can be made available. Apparently, instructions would be required from IKOS AM Limited to ensure or secure that this was done. Again, I do not see that this is a valid reason for postponing the court's resolution. If it be the case that EA's e-mails are on a server owned by a different company within the group, then there will have to be the clearest explanation by way of witness statement as to why e-mails from that server are not disclosed. The order which the defendants seek does talk about the documents being provided from particular e-mail servers, and it does talk about e-mail servers within the control of the claimants. If it is to be said, in answer to any order which the court may make today, that these servers are beyond the control of CIF or the other two claimants, then that will need to be supported by a witness statement. It seems to me that the only person who could sensibly give that statement is Ms Ambrosiadou herself. I will make an appropriate order when I come to dealing with the order as to the date by which any such objection can be taken. The court will then have to resolve any issue that arises. I have indicated an argument, although I will not make an order today, that if there is an issue about this it may well be that Ms Ambrosiadou will have to attend and tender herself for cross-examination, albeit on an interlocutory basis.I will not make an order about that today. Next, it is said that there is other electronic documentation and it is said: "There is a troubling structural issue as to the extent to which the draft order describing the scope of the claimants' search identifies a positive obligation on the claimants to search for categories of document which, by implication, the defendants consider are or may be relevant." They go on to identify the potential danger of a disproportionate burden being put on the claimants in relation to these other electronic documents. That is a matter that can be dealt with when looking at each of the class of electronic documents which are searched. Then we come to the search terms. Another point relates to linkages, but there is likely to be some agreement about that in terms of, I am told, about linking word ranges between the parties. I reject the approach put forward by the claimants. Another major reason for refusing the claimants' application, in effect, to extend the time for agreement of electronic disclosure protocol is that, on the timetable put forward by Messrs Herbert Smith for the claimants, that would take matters to mid-April 2012, at which stage there could well be disagreement between the parties. That would be very unfortunate, and I do not have, or did not have, any confidence, at least, that there would be agreement between the parties by mid-April. The problem would then be that the court would have to be reconvened to deal with issues relating to electronic disclosure, and one would get to the stage where the court would have to issue an order in the second half of April, and that would or could well seriously impact on the ultimate disclosure date, the long-stop date identified by Mr Justice Ramsey of 2nd July 2012. If that went, then the whole timetable is at risk, because the experts, for instance, would need to review substantial elements of the electronic disclosure; witness statements might well be dependent on large parts of the electronic disclosure; and there is the very real potential for delay to the trial date. Therefore, the giving of any further time beyond dealing with matters today is one which the court does not want to run the very real risk of, and therefore the real fear of serious delay and disruption to the trial programme is another major reason why I am not prepared to give the parties yet more time to seek to agree the electronic disclosure protocol. What I want to do now is move on and do what I said should be done today, which is to look at the order and make the appropriate orders. I will hear the parties at the end of today about the costs that have been thrown away by the first 2½ hours today. [There then followed argument about the scope of electronic disclosure] I will now give my ruling on the orders that should be made in relation to electronic disclosure. In relation to the electronic disclosure to be made on behalf of the defendants, there is substantial agreement, subject to one typing error, which has been agreed between the parties. I propose, therefore, to say no more about that, other than that will be the order which the court will make. So far as the order relating to electronic disclosure by the claimant, surprisingly, when the court embarked on this exercise, Mr Ciumei, on instructions, indicated that he was unlikely to say much in opposition to the order that was being sought. He has, however, helpfully contributed on several matters which have led to the withdrawal or changing of parts of the proposed order. I am satisfied that the order now proposed, as amended during the course of submissions by Mr Tozzi QC and by Mr Ciumei, is an appropriate order to make. It is of course within documentation, or locations where documents are maintained or retained, and to documents in the possession or control of the claimants. I have already indicated that if there is to be a declining, on the part of the claimants, to provide disclosure of the e-mails to and from EA, which are on a server said to be held by IKOS AM Limited, then I will require, and it will go in the order, that no later than midday on 26 March 2012 a witness statement is filed with the court and served on the claimants from EA (at least, if not also from others) explaining precisely what the position is and why she or others cannot secure disclosure of those relevant documents otherwise disclosable documents on that e-mail account. It seems to me that that is a proportionate thing to do, because it is clear, from everything I have heard in this case so far, that EA has a substantial measure of control, either directly or indirectly, through trusts, other companies or otherwise, over the IKOS Group. She is the chief executive of IKOS CIF Limited, she clearly has had connections with the other two claimants, and she certainly appears to have a detailed involvement with the workings of other members of the IKOS Group companies. She is the one, it seems to me, who is likely to have the greatest understanding of matters relating to why disclosure of her e-mail account should not broadly be given within the parameters of the electronic disclosure order. That should not be a difficult exercise for her. Indeed, I hasten to say that Messrs Herbert Smith, although they by no means promise that the disclosure of the IKOS AM e-mail account in the name of EA, that it will be disclosed, nonetheless, they make it clear that, at least by inference, there is a reasonable prospect that that is feasible. I can understand that it might take a little bit of time to set up, and it seems to me that ordering that a witness statement be served from her on or by 26 March, which is ten days from now, is a reasonable and proportionate thing to do, and so that will go in the order as well. (There then followed discussion on costs) It is agreed that the costs of, and occasioned by, the claimants' application earlier today should be borne by the claimants in any event. The only issue is whether it should be on an indemnity basis. I am wholly satisfied that this is an appropriate case for an indemnity basis. The court has made it clear, on at least two previous occasions, and probably more, that the question of electronic disclosure and any issues arising out of it were to be dealt with at the latest by the end of this particular week, preferably earlier. Earlier orders talked about getting it resolved on or by 5th March 2012. The claimants and their solicitors, collectively, have had more than enough time to "get their act together" on this, and whilst I do not suggest, and certainly do not imply, any criticism at all of the claimants' new solicitors, Herbert Smith, who came on the record only yesterday, needing some time to, as I have said before, "get their feet under the table" and seek to understand what is involved with the electronic disclosure process, it does seem to me, as I have said before, that the claimants changed solicitors with their eyes open, and they must have known that, by doing so, they were likely to bring about a disruption to the progress required by the timetable. That is coupled with the fact that they still retain Bird & Bird, who have done an enormous amount of work on the electronic disclosure exercise and have been extremely helpful in reaching a large element of agreement between the parties; I have no doubt that, if they had been permitted to have yet further discussions, there would have been even more agreement. I couple that with the fact, and I regard this as extraordinary, that, once it was clear that the court was going ahead to resolve any issues on the disclosure issue, the claimants, through counsel, have made it clear that they do not have any particular comments that they wish to press before the court today. So, in a sense, the application to adjourn has been a complete waste of time, not only of the court's time, which is perhaps less important, but of everyone else's time and cost. In my view it is quite clear that the claimants have put their solicitors and counsel in an impossible position today by requiring them to take a wholly unreasonable stance to seek yet further delay and disruption to the timetable. I have been assured now on three occasions by counsel for the claimant that there is no intention, and never has been any intention, on the part of the claimants, and certainly not of solicitors and counsel, to delay and disrupt the timetable and the process. Yet on each of the three occasions, and possibly more, the claimants have sought to do just that. I have made it clear that, absent good reason, the timetable set by the court, by Mr Justice Ramsey as long ago as early December 2011, should be kept to, unless there are good supervening reasons why not. Therefore, this is a case for indemnity costs.

COURT OF APPEAL FOR ONTARIO CITATION: R. v. Judd, 2018 ONCA 724 DATE: 20180831 DOCKET: C63789 Watt, Huscroft and Fairburn JJ.A. BETWEEN Her Majesty the Queen Respondent and Randall Judd Appellant Lauren M. Wilhelm, for the appellant Kevin Wilson, for the respondent Heard and released orally: August 24, 2018 On appeal from the conviction entered on June 22-23, 2015 and the sentence imposed on December 2, 2016 by Justice Dale Parayeski of the Superior Court of Justice, sitting without a jury. REASONS FOR DECISION [1] The appellant appeals a sentence of three years imposed upon him after a plea of guilty to a count of production of marijuana. He was also found guilty of possession for the purpose of trafficking in the same controlled substance and ordered to serve a concurrent sentence of imprisonment of six months. [2] The sentence for production was imposed on a joint submission after the trial judge rejected a challenge to the constitutionality of the applicable minimum punishment provisions of s. 7(2)(b) of the Controlled Drugs and Substances Act. [3] In this court, the parties are ad idem that the subsequent decisions in R. v. Vu , 2018 ONCA 436 and R. v. Tran , 2017 ONSC 651 are dispositive of the constitutionality of the applicable punishment provisions. It follows that the trial judge’s decision in this respect was wrong and we are left to determine the fitness of the sentence imposed. [4] Before dealing with the issue of fitness, something should be said about an issue raised at first instance and discussed briefly by counsel in this court. That issue concerns the meaning to be assigned to the term “plants” as it appears in the punishment provisions of s. 7 of the CDSA. [5] In our view, it is unnecessary for us to decide this issue on this appeal. There is no question that this was a sizable grow operation consisting of both plants and clones. Whether the clones are considered as “plants”, despite the absence of evidence that there were roots attached to them, or whether they only become “plants” if there are roots attached to them, need not be decided in this appeal. [6] In this court, Mr. Wilson, with commendable fairness, acknowledged that a two-year sentence would also be fit. [7] In light of the pre-sentence custody for which the appellant received no credit at trial, his plea of guilty, the significant period on pre-trial release, including several months of house arrest, and in spite of the appellant’s lengthy criminal record, we are satisfied that the ends of justice would be met by reducing the sentence imposed at trial to a term of two years. [8] In the result, leave to appeal sentence is granted, the appeal is allowed and the sentence is varied to a term of two years on the production count. The concurrent sentence of six months on the conviction of possession for the purpose of trafficking remains, as do the ancillary orders made at trial. “David Watt J.A.” “Grant Huscroft J.A.” “Fairburn J.A.”

Mr Justice Burton : This has been the hearing of the claim by the Claimants, the owners of the ship Ariela (whom I shall call "Ariela"), against the owners and/or demise charterers of the dredger Kamal XXVI and the barge Kamal XXIV (whom I shall call "Kamal"). Ariela were previously defendants to a claim brought by Kamal, arising out of a collision between the vessel Ariela and the barge Kamal XXIV, said to have caused the barge itself to collide with the dredger Kamal XXVI, with the alleged result of causing substantial damage to both barge and dredger, leading on to very considerable consequential loss. A claim was made by Kamal for US$1,296,583 (consisting of US$681,423 repair costs, and US$484,584 for loss of use, in respect of the dredger and US$65,139 repair costs and US$62,600 towage and loss of use in respect of the barge) plus 1% 'business disruption' or 'agency', plus interest and costs. Kamal obtained judgment, in the event, after a quantum hearing lasting eight days before me between 20 and 30 January 2009, in the total sum of US$6,245, a recovery of less than 0.05% of their purported claim. I refer to my judgment, dated 10 February 2009 [2009] EWHC 177 (Comm) for the full history and picture: I do not intend to repeat all of what I said, and found, in that judgment, but I treat it as effectively incorporated into this judgment: suffice it to say that I referred, in paragraph 4 of the judgment, to a "startling picture of wholesale jettisoning of the vast majority of the claim, which was so substantially overblown". The collision occurred on 30 April 2004. A demand for security was made in a sum of more than US$1.3m in May 2004, which was subsequently provided by way of a collision undertaking. Proceedings were not issued until 24 April 2006 and, as is usual in the Commercial Court, there were split hearings as to liability and quantum. After a two-day hearing before David Steel J, he concluded that Ariela was 100% at fault in respect of the collision, giving judgment in Kamal's favour, and, by an agreed order, sealed on 31 October 2007 ("the Liability Costs Order"), Ariela were to pay Kamal their costs of the action to date, to be subject to a detailed assessment on the standard basis if not agreed, with an order for an interim payment on account by Ariela to Kamal in the sum of £65,000, payable within 14 days, which sum Ariela duly paid. In the light of the evidence as it came out, prior to and during the quantum hearing, although I gave judgment for Kamal in the sum referred to of US$6,245, I ordered Kamal on 10 February 2009 to pay Ariela's costs of the quantum hearing, to be assessed, on the indemnity basis, and made an interim order for payment on account by Kamal to Ariela of the sum of US$325,000, payable within 28 days. None of that sum has been paid by Kamal. As presaged by Mr Hill QC, who appeared then, and before me now, on behalf of Ariela, in his closing submissions (see paragraph 4 of my judgment), Ariela have subsequently sought to set aside the Liability Costs Order as obtained by fraud. They issued an application in the original proceedings, and subsequently also issued separate proceedings by way of an action to set aside the Order, insofar as such might be necessary in the light of such authorities as Flower v Lloyd [1877] LR 6 Ch. D. 297 (CA) and Kuwait Airways Corporation (The Iraqi Airways Co and Another (No 2)) [2001] 1 WLR 429; and the application and the separate proceedings have been consolidated, such that the amended statement of case stands in the consolidated proceedings. As I set out above, Kamal have not complied with the order of 10 February 2009. They issued an application on 17 March 2009 to strike out Ariela's fraud claims, and, by order dated 29 April 2009, I directed (on Ariela's application) that Kamal should not be permitted to proceed with any such application unless and until they had complied with that order: permission to appeal my order of 29 April 2009 was refused by Aikens LJ on 18 June 2009. Subsequently, Kamal failed to serve an amended Defence, or to give any disclosure, notwithstanding Orders on 12 May and then 29 June and, finally, an Unless Order, made on 21 September 2009, and, on 5 October 2009, were debarred from defending the claims as set out in the amended Statement of Case. The case was listed for hearing on 2 December 2009, and, notwithstanding notice of the hearing to Kamal, Kamal did not attend by Counsel or otherwise, nor has there been any attempt to appeal or set aside the order of 21 September 2009, or to comply with it, nor have any of four outstanding costs orders in favour of Ariela (for £2500 on 18 December 2008, US$325,000 on 10 February 2009, £9000 on 29 April and £12,000 on 21 September 2009) been complied with. I heard oral evidence on 2 December 2009 from two witnesses in respect of whom witness statements had been served, Mr Russell Ridley, Ariela's solicitor, and Captain Gunnar Falck, the Senior Claims Handler and Adjuster for the Norwegian Hull Club ("NHC"), which provided the security, and has been substantially responsible for the proceedings arising out of the 30 April 2004 collision; and I heard submissions from Mr Hill QC, whose skeleton opening was also served upon Kamal: and I have considered, or reconsidered, a considerable number of documents in the substantial bundles put before me, as well as carefully re-reading my earlier judgment. Ariela's primary claim is to set aside the Liability Costs Order made by David Steel J and for me to substitute an order that Kamal pay Ariela's costs of the entirety of the original action on the indemnity basis, with an interim order providing for payment on account of such costs. Ariela's alternative basis of claim is for damages for Derry v Peek ...[1889] 14 App Cas 337) fraud; such damages would be their costs of defending Kamal's fraudulent claim, and the sum that they were required to pay, by way of interim payment on account, in respect of David Steel J's order, and there would be, consequential upon the finding of fraud, the setting aside of the balance of that order, so that they would no longer be under any continuing liability to make payment. The fraud alleged by Ariela, on which both alternative claims are based, is a very straightforward one. What occurred on 30 April 2004 was, as indeed I described in my earlier judgment, hardly worth dignifying with the definition of 'collision'. The vessel Ariela rubbed along the side of the barge, which had the knock-on effect of causing the barge to collide with the dredger. As I found, and as Ariela allege Kamal well knew, virtually no damage was caused by that collision (none at all to the barge and almost none to the dredger). Ariela allege that, fraudulently, Kamal asserted that massive damage had been done to both barge and to dredger, with massive alleged economic consequences, when they knew that such was not the case. What they did was to take the opportunity to allege that all kinds of costs (insofar as incurred at all) and losses ensued from that minimal collision, which they knew not to be the case, and in particular: i) In respect of the dredger, this was in poor condition: as set out in paragraph 5 of my judgment, it had not been in dry dock for some years, and was imminently due for its 5-year class inspection (for which a final 3-month extension to 2 September 2004 had only just been given, pursuant to a request by Mr Vishan Kewalramani ("Mr Kewalramani") on 18 April, only 12 days prior to the collision). This was a 'heaven-sent' opportunity to get all and any necessary repairs done at the expense of Ariela. ii) In particular, substantial damage had been done to the dredger on or about 1 March 2004, which Kamal had been alleging was the responsibility of Mormugao Port Trust (see in part paragraph 26 of my judgment), but which now was to be alleged to have been the responsibility of Ariela. iii) The barge itself was (it became common ground by the time of the quantum hearing – see paragraph 40 of my judgment) in very poor condition prior to the incident, such that, as I concluded, it was simply a heavily-used working barge (paragraph 16 of my judgment), the restoration of which Kamal took the opportunity to seek to charge up to Ariela. This, Ariela submits, was not simply opportunism. Kamal's representation, both in order to obtain the security and then consistently thereafter, in particular by reference to a purported estimate from Colombo Dockyard Ltd for works allegedly to be carried out to the dredger, and by false assertions as to loss of use, loss of hire, towage and bunkers, led to the proceedings, with a Claim Form, and subsequently Particulars of Claim, supported by statements of truth. This was followed up by witness statements, in particular by Mr Kewalramani, which I found (see paragraphs 7 to 13 of my judgment) lacking in credibility and inconsistent with the known facts. This consistent representation, that loss of more than US$1m was suffered by them as a result of the collision, was made by Kamal with knowledge of its falsity and in the absence of any genuine belief in its truth. I shall address in due course the precise legal basis for the two alternative claims, but suffice it to say that, so far as relates to the Derry v Peek claim, given that Ariela's claim is in respect of all its costs incurred in respect of defending the proceedings, the false representations must be established prior to commencement of those proceedings (even though that fraud may be further evidenced by what continued thereafter), while their case that the Liability Costs Order was procured by fraud is obviously not so limited. The issue in that regard, as most succinctly expressed by Bracewell J in S v S [2003] LR Fam 1 at paragraph 6, is that "the Court … would not have made the order if the true state had been known". The Context The background to my findings as to fraud, set out below, is as follows: i) There was a very substantial absence of disclosure by Kamal in the earlier (quantum) proceedings. This, coupled with the fact that disclosure as to quantum is ordinarily not relevant while liability is resolved, in the case of a split trial, enabled Kamal to hold off until the very last minute (despite Unless Orders) and in any event even then to fail to give at any time, disclosure of documents which would reveal the fraud. I pointed out the material non-disclosure in my judgment, inter alia at paragraphs 5, 13 and 16. The failure, in breach of Unless Orders, was, and has remained, particularly significant in relation to: a) the condition of the dredger (and its maintenance, or lack of it) prior to 30 April 2004, and correspondence with Class, over and above the minimal and belated disclosure given just prior to the quantum hearing, which itself revealed the fact that (contrary to what Kamal had previously said, e.g. to Captain Pang on behalf of the NHC in July 2004), the dredger was overdue for dry docking, and had reluctantly been given by Class a final extension to 2 September 2004. b) the repairs that were carried out to the dredger (referred to in paragraphs 13 and 16 of my judgment) and again any correspondence with Class in that regard. c) the damage caused to the dredger in March 2004 in Mormugao Port (paragraphs 36-37 of the judgment) which does appear, from such minimal information as Ariela has been able to find out through the services of their investigator Captain Ogg, to have borne a striking similarity to the damage said to have been caused by the collision some seven weeks later. In the absence of disclosure of any such documentation in the original proceedings, which inevitably gave rise to provisional conclusions as to the reason for the withholding of such documentation, and as to what would be likely to have been revealed by its production, made it the more important for there to be such disclosure in these fraud proceedings. However, after a consent order dated 29 June 2009 agreeing an extension of time for disclosure of documents by Kamal, Kamal's solicitors Ince & Co withdrew on 7 July 2009, and then, notwithstanding the unless order of 21 September 2009, no such disclosure has been given. ii) There are so many unanswered questions with regard to the evidence of Mr Kewalramani. I refer to my very considerable concerns about his evidence, set out in paragraphs 5 to 13 of my judgment. By the time of the quantum hearing, the belated partial disclosure of a number of documents apparently devastating to Kamal's case and the fact that Kamal's own expert was not able to support the vast majority of the purported claims made Mr Kewalramani's evidence the more crucial if there were to be any justification or explanation of Kamal's surviving case. However, he did not attend to give evidence on "proportionality grounds", as described in paragraph 6 of my judgment. It is however one thing not to attend to seek to justify and explain apparently incredible and inconsistent accounts given, if the only consequence was for his company to fail in its claims. It is another not to attend and give those explanations where the allegation is one of fraud, in which his part in such fraud, as fully set out in Ariela's statement of case, is central. No positive case was pleaded in Kamal's Defence to the fraud claim, the subject of a statement of truth by Mr Kewalramani, and then, after the failure of an attempt to pursue a strike-out, which would have avoided the need for any oral evidence by Kamal if successful, Kamal has failed to comply with any orders, disinstructed their solicitors, and taken no part by way of challenging, countering or explaining the serious allegations of fraud with which I now have to deal. I had effectively reserved judgment in relation to Mr Kewalramani's role when I delivered my judgment in the quantum proceedings, because, notwithstanding what I called a "powerful indictment", Mr Kewalramani had not attended, and, in any event, the fraud allegations were then not expressly up for decision, albeit that my rejection of the massively overblown claim carried with it that inevitable inference. Now, however, Kamal and Mr Kewalramani should have been determined to have their day in court to resist my reaching of my final conclusions, which is now my task. No such opportunity has been taken, and no such explanation has been given. iii) Perhaps the strangest and most striking context relates to the identity of the owner of the dredger, and thus to the issue of whether any loss of use claim (pursued up to the quantum trial in the amount of US$484,584, and abandoned in its entirety in the course of the hearing), could ever have been honestly pursued. The owner of both vessels was asserted by Mr Kewalramani at all times, including in terms in three witness statements, his first, fourth and fifth, to be Jaisu Shipping Co Ltd ("Jaisu"). Such documents as were disclosed by Kamal, particularly those belatedly disclosed just prior to the quantum hearing, cast very considerable doubt upon this (and thus upon the existence of any loss of use claim by Jaisu), it appearing that Miller Dredging Co Inc was the owner. For that, and other reasons (to which I shall refer below, when I refer to false claims in respect of the reasons for dry docking in Singapore rather than Colombo), the loss of use claim was entirely abandoned during the course of the hearing. It is now, in paragraph 4 of the Defence served in these fraud proceedings, admitted that Miller Dredging Co Inc was the owner. The numerous inconsistent documents remain unexplained. Findings as to fraud Against the background of this absence of explanation, aggravated by the inadequacy of the disclosure and the inconsistency of the explanations or accounts given, I am satisfied as to the following matters, and draw express conclusions or inferences accordingly. Mr Kewalramani asserts in the witness statements served in the original proceedings that he personally, as technical director of Jaisu, inspected the dredger. He therefore knew, as I am satisfied, and have found in my judgment, was the case, that there was no or no material damage to the dredger caused by the collision, and certainly not the massive damage for which he, on behalf of Kamal, subsequently claimed, and which he has sought to support. In particular: i) He knew that there were no leakages of water into the tank caused by the collision (see paragraph 8 of my judgment). ii) He knew that there was no loss of grease in the lower drum caused by the collision (paragraphs 9 and 10 of my judgment). I am satisfied, as set out in paragraph 10(iii) of my judgment, that someone, on behalf of Kamal, falsified the handwritten entry to the log, in a misguided attempt to support an allegation that there was exacerbated loss of grease after, and thus resulting from, the collision, when such was not the case. Notwithstanding the alleged extensive damage, but rather, as I conclude, being indicative of its absence, the dredger was working less than 24 hours after the collision, and continued to do so for another month. I am satisfied that the dredger had been working in a damaged condition prior to the collision, not least due to the pre-existing damage caused by dredging operations in the Mormugao Port, but also due to the fact that it had been involved for 5 years in heavy dredging operations, and was overdue her dry docking survey and 5-yearly Class renewal survey. I am satisfied that Kamal saw the collision as an opportunity to recover substantial repair and maintenance costs from Ariela which were not, and which Kamal knew were not, Ariela's responsibility, and, what is more, recover for loss of use while such repairs were carried out, which would otherwise have been to their own account. In this context: i) Kamal put forward, in order to substantiate its claim and, in particular, its claim security, an estimate from Colombo Dockyard Ltd for repairs, said to be collision damage repairs, which in fact was a quotation for repairs to pre-existing damage and condition. It was dated 24 May 2004, and purported to provide a detailed breakdown of works required, but, such works not only did not correspond to the alleged collision damage, but, even if they did, could not have been known of until after removal of the dredger's lower tumbler drum, which had not yet occurred. Notwithstanding unless orders for disclosure, Kamal has failed to disclose the correspondence/requests to Colombo Dockyard which generated such quotation. ii) Kamal constantly inhibited inspection and examination of the dredger. Mr Gupte, instructed as NHC's surveyor, was refused access on 2, 3 and 5 May 2004, and only eventually allowed access on 8 May: a Mr Colaco, as surveyor instructed by the Ariela's P and I Club, was denied access on 2 May. As will appear, the dredger was, in the event, taken off, not to Colombo, but to Singapore where, after substantial works had already been carried out, Mr Kewalramani was totally unco-operative with Captain Pang when he attended as Ariela's surveyor, and then manipulated Mr Gorain, the Salvage Association surveyor. As I describe in paragraph 14 of my judgment, Mr Gorain was procured to provide a report which purported to present or corroborate a case that Mr Gorain had been in attendance from the beginning of the works, and was expressing his own view both that damage was the result of the collision and that repairs to that damage had been carried out, when in fact all he did was sign a list as presented to him. Mr Kewalramani knew that Mr Gorain could not support what was put forward in his documents, and was simply repeating what he had told him. Kamal gave a deliberately false explanation as to why the dredger proceeded to Singapore, rather than to Colombo, for repairs to be carried out. This is referred to in paragraphs 11 and 12 of my judgment. The reality is that, once Kamal learned that there was no availability for dry docking in Colombo until the middle to end of August 2004, it became clear to them that they would not be able to be sure to complete dry docking of the vessel prior to the final extension granted by the Croation Register of Shipping. It was, I am satisfied, for that reason, and not because of any lack of availability of suitable cranes, that the vessel was diverted to Singapore at an alleged cost, both in respect of loss of use, and steaming time of 25 days to and from Singapore. This meant a substantial increase of the loss of use claim against Ariela, and a considerable and fraudulent bonus to Kamal, who had thus been able to carry on using the dredger (after the collision as above), miss the dry dock time in Colombo and yet charge all that up, at a profit, to Ariela (quite apart from charging up the repairs themselves). There was a similar fabrication in relation to the barge. I am satisfied that (as indeed was conceded by the time of the quantum hearing (see paragraph 40 of my judgment)) the barge was unseaworthy prior to the collision. This again was, I am satisfied, known to Mr Kewalramani, and to Kamal. As explained in paragraphs 38 to 50 of my judgment, I was satisfied that there was no damage to the barge which could be ascribed to the collision. Mr Kewalramani alleged that two of the barge's tanks had flooded by reason of the collision, but this suggestion was rejected even by Kamal's own expert, Mr Boorman. Kamal put forward a report by UK (Marine) India Surveyors, which purported to support its case, but again those surveyors were accompanied throughout by Mr Kewalramani, the report clairvoyantly concluded that the "repairs costs [were] to be borne by the owners of the MV Ariela", and in the event Mr Buckingham, Counsel for Kamal, specifically disavowed, in the course of his opening, any reliance on such report (there is a typographical error in paragraph 3(ii) of my judgment, where the reference to Mr Hill should be to Mr Buckingham). There was another extraordinary and, in my judgment, incredible picture put forward in respect of the barge, in an attempt to seek to recover US$65,139 repair costs and US$52,600 towage and loss of use. The account given by Mr Kewalramani in his first witness statement was that, although Kandla was the nearest suitable dry dock, the barge was towed to Cochin, since the monsoon weather meant that it could not be towed to Kandla. No repairs were however for some reason carried out at Cochin, and it was then subsequently towed to Kandla, where it is said that repairs were then carried out. An invoice is produced for alleged works to the barge in Kandla headed up "Rainbow Engineering Works" and dated 3 December 2004. That invoice was said to support the claim for repairs to the barge purportedly arising as a result of the collision. Then an invoice was relied upon, but never explained, by Kamal, also dated 3 December 2004, in a sum of US$31,600. This purported to be rendered by Jaisu itself to the Master and Owners of MV/MT Topaz at Kandla for "charter hire 8 days Goa-Kandla-Goa" at US$1200 per day plus fuel consumption passage for 8 days. As to these two invoices, and the claim in general: i) The works set out in the invoice in my judgment had no relevance to any damage arising out of the collision. ii) I am not satisfied that any work was done by any third party, if such it is suggested Rainbow Engineering Works to have been, to the barge. In any event. Jaisu has and had its own repair yard at Kandla. iii) It is plain to me that the explanation given for why the barge was taken to Cochin, and then only on to Kandla later, is false. The probability is that Jaisu, which regularly operated its vessels at Cochin, as Mr Kewalramani said in his fifth witness statement, was using the barge gainfully in Cochin, and chose to take it there and continue to use it until subsequently taking it to Kandla. iv) The invoice from Jaisu to the owners of Topaz is plainly completely bogus. No tow took place from Goa to Kandla to Goa, whether for 8 days, or at the alleged rate, or otherwise, even on Kamal's case. A garbled attempt is made to explain away this document in paragraph 8.23 of its Defence. I have set out in my judgment at paragraphs 38 to 50 how it was, in fact, the case that no damage was caused to the barge in the collision. The massive claim that was put forward in respect of repairs, not to speak of the wholly invented claim put forward in respect of loss of use, is, in my judgment, as fraudulent as the claim put forward in respect of the dredger. It is noteworthy that Kamal put forward a claim within six days of the collision which was almost identical in amount to the claim eventually put forward in 2007, notwithstanding that the repairs had not been carried out and the dredger had not been inspected in dry dock. The false claim was maintained, and attempts made to find ever new ways of justifying it, until the quantum trial when, with some damaging disclosure recently made, but in particular with the searchlight finally on the reality of the claim, it collapsed as unsupportable. Relief sought by Ariela As set out in paragraph 5 above, Ariela's primary claim is to set aside the Liability Costs Order. I am satisfied that, provided there are the grounds to do so, such order can be set aside, whether it is a true consent order (viz Huddersfield Building Co Ltd v Henry Lister & Son Ltd [1895] 2 Ch 273 and Qayoumi v Qayoumi (Chancery Division 20 December 2002)) or simply an order made by the Court on the basis of no objection being made to it (Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 CA esp per Lord Denning MR at 189). In the one case, the Court will interfere in order to set aside the equivalent of a contract if there are grounds to do so, and in the other the Court will exercise its own discretion similarly. The issue is whether, as in Flower v Lloyd (supra), there has been fraudulent concealment from the Court, or, as in S v S (supra), "the Court and the parties [or one of them] have been misled as to existing circumstances, and would not have made the order if the true state had been known". In his skeleton argument to the Court of Appeal in support of Kamal's unsuccessful application for permission to appeal referred to in paragraph 4 above, Mr Foxton QC, briefly instructed at that stage on behalf of Kamal, suggested that it was a "remarkable feature" that Ariela did not allege that any evidence placed before David Steel J for the purposes of the liability hearing was dishonest evidence, nor that any evidence relevant to the issue which David Steel J had had to decide was fraudulently suppressed. It seems to me that this is irrelevant. The picture is entirely clear that, whereas, in reality, Kamal had a claim for US$6,245 or thereabouts, it put forward a wholly fraudulent claim, a wholly fraudulent valuation of its loss, of more than 200 times that amount. The fact that, as pleaded in paragraph 11.1 of Kamal's Defence to the fraud claim, none of the evidence before David Steel J was fraudulent, is not to the point: it was all adduced to present a fraudulent claim. I am entirely persuaded by Ariela's evidence before me that, had a non-fraudulent claim been put forward of a minimal amount, consistent with what actually occurred on 30 April 2004, they would have paid up in full at the earliest occasion. That is not only obvious common sense, given the commercial realities, but it is also consistent with what they did by way of making Part 36 offers, to which I will refer below. In the circumstances of a claim pursued (and, indeed, pursued notwithstanding such offers), in such a substantial amount, and particularly given that Ariela had advice that there was a prospect of reducing liability below 100% (and, given the enormous size of the claim, even a 20% reduction would be a substantial amount), I am satisfied that they had no alternative but to defend the claim, or, at any rate, that it was entirely reasonable for them to do so. I am equally satisfied that, had the Court known, as I now know, that the claim being pursued by the ordinary Commercial Court procedure of liability first followed by quantum, was one that was fraudulently exaggerated in the way that I have found, it would not have made the order that it did. The order that was made, by way of a stopping point along the way towards attempted recovery of US$1.2m - rather than, as there should have been, either no claim, at all (because, as I am satisfied, it would have been paid up in full), or a claim which I described in paragraph 2 of my judgment as "well within the jurisdiction of the Shoreditch County Court" - was procured by fraud. It resulted from fraudulent statements as to the extent of the claim and the loss, and fraudulent concealment of the true nature of the claim. There are two other aspects of the matter which were raised by Mr Foxton QC and with which, notwithstanding the fact that Kamal is debarred from defending, Mr Hill QC needed to deal in order to prove his case. Both related to whether, on the assumption, as I find, that there is jurisdiction to set aside the Liability Costs Order, on the facts of this case, it should be so set aside. The first related to whether Ariela ought to have agreed to the Liability Costs Order, or whether they had some other alternative course which they could have taken, such that it could have been said that the order was not induced by fraud, but by their own mistake. The suggestion made by Mr Foxton was that it was always open to a party who has been unsuccessful on the issue of liability to ask the judge to defer making a costs order at that stage (as pleaded in paragraph 11.3 of Kamal's Defence to the fraud claim). The only circumstance in which this would ordinarily arise would be if there had been a payment into court or Part 36 offer made during that period of proceedings when liability only was being disputed, upon which a defendant would wish to rely at a later stage, notwithstanding losing on liability, i.e. if, once the quantum were established, it became clear that it was less than the amount of the payment into court, or the Part 36 offer, made at an early stage. In such circumstances it would or could be appropriate to disclose the existence of such payment into court or Part 36 offer to the judge deciding the issue of costs on the liability hearing, thereby of course rendering it impossible for such judge to deal later with the quantum hearing, but in order to persuade such judge that he or she should reserve or adjourn the issue of costs, notwithstanding that the party has lost on liability. The history of Part 36 offers in this case is as follows: i) Clyde and Co, the then solicitors for Ariela, wrote two "Without Prejudice Save as to Costs" letters on 1 March 2005, long before proceedings were issued in April 2006. In the first letter, they made an offer to pay to Kamal the sum of US$40,000 plus interest and costs in full and final settlement of their claim, with a statement that Ariela were prepared, in accordance with Part 36 Rule 10, to make payment into court within 14 days of the service of any proceedings (although they clearly did not in the event do so). By the other letter, also without prejudice save as to costs, Ariela offered to accept 70% of the liability for the collision. ii) Once proceedings were commenced, two without prejudice save as to costs letters were again sent by Mr Ridley, now at Russell Ridley & Co, both on 6 September 2006. The first offered to settle liability in the percentages 80/20 in favour of Kamal, together with costs in accordance with that percentage. The second letter offered "to settle quantum as follows. [Ariela] will pay their liability percentage of [Kamal's] loss and damage, based on a global award of damages in the sum of US$250,000 excluding interest and costs. The liability percentage is [Ariela's] percentage of fault for the collision either agreed between the parties or assessed by the court … This offer supersedes our pre-action Part 36 offer … which remains in place until this offer becomes effective". It can be seen therefore that the only effective Part 36 offer which remained in place at the date of the Liability Costs Order was one which was expressly predicated upon there either being a trial of the liability issue, or an agreement of an 80%:20% split. It is clear that this would not have been of any assistance to Ariela in persuading the judge not to make the ordinary order in respect of the liability costs. They had not made an unconditional Part 36 offer or payment in in respect of US$250,000, or even US$200,000 (being 80% of US$250,000). It had been necessary, and justified, on the face of it, for Kamal to continue on to resolve, and win, the issue as to liability. I am accordingly satisfied that, even had Ariela turned its mind to such a possibility, and there is no evidence it did, it would have availed them nothing. If there were some suggestion (none being made) that in some way Ariela ought to have made an unconditional Part 36 offer which might have protected them, that would, in my judgment, not amount in any way to an answer. Contributory negligence (if such it could be) is no defence to a fraud claim (Edgington v Fitzmaurice [1895] 29 Ch D 459 at 481, 483 and Clerk and Lindsell on Torts (19th Ed 2006 para 18.34). The fact is that there was no such offer, and Ariela entered into the Liability Costs Order believing that it had no alternative. The other argument that was raised on Kamal's behalf is set out in paragraphs 11.4 and 12.2 of its Defence, which again I consider because it is proper to do so, albeit that Kamal has been debarred from defending. The point is expanded in Mr Foxton's skeleton before the Court of Appeal at paragraph 5(4) as follows: "Ariela … jointly proposed the form of costs order made, and did so in the following circumstances (as confirmed by Ariela's Counsel to Mr Justice Burton during submissions on 10 February 2009, when explaining why Mr Justice Steel was not asked to reserve the costs): (a) at the end of the day, we well had in mind this application [the fraud claim] at that time … (b) Ariela decided not to ask Mr Justice Steel to reserve costs because if such a request was made Ariela's Counsel was "going to have to say because this was a fraudulent claim" … (c) Ariela stated that, if asked by Mr Justice Steel why costs should be reserved, Ariela's Counsel "would then have to say, well, it is not because – it is not on the basis of our previous Part 36, it is on the basis of fraud …"" This is indeed an accurate, though slightly garbled, account, taken from the transcript of part of the discussion when I ordered indemnity costs in favour of Ariela after the quantum hearing, of what Mr Hill then said. Mr Ridley gave evidence before me in relation to this, and I have heard submissions from Mr Hill QC. The position is entirely clear, and is consistent with those extracts, albeit that they were extempore comments. Mr Hill QC and Mr Ridley accept that the only way, in which it might have been possible, given the unavailability of any Part 36 argument, to persuade David Steel J to reserve or adjourn the costs, would be if Ariela had been able to submit, and had, at that stage, submitted, that the claim (in respect of which they had already made, and would obviously have had to reveal in such circumstances, an offer of at least US$200,000) was fraudulent. Although it is plain that, from the very first time that Mr Ridley (then at Clyde & Co) was instructed, he had his suspicions about the claim – and he has disclosed his letter to NHC dated 27 October 2004, referring to what he described as "this over-exaggeration of the claim … in biblical proportions", neither he nor Mr Hill QC were in a position to suggest fraud in open court at that stage. It would plainly not have been proper to do so. Not least because of the total lack of disclosure at that stage in respect of quantum, and because investigation as to quantum was inevitably, by virtue of the split trial, at a very early stage, I accept that Mr Hill QC could not have said then what he professionally felt able to say by the time of the quantum hearing itself, as the experts instructed on behalf of Kamal hastened to distance themselves. This is just the very difficulty in which a defendant is put by the making of a fraudulent claim. The reality of the plea in paragraphs 11.4 and 12.2 of Kamal's Defence, and in the paragraph I have cited from Mr Foxton QC's skeleton argument, is the implied assertion that, at the time of the making of the Liability Costs Order, Ariela knew of, or knew sufficient of and/or waived, the fraud. I am satisfied that is not the case. The transcript passage is plainly explicable by reference to the fact that Ariela at that stage only had suspicions, and were in their own mind reserving the right to sue to recover back what they were having to pay out, if fraud could ever be proved. Accordingly, in respect of Ariela's primary remedy, I conclude that it is appropriate and necessary to set aside the Liability Costs Order. I have no doubt whatever that the proper course is to replace it with a similar indemnity costs order in favour of Ariela as I made after the quantum hearing. I am satisfied that this was a fraudulent claim from the outset, and is properly marked by indemnity costs, and that, had the court known on 31 October 2007 what I now know, that is the order which it would have made. Such costs, on an indemnity basis, should be the subject of a detailed assessment if not agreed. I am asked to make an interim payment. An early draft of Ariela's bill of costs for the liability trial came out at a figure of US$324,794.08. Mr Ridley's law costs draughtswoman has now produced the final bill of costs, as being not the sum which Ariela has paid to Clyde and Co and/or Russell Ridley (solicitor/own client basis), but the lesser sum which the costs draughtswoman concludes is reasonably recoverable. That sum is US$341,695.94. The sum that was payable, and paid, by Ariela to Kamal by way of interim payment in respect of Kamal's liability costs, was £65,000, which, according to paragraph 21(b) of the Amended Statement of Case, is the equivalent of US$135,656. I see no reason, however, why, given what I have seen as the final bill in relation to Ariela's costs, I should not make what, in some circles, has become a conventional order, of 50% of Ariela's bill of costs by way of interim payment on account. Accordingly, I set aside David Steel J's order, I substitute the order for costs which I have mentioned above, together with an interim payment of US$170,000, and I give judgment for the return by Kamal to Ariela of the sum of £65,000 paid over on 14 November 2007, together with interest since that date. In the light of the considerable doubt raised as to the identity of the Claimant, I give judgment against Jaisu, which was the company which at all times represented itself as the Claimant and owner of both the dredger and the barge, and against the Claimant as per the title of the original action, namely "The Owners and/or Demise Charterers of the Dredger Kamal XXVI and the Barge Kamal XXIV". Derry v Peek I turn to the alternative remedy sought by Ariela. This is, as described in paragraph 5 above, a claim for Derry v Peek damages. In Mr Foxton QC's CA skeleton he presented an argument by reference to Grainger v Hill (1836) 4 Bing NC 212, as addressed by the Court of Appeal in Metall und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc [1990] 1 QB 391 at 471 per Slade LJ: "Relief in tort under the principle of Grainger v Hill is not, in our judgment, available against a party who, however dishonestly, presents a false case for the purpose of advancing or sustaining his claim or defence in civil proceedings." Mr Hill QC does not challenge this proposition, but Mr Foxton QC appears not to have appreciated, or perhaps to have discounted, the fact that the claim here is one in deceit. He predicates his reference to Grainger v Hill with the statement "it does not appear to be any part of Ariela's case that it acted in reliance on the truth of any representation allegedly made by Kamal as to the value of its claim", referring to the transcript passage which I have discussed in paragraph 27 above. For the reasons I then set out, this is misconceived. In my judgment, this is a straightforward Derry v Peek claim. Just as Kamal intended, Ariela was driven to take the biblical loss seriously, and resist it, at very considerable cost. The reality is again quite simple, in my judgment. If a non-fraudulent claim had been put forward, it would have been paid in full. Because there was a fraudulent statement as to the value of the claim and loss, and induced by that deceit, Ariela were driven to lay out very substantial sums by way of costs to defend the liability claim, and to submit to the Liability Costs Order. All those losses were directly caused by the fraudulent mis-statement as to the quantum of the claim. As the Editors of Clerk and Lindsell (loc. cit) state, at 18-34: "It is no answer to an action for deceit that the claimant might have discovered the falsity by the exercise of ordinary care: it does not lie in the mouth of a liar to argue that the claimant was foolish to take him at his word." The loss sought flows directly from Ariela's reliance upon Kamal's statement that the sum claimed was a bona fide valuation of the loss caused by the collision. But for the deceit, Kamal would have presented a claim which would have been paid. There is no room in deceit either for the concept of contributory negligence or of a failure adequately to mitigate (Clerk and Lindsell (loc. cit) at 18-42), but in fact, even if there were, it is difficult to see what else Ariela and its advisers could have done. They constantly sought disclosure of documents, which were fraudulently concealed from them, and even the offer of what turns out to have been in some 40 or 50 times the real value of the claim was contemptuously rejected without counter offer. The loss and damage flowing from the deceit would be the interim payment made pursuant to the Liability Costs Order of £65,000, plus the costs incurred by Ariela referred to above (and there would need to be the consequential setting aside of the Liability Costs Order, so that it could not be suggested that there is any continuing liability thereunder). There would then need to be consideration of whether there would be any offset against that sum of damages. I am satisfied, as I have found, that, had an honest claim been put forward by Kamal, Ariela would have paid it. That does not necessarily mean that all Kamal would ever have put forward was the sum of US$6,245, which alone I found justified. Because they have been debarred from defending, Kamal are not here to put forward a case as to what they might have been able properly to put forward, had they not created a fraudulent claim, as they did. One possible answer might be that they could properly and non-fraudulently have put forward those claims which they did not abandon as unarguable during the course of the quantum hearing, totalling (including the US$6,245) US$26,030 (see paragraph 2 of my judgment). I am satisfied that, had a proper sum been claimed at the outset, it would have been paid up on the usual commercial basis without any interest or legal costs, because no lawyers would have become involved, but there might have been some small professional costs on top. Accordingly, if I were to have given judgment by reference to the Derry v Peek claim, which I would have done, but for my making the orders I have in respect of Ariela's primary claim, then I would or might have offset some US$30,000 from the total cost inclusive of the costs bill. As it is, I have dealt with the Derry v Peek claim only by way of completeness, and my judgment is as set out in paragraph 33 above.

Lord Justice Sedley : The facts of this case are short and disturbing. The appellant is a 26-year old Tamil woman whose family home is in the Jaffna Peninsula, where the insurgent LTTE has long been active. In November 2006 she was raped in her home, which was also her father's grocery shop, by two Sri Lankan soldiers who used to make purchases there. Five days later one of them returned with another soldier, and both of them raped her. A week or so later the same two returned and again raped her, on this occasion holding her father at gunpoint so that he would witness it. The appellant later tried to kill herself by pouring paraffin over herself and setting light to it. She failed, but her father took her to the home of her uncle with a view to her fleeing the country. This she was eventually able to do, but not before she had found herself pregnant and then miscarried or aborted. In the interim the soldiers had returned to her home, looking for her. The Home Office refused to grant the appellant leave to remain either as a refugee or on humanitarian grounds, but on appeal IJ Courtney held that she was entitled both to asylum and to humanitarian protection. This determination was overset for error of law by SIJ Gill, who in a decision dated 7 December 2007 went on to redetermine the case against the appellant on both asylum and humanitarian grounds. Although it was sought to challenge the oversetting of IJ Courtney's determination, permission to appeal on this issue has been refused. Following an enlargement of time accompanied by a refusal of permission by Scott Baker LJ, Moore-Bick LJ on renewal granted permission limited to a challenge to SIJ Gill's approach to the legal effect of the rapes and their consequences. Moore-Bick LJ, giving judgment on 10 June 2008 on the renewed application, considered, in summary form, the reasoning at §§14, 15 and 19 of SIJ Gill's determination – to which I shall return – and said: "11…….Mr Morgan submits that that somewhat brief treatment of the issue does not do proper justice to the law set out in Horvath, because it pays scant regard to the position of the applicant and the ability of the authorities to provide her with substantive protection against further assaults of that kind. Moreover, he submits that the findings made by the Senior Immigration Judge in §15 and 19 are not properly reasoned and are not based on evidence before the tribunal. In particular, he suggests that the conclusion in § 19 of the decision that the government can and will provide sufficient protection  is based almost entirely on the decision in LP (Sri Lanka) CG [2007] UKIAT 00076, which no longer properly reflects the state of affairs on the ground in Sri Lanka. 12. In the light of the findings made by IJ Courtney, which in many respects were not challenged on reconsideration, I am satisfied that there is sufficient force in the last submission to make it appropriate to give permission to appeal in this case, limited to those grounds." Moore-Bick LJ then heard counsel on the amendment of his grounds, and made an order that they be amended to add the ground set out in paragraph 4 of an application to amend which had been submitted on the day of the hearing. That ground reads: "SIJ Gill, in her reasoning (paragraphs 14 to 21), made two legal errors: (1) she purported to make findings of fact outside her jurisdiction, regarding the future prospects of the appellant in Jaffna and/or Colombo, when such facts formed no part of the evidence in the appeal (paragraph 15), and (2) she purported to derive such facts, contrary to the findings of IJ Courtney, from a tribunal country guidance case, LP (Sri Lanka)[2007] UKAIT 00076 (heard on 27 and 28 November 2006) which, on 25 May 2007, IJ Courtney had evidently considered overtaken by the continuing collapse of the ceasefire between the LTTE and the Sri Lankan government (paragraph 19)." In opposition to Mr Morgan's skeleton argument seeking to make good these grounds, Ms Olley for the Home Secretary makes two straightforward submissions: first, that SIJ Gill permissibly found that the appellant, if returned, would no longer be at risk from the rogue soldiers who had raped her, with the result that the question of state protection did not arise; alternatively, that the SIJ was right to follow the country guidance in LP, a relatively recent case, in finding that there would be sufficient state protection. She submits that LP has now been effectively endorsed by the European Court of Human Rights in NA v United Kingdom (17 July 2008). It remains the case, for reasons that will appear, that the single amended ground of appeal is largely off target. But in my judgment sufficient is now pleaded to sustain what has emerged as the appellant's true case, and Ms Olley, in the best tradition of Treasury counsel in asylum and human rights cases, has not sought to put unnecessary obstacles in the appellant's way. The key passages of SIJ Gill's determination for present purposes are these: 15. Mr. Hourigan relied on the fact that the Appellant had been raped three times in the past, albeit by rogue soldiers. This does not assist because it is tantamount to suggesting that anyone who has been the victim of a crime in the past is reasonably likely to be at real risk of persecution by the Sri Lankan authorities. Given that it was accepted that the Appellant was raped by three rogue soldiers, the Appellant's past experience of being raped has as much bearing on the question as to whether she is at real risk persecution or serious harm or treatment in breach of Article 3 at the hands of the Sri Lankan authorities as it would have had if, instead of having been raped by three rogue soldiers, she had been raped by three civilian criminals - that is to say, it has no bearing. I accept, in general terms, Mr. Hourigan's submission that past ill-treatment is a factor to be taken into account when assessing the future risk. However, the fact that the Appellant was raped by three rogue soldiers means that this is not relevant to an assessment of the likelihood of the Appellant being at risk of persecution at the hands of the Sri Lankan authorities. Again, her past experience of being raped by three rogue soldiers has as much relevance to that question as it would have had if she had been raped by three criminal civilians - that is to say, it has no relevance. Paragraph 339K of the amended Immigration Rules provides that the fact that a person has already been subject to persecution or serious harm will be regarded as a serious indication of the person's well-founded fear of persecution or real risk of suffering serious harm, unless there are good reasons to consider that such persecution or serious harm will not be repeated. There are good reasons to consider this – that is, that the Appellant was raped in the past by rogue officers and that their actions were not sanctioned by the Sri Lankan authorities. If she has difficulties from them again, she would be able to obtain sufficient protection from the Sri Lankan authorities, albeit that she would have to travel to the government-controlled area to lodge complaints against them. I accept that there is evidence that females are used by the LTTE as soldiers as well as suicide bombers. However, the LTTE clearly also use males for both roles. 16. Accordingly, I have no hesitation in concluding, notwithstanding the caution I am aware I must exercise, that the Immigration Judge did err in law in reaching her conclusions at paragraph 37 that the Appellant is at real risk of persecution and treatment in breach of Article 3. 19. I turn to re-assess the risk on return on the basis of the guidance in LP, which stresses the fact that it is necessary for each case to be considered on its own facts. I confirm I have considered the Appellant's case on its own facts. The starting point is to decide whether the Appellant has a well-founded fear of persecution in her home area. The Immigration Judge found that the Appellant is at real risk of sexual harassment from the three individuals who had previously abused her. I agree with Miss Leatherland that this finding is inadequately reasoned. The evidence was that the Appellant's home area is in LTTE-control. Notwithstanding the fact that it seems that these three men had in the past made incursions into the Appellant's area on the three occasions she was raped, there is nothing to suggest a reasonable likelihood that these three individuals would come to know of the Appellant's return to her home area, especially as the area is in LTTE control and given her absence from her home for nearly a year. If they did make any incursions and if they did come to know that she had returned to her home (which I stress I find is not reasonably likely) then there is no reason why she should not seek the protection of the Sri Lankan authorities, by travelling to the government-controlled area and lodging complaints against the three individuals. If she did seek such protection, I am satisfied, having regard to LP, that such protection would be sufficient. At paragraph 224 of the determination in LP, the Tribunal said that it would not be possible for Tamils who come from LTTE-controlled areas to obtain any form of meaningful protection in their home areas from the Sri Lankan government. However, that conclusion relates to individuals who have a well-founded fear of persecution from the LTTE, and not individuals who are being sexually harassed by the government's own soldiers. Accordingly, I have concluded there is no real risk of the Appellant being subjected to persecution or serious harm or treatment in breach of Article 3 in her home area. The second of the Home Secretary's propositions – that there was and will be a sufficiency of protection if protection is needed - is not made good simply by reliance on LP. That decision relates to the risk of ill-treatment by the authorities of Tamils returned to Colombo. The appellant's experience and continuing fear was not of ill-treatment by the authorities in Colombo: it was of repeated sexual abuse by state military personnel in Jaffna. Her case is that, with perpetrators in the uniform of the state, there was no sensible possibility of state protection from conduct bearing clear hallmarks of toleration and impunity, and that is why she fled. To this I can see no answer on the evidence. The second immigration judge's characterisation of the soldiers' conduct as no different from that of civilian rapists is, with respect, unsustainable. The whole point was that, unlike ordinary criminals, the soldiers were in a position to commit and repeat their crime with no apparent prospect of detection or punishment. There was no contention, and there is no finding, that the appellant can and should relocate for safety to Colombo or anywhere else in Sri Lanka. I turn therefore to the prior finding of SIJ Gill that in this particular case any risk of repetition of the abuse can be discounted. The appellant's case is now put by Mr Morgan, rightly, on her claim to protection from inhuman and degrading treatment rather than on persecution for imputed political opinion. The material law which SIJ Gill was therefore required to apply to the evidence is now found in the Refugee or Person in Need of International Protection (Qualification) Regulations 2006 by which Council Directive 2004/83/EC on minimum qualifications has been transposed, and in the Immigration Rules with which the Regulations are required to be read. The material provisions are these: Regulation 2 ….. "Person eligible for humanitarian protection" means a person who is eligible for humanitarian protection under the Immigration Rules; ….. Regulation 3 3. In deciding whether a person is a refugee or a person eligible for humanitarian protection, persecution or serious harm can be committed by: (a) the State; (b) any party or organisation controlling the State or a substantial part of the territory of the State; (c) any non-State actor if it can be demonstrated that the actors mentioned in paragraphs (a) and (b), including any international organisation, are unable or unwilling to provide protection against persecution or serious harm. Immigration Rules 339C. A person will be granted humanitarian protection in the United Kingdom if the Secretary of State is satisfied that: (i) he is in the United Kingdom or has arrived at a port of entry in the United Kingdom; (ii) he does not qualify as a refugee as defined in regulation 2 of The Refugee or Person in Need of International Protection (Qualification) Regulations 2006; (iii) substantial grounds have been shown for believing that the person concerned, if he returned to the country of return, would face a real risk of suffering serious harm and is unable, or, owing to such risk, unwilling to avail himself of the protection of that country; and (iv) he is not excluded from a grant of humanitarian protection. Serious harm consists of: (i) the death penalty or execution; (ii) unlawful killing; (iii) torture or inhuman or degrading treatment or punishment of a person in the country of return; or (iv) serious and individual threat to a civilian's life or person by reason of indiscriminate violence in situations of international or internal armed conflict. 339E. If the Secretary of State decides to grant humanitarian protection and the person has not yet been given leave to enter, the Secretary of State or an Immigration Officer will grant limited leave to enter. If the Secretary of State decides to grant humanitarian protection to a person who has been given limited leave to enter (whether or not that leave has expired) or a person who has entered without leave, the Secretary of State will vary the existing leave or grant limited leave to remain. 339K. The fact that a person has already been subject to persecution or serious harm, or to direct threats of such persecution or such harm, will be regarded as a serious indication of the person's well-founded fear of persecution or real risk of suffering serious harm, unless there are good reasons to consider that such persecution or serious harm will not be repeated. The single test of whether a fear of persecution or ill-treatment is well-founded is whether on the evidence there is a real risk of its occurrence or recurrence. This straightforward formula now replaces the sometimes confusing variants which have been used over the years in leading cases here and abroad: see Macdonald Immigration Law and Practice, 7th ed, §12.27. I have come to the conclusion that the reasoning in §19 cannot stand. In short, this is because either the test of risk has been set too high or, if it has been set at the right level, the facts are unquestionably within it. The reason why the issue has to be approached on these alternative levels is that the SIJ has used the test of reasonable likelihood, which in Sivakumaran [1988] AC 958 was at one point used interchangeably with real risk. She has used it, however, in a context which suggests that she considered herself still to be finding facts, not assessing any consequent risk:  there was, she held, "nothing to suggest a reasonable likelihood that these three individuals would come to know" of the appellant's return after a year's absence. If this is so, the senior immigration judge was in my respectful opinion mistaken. The finding is the critical conclusion on risk. It required to be approached as such, not as a bare finding of fact. So approached, the question was whether there was, in the light of the ascertained facts, a real risk – not a reasonable likelihood – that the local troops would learn of the appellant's return and again try to take advantage of her. If, alternatively, the senior immigration judge was using reasonable likelihood as a synonym for real risk, the same issue had to be determined. In either case, for reasons to which I now turn, on the accepted evidence the only sustainable answer was that there was such a risk. SIJ Gill speaks of the offending soldiers making "incursions" into the appellant's area. But although Jaffna is sometimes said to be under LTTE control, this does not mean that government forces are not stationed and able to move relatively freely there. These soldiers, for example, were able to target the appellant because they used to come to her father's store to make purchases. The clear inference is that they were stationed in the vicinity and – given the repetition of the rapes and the introduction of a third soldier - able to act with impunity. Nothing in this regard is said to have changed materially since then. It follows that the factual premise – that these were marauders from outside the Jaffna region – was not tenable, and that the risk to be assessed was from local government troops. In my judgment, given the legal test of risk and the centrality given (by Rule 339K, but by common sense too) to past experience as a guide to future risk, the facts accepted by both tribunals established a real risk that, if returned home, the appellant would again be targeted for rape by rogue soldiers stationed in the locality. While such an evaluation of risk is ordinarily for the tribunal of fact, the evidence here was in my view such that no other conclusion was possible. I would accordingly allow this appeal on the ground that the appellant was and is entitled to humanitarian protection. As to the form of order, we will consider counsel's written submissions. It will be relevant, however, to bear in mind that what form of protection to grant is in principle a matter for the Home Secretary: see Rule 339E. The court's provisional view is accordingly that this issue should be remitted to the Home Secretary for decision. Lord Justice Hughes: I agree. Mr Justice Hedley: I also agree.

INDU MALHOTRA, J. Leave granted. The present Civil Appeal has been filed to challenge the Order dated 30.11.2018 passed in Revision Petition No. 472 of 2018 by the National Consumer Disputes Redressal Commission Signature Not Verified Digitally signed by MUKESH KUMAR hereinafter referred to as the National Commission . Date 2019.04.16 134258 IST Reason The factual matrix in which the present case has been filed is as under 2.1. The Complainant Appellants husband Late Anand Duparte had obtained a personal loan of Rs. 2,00,000/ on 27.02.2015 from the Respondent Finance Company. The personal loan was advanced on 27.02.2015 after executing the loan agreement, and companypleting all legal formalities. The Respondent Finance Company secured the loan by issuance of an insurance policy by its sister companycern i.e. M s Shriram General Insurance Company Ltd., on behalf of the Borrower. In the Cover Note of the said policy, the Insured was shown as M s Shriram City Union Finance Ltd. i.e. the Respondent Finance Company. The insurance policy was a Group Insurance Policy issued to various borrowers, including the Appellants husband, whose name was at Serial No. 263 of the list. 2.2. The loan was to be serviced by the Appellants husband in 48 monthly instalments of Rs. 7,933/ each. The 1 st loan instalment of Rs. 7,933/ was paid on 07.03.2015 vide Cheque No. 433931. 2.3. The Appellants husband admittedly paid the premium of the insurance policy. The Respondent Finance Company received a Demand Draft of Rs. 400/ from the Appellants husband towards the insurance premium. The Group Insurance Policy was issued from 30.03.2015 to 29.03.2016. 2.4. On 17.03.2015 i.e. within 18 days after obtaining the loan, the Appellants husband suddenly passed away. 2.5. The Respondent Finance Company issued a numberice to the Appellant for payment of the loan instalments. 2.6. The Appellant requested the Respondent Finance Company to recover the loan through the insurance policy. 2.7. A Legal Notice dated 16.12.2015 was addressed by the Appellant to the Respondent Finance Company, requesting that the loan amount be recovered from the Insurance Company. 2.8. The Respondent Finance Company replied to the Legal Notice on 29.01.2016, and denied having received the Demand Draft of Rs. 400/ from the deceased husband of the Appellant. It was further companytended that the amount of Rs. 2,120/ was deducted from the loan amount towards processing fee and stamp charges. 2.9. The Appellant filed a Consumer Complaint before the District Consumer Disputes Redressal Forum, Nanded. The Appellant submitted that after the loan was sanctioned on 27.02.2015, the amount was credited to the loan account after deducting the insurance premium. The Respondent Finance Company obtained the insurance policy from its sister companycern on 30.03.2015. Had the insurance policy been issued when the loan was advanced, the amount would have been recovered through the insurance policy. There was therefore a deficiency of service by the Respondent Finance Company in delay in obtaining the insurance policy from its sister companycern. The Respondent Finance Company was number entitled to recover the loan from the Appellant. The Appellant prayed that the Respondent Finance Company be restrained from recovering the loan amount from her, since the recovery was wrong and unreasonable, and prayed for payment of companypensation. 2.10. The District Forum allowed the Consumer Complaint filed by the Appellant vide Order dated 27.02.2017. It was held that since the Appellants husband had paid the 1st loan instalment on 07.03.2015, it companyld be presumed that all the loan formalities had been companypleted by that date. This proved that the Appellants husband had paid the insurance premium soon after the loan was sanctioned. The Respondent Finance Company had been negligent in obtaining the policy late, since it had forwarded the premium amount to the Insurance Company after a delay of about 1 month. As per Section 64 VB 2 of the Insurance Act, 1938 1 the risk was companyered from the date of payment of insurance premium. The District Forum held that there was deficiency of service on the part of the Respondent Finance Company. It was ordered that the Respondent Finance Company shall number recover any amount from the Appellant towards the loan obtained by her deceased husband and ordered companypensation of Rs. 10,000/ towards mental agony, and Rs. 3,000/ towards Costs. 1 Section 64VB 2 For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed number earlier than the date on which the premium has been paid in cash or by cheque to the insurer. Explanation Where the premium is tendered by postal moneyorder or cheque sent by post, the risk may be assumed on the date on which the moneyorder is booked or the cheque is posted, as the case may be. 2.11. The Respondent Finance Company challenged the Order of the District Forum before the State Consumer Disputes Redressal Commission, Mumbai. The State Commission dismissed the Appeal vide Order dated 19.09.2017. It was held that since the insurance premium was deducted from the loan account of the Appellants husband, the District Forum had rightly allowed the Consumer Complaint. 2.12. Aggrieved by the Order of the State Commission, the Respondent Finance Company filed a Revision Petition before the National Commission u S. 21 b of the Consumer Protection Act, 1986. The National Commission set aside the Order passed by the State Commission, and allowed the Revision Petition filed by the Respondent Finance Company vide Order dated 30.11.2018. The National Commission held that the Appellant Complainant had taken a companytradictory stand regarding payment of the insurance premium in her Legal Notice dated 16.12.2015. She had stated that a Demand Draft of Rs. 400/ was received by the Respondent Finance Company from her husband. However, there was numberdocument evidencing receipt of the said Demand Draft by the Respondent Finance Company towards payment of premium. It was further held that there was numberevidence of any deduction of the insurance premium from the loan account either. The Respondent Finance Company companyld number be held to be negligent in rendering services. 2.13. Aggrieved by the final Order dated 30.11.2018 passed by the National Commission, the Appellant has filed the present Civil Appeal. We have heard learned Counsel for both parties, and perused the pleadings on record. 3.1. The National Commission, in exercise of its revisional jurisdiction, has set aside the companycurrent findings of the District Forum and State Commission, by the impugned Order dated 30.11.2018. The revisional jurisdiction of the National Commission is a limited jurisdiction,2 to be exercised in case the State Commission lacked jurisdiction, or acted with illegality or material irregularity. 3 Section 21 b reads as follows call for the records and pass appropriate orders in any companysumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has 2 Galada Power and Telecommunication Limited v. United India Insurance Company Limited Anr., 2016 14 SCC 161. 3 Rubi Chandra Dutta v. United India Insurance Co. Ltd., 2011 11 SCC 269. exercised a jurisdiction number vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity. emphasis supplied 3.2. The National Commission has allowed the Revision Petition of the Respondent Finance Company on two grounds first, that the Appellant had failed to produce any evidence to prove that the insurance premium was paid to the Respondent Finance Company second, that there was numberevidence to prove that the Respondent Finance Company deducted the insurance premium from the loan account. 3.3. A perusal of the pleadings and record, would show that both these findings are factually incorrect. With respect to the first ground, the Respondent Finance Company in paragraph 4 c of the Revision Petition filed before the National Commission, has itself admitted that it had received the Demand Draft from the Appellants husband towards payment of the insurance premium. The relevant extract is set out herein below for ready reference That sometime in the month of March 2015, a request for availing the Personal Accidental Insurance Policy from Shriram General Insurance Company Limited hereinafter referred to as the Insurance Company was received from Late Sh. Anand Duparte alongwith the Demand Draft towards the payment of the insurance premium, whereupon the same was forwarded to Insurance Company and after carrying out their due diligence, the Group Personal Accidental Insurance Policy was thereon issued by Insurance Company. emphasis supplied Hence, the first ground on which the National Commission has set aside the Order of the State Commission is factually incorrect. 3.4. With respect to the second ground, the Respondent Finance Company has admitted that it had deducted an amount of Rs. 2,120/ towards processing of the loan, and payment of stamp charges. However, it was companytended by the Respondent Finance Company that this deduction was number made towards payment of the insurance premium. A perusal of the documents shows that the Respondent Finance Company was providing a loan facility to the borrowers, which was secured by an insurance policy issued by its own sister companycern viz. M s Shriram General Insurance Company Limited. It was a companyposite interlinked transaction. The Cover Note issued by M s Shriram General Insurance Company Limited, shows that the beneficiary of the insurance policy is the Respondent Finance Company viz. M s Shriram City Union Finance Ltd. The Cover Note further shows that the Group Insurance Policy dated 30.03.2015 was issued to 280 borrowers, with the loan amounts mentioned against their respective names. Thus, the deduction of Rs. 2,120/ from the loan account was towards processing of the companyposite transaction. 3.5. The deceased husband of the Appellant had fulfilled his part of the transaction, by depositing Rs. 400/ by way of the Demand Draft towards the insurance premium, and also the charges of Rs. 2,120/ towards processing of the loan transaction. 3.6. The Respondent Finance Company however delayed in forwarding the amount to the Insurance Company for obtaining the insurance policy, which was issued on 30.03.2015 for the period 30.03.2015 to 29.03.2016. Hence, there was a clear deficiency of service by the Respondent Finance Company in delay in obtaining the insurance policy from its sister companycern. 3.7. Section 64VB 2 of the Insurance Act, 1938 provides that For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed number earlier than the date on which the premium has been paid in cash or by cheque to the insurer.

FIRST SECTION CASE OF SERGEY SOLOVYEV v. RUSSIA (Application no. 22152/05) JUDGMENT STRASBOURG 25 September 2012 FINAL 11/02/2013 This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Sergey Solovyev v. Russia, The European Court of Human Rights (First Section), sitting as a Chamber composed of: Nina Vajić, President,Anatoly Kovler,Peer Lorenzen,Elisabeth Steiner,Khanlar Hajiyev,Linos-Alexandre Sicilianos,Erik Møse, judges,and Søren Nielsen, Section Registrar, Having deliberated in private on 4 September 2012, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 22152/05) against the Russian Federation lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Russian national, Mr Sergey Yuryevich Solovyev (“the applicant”), on 30 May 2005. 2. The applicant was represented by Mr V. Klimashin, a lawyer practising in Volgograd. The Russian Government (“the Government”) were represented by Mr G. Matyushkin, Representative of the Russian Federation at the European Court of Human Rights. 3. The applicant complained, in particular, under Article 5 of the Convention that he had been unlawfully detained. 4. On 29 January 2009 the application was communicated to the Government. It was also decided to rule on the admissibility and merits of the application at the same time (former Article 29 § 3). THE FACTS I. THE CIRCUMSTANCES OF THE CASE 5. The applicant was born in 1982 and lives in Volgograd. A. Proceedings concerning the applicant’s detention 6. On 10 March 2003 the applicant was arrested on suspicion of involuntary manslaughter. On an unspecified date he retained private counsel, A.B. 7. On 11 March 2003 the Krasnoarmeyskiy District Court of Volgograd (hereinafter “the District Court”) ordered the applicant’s detention on remand with reference to Articles 97-101 and 108 of the Russian Code of Criminal Procedure (hereinafter “the CCP”). 8. On 19 March 2004 the criminal case against the applicant was sent for trial to the District Court, following which that court extended his detention on several occasions. 9. By a decision of 21 December 2004 the District Court extended the applicant’s detention until 20 March 2005. 10. On an unspecified date in March 2005 the prosecution applied to the District Court seeking a further extension of the applicant’s detention on remand; the related hearing was fixed for 17 March 2005. 11. By a decision of 17 March 2005 the District Court adjourned the hearing on the extension of the applicant’s detention because his lawyer, although duly notified about the hearing, had failed to attend, without providing any reasons. The new hearing was scheduled for 22 March 2005. The applicant was present at the hearing of 17 March 2005. 12. At noon on 21 March 2005 the applicant’s lawyer was notified of the new hearing date, time and venue, against his signature. 13. By a decision of 22 March 2005 the District Court extended the applicant’s detention until 20 June 2005. The decision stated, among other things, that the term of the applicant’s detention authorised by the decision of 21 December 2004 had expired on 20 March 2005. According to the hearing record, the applicant’s lawyer did not attend and had not informed the court of the reasons for his absence. The applicant, when asked by the court whether he objected to the examination of the issue in the absence of his counsel, stated that he had no objections. 14. On an unspecified date the applicant complained to the Volgograd Regional Court (hereinafter “the Regional Court”) that his detention between 20 and 22 March 2005 had been unlawful because it had not been covered by a court decision. He also complained that on 22 March 2005 the District Court had examined the issue of his detention in the absence of his lawyer. There is no indication that the applicant also complained about the District Court’s alleged failure to appoint legal-aid counsel for him or to adjourn the hearing. 15. On 26 April 2005 the Regional Court dismissed the complaint. It held that the applicant’s arguments concerning the gap between the detention orders and the examination of the detention issue in the absence of his lawyer were “insignificant” (“не являются существенными”), and that the District Court had not breached the relevant provisions of the criminal procedure in extending his detention. As regards the lawyer’s absence, the court noted that A.B. had been duly notified of the hearing of 22 March 2005 against his signature and had not requested that it be postponed, and that, accordingly, the District Court had correctly decided to proceed with the examination of the case. B. The applicant’s acquittal and the related compensation proceedings 16. On 16 March 2006 the District Court acquitted the applicant of all charges and ordered his release. The judgment stated, among other things, that the applicant had a right to seek compensation for any pecuniary and non-pecuniary damage caused by his criminal prosecution. 17. On an unspecified date in 2007 the applicant brought proceedings seeking compensation for his criminal prosecution and for unlawful detention. He claimed, in particular, 736,000 Russian roubles (RUB) in respect of non-pecuniary damage, and RUB 177,355 in respect of pecuniary damage. 18. By a judgment of 6 March 2007 the District Court partly granted the applicant’s claims, awarding him RUB 137,377 in respect of pecuniary damage and RUB 400,000 in respect of non-pecuniary damage, to be recovered from the Federal Treasury. The court’s judgment, in so far as relevant, reads as follows: “... Bearing in mind that [the applicant] was acquitted, that is, found not guilty of the particularly serious crime of which he had been charged ... the court finds that [the applicant] was unlawfully prosecuted and unlawfully held in detention ... and ... sustained, as a result, pecuniary damage because of loss of salary, and non-pecuniary damage on account of mental suffering in the form of continuing stress because of being held in a detention facility, ... a special institution with a strict regime; [and because of] the restriction of his right to freedom of movement and anxiety about his future ... ... Having regard to the fact that [the applicant’s] criminal prosecution resulted in an acquittal, the court considers it obvious and not requiring any additional proof that the plaintiff sustained non-pecuniary damage because, as a result of unlawful acts by State officials, he was deprived of his right to freedom of movement and his right to choose his place of residence was circumscribed. In assessing the amount of the monetary compensation, the court takes into account the intensity of [the applicant’s] mental suffering related to [the fact of his] detention, including the unavoidable contact with the prison population, the restrictions connected to the particular regime of the detention facility [and] the length of [his] detention on remand (over 24 months)[, which took place] while [the applicant] was of a young age. At the same time, the court takes account of the fact that the [applicant’s] arrest [and] placement in custody and the extension of [his] detention were carried out in accordance with the law of criminal procedure [в рамках, предусмотренных уголовно-процессуальным законом], there being sufficient grounds to suspect and charge [him] of having committed a particularly serious crime entailing the deprivation of life of the victim; during the criminal proceedings [the applicant’s] defence rights were secured; it has not been established that there were faulty unlawful acts on the part of the investigating authorities, the detention facility or the courts.” 19. On an unspecified date in 2007 the respondent appealed against the judgment of 6 March 2007 to the Regional Court. 20. By a judgment of 24 May 2007 the Regional Court granted the appeal in part. In particular, whilst endorsing the trial court’s reasoning, the Regional Court considered that “the requirements of Article 1101 of the Civil Code concerning reasonableness and justice in determining the amount of compensation for non-pecuniary damage”, as well as “the specific circumstances of the case”, called for a reduction of the amount of the award to RUB 100,000. The court upheld the first-instance judgment in the remaining part. 21. On 27 August 2007 the Presidium of the Volgograd Regional Court examined the case by way of supervisory review, set aside the courts’ findings in respect of the award concerning pecuniary damage, and terminated the proceedings in that part. In that regard, the court held that, pursuant to Article 135 of the CCP, claims for compensation for pecuniary damage arising out of an unlawful prosecution fell within the competence of the criminal courts and were to be examined under the rules of criminal procedure. 22. It appears that the applicant was paid the compensation in respect of non-pecuniary damage without delay. There is no indication that he applied to the criminal courts with a view to obtaining compensation in respect of pecuniary damage, as directed by the Presidium of the Volgograd Regional Court. II. RELEVANT DOMESTIC LAW AND PRACTICE A. Provisions concerning detention on remand 23. The Russian Constitution of 12 December 1993 establishes that a judicial decision is required before a defendant can be detained or his detention extended (Article 22). 24. According to the Russian Code of Criminal Procedure (hereinafter “the CCP”), a decision ordering or extending detention on remand in respect of a suspect or an accused is taken by a district or town court on the basis of a reasoned request by a prosecutor, supported by appropriate evidence (Articles 108 §§ 1, 3-6 and 109 § 2). B. Right to compensation for unlawful criminal prosecution 1. The CCP 25. Chapter 18 of the Code regulates the so-called “right to rehabilitation” (право на реабилитацию), which includes, among other things, the right for an individual to obtain from the State full compensation for pecuniary and non-pecuniary damage sustained as a result of criminal prosecution, irrespective of any fault of the investigating authorities, prosecutors or courts (Article 133 § 1). 26. The right to compensation arises in the case of acquittal and also a number of other situations where the criminal prosecution is terminated on so-called “rehabilitation” grounds (реабилитирующие основания), that is, for example, where the prosecution has dropped the charges or where criminal proceedings have been terminated owing to a lack of corpus delicti or because the person was not involved in the criminal act (Article 133 § 2). However, no right to compensation arises where the prosecution is terminated on “non-rehabilitation” grounds, such as in the case of an amnesty or where the prosecution has become time-barred (Article 133 § 4). 27. Article 133 § 3 specifically provides that any person on whom a measure of restraint has been unlawfully imposed in connection with a criminal prosecution has a right to compensation under the rules of Chapter 18. 28. In a judgment acquitting an individual a court has to mention explicitly that he has the right to “rehabilitation” (Article 134). A claim for compensation of pecuniary damage is to be lodged with the same authority which issued the decision to acquit or the decision to terminate the criminal prosecution (Article 135 § 2), whereas any claims for monetary compensation of non-pecuniary damage are to be lodged with civil courts and examined under the relevant provisions of the Code of Civil Procedure (Article 136 § 2). 2. The Civil Code 29. The Civil Code of the Russian Federation provides as follows: Article 1070: Responsibility for damage caused by unlawful acts ofinvestigating authorities, prosecuting authorities and courts “1. Damage caused to a citizen as a result of unlawful conviction, unlawful criminal prosecution, ... [or] unlawful detention on remand ... shall be compensated at the expense of the Treasury of the Russian Federation, and in the instances provided for by law, at the expense of the Treasury of the subject of the Russian Federation ... in full, irrespective of the fault of the officials of the agencies ...” Article 1100: Grounds for compensation for non-pecuniary damage “Compensation for non-pecuniary damage shall be made irrespective of the fault of the person having caused the damage when: ... the damage has been caused to a citizen as a result of his unlawful conviction, unlawful criminal prosecution, [or] unlawful detention on remand ...” 3. Case-law of the Constitutional Court and the Supreme Court of Russia 30. In its ruling (определение) no. 242-O of 21 April 2005 the Constitutional Court held, inter alia, as follows: “ ... Article 133 of the [CCP] ... does not limit an individual’s right to obtain compensation in connection with a criminal prosecution only to situations of rehabilitation of a suspect or an accused ... Accordingly, in providing that pecuniary and non-pecuniary damage sustained by a citizen as a result of, among other things, unlawful ... detention, is to be compensated for irrespective of the fault of the relevant officials, Articles 1070 § 1 and 1100 § 3 of the Civil Code of the Russian Federation do not make the issuing of such decisions conditional upon the existence of a judgment acquitting the citizen ... Hence, the legislation in force ... does not exclude that a court can also issue a decision to compensate a citizen for pecuniary and non-pecuniary damage sustained as a result of unlawful prosecution and ... unlawful detention in cases where an investigating authority, a prosecutor or a court did not take a decision on the full rehabilitation [решение о полной реабилитации] of a suspect or an accused...” 31. In its ruling no. 47-O-O of 18 January 2011 the Constitutional Court reiterated that Article 133 of the CCP and the related provisions of the Code of Civil Procedure did not make an award of compensation in respect of pecuniary or non-pecuniary damage conditional upon an acquittal and that the relevant provisions did not exclude the possibility for courts to make such an award in respect of damage sustained as a result of criminal prosecution in other situations, account being taken of the particular circumstances of the case. 32. The Constitutional Court specifically noted in its ruling no. 1583‑O‑O of 17 November 2011 that, pursuant to Article 133 § 3 of the CCP, any person who was unlawfully held in detention in connection with his criminal prosecution had a right, under the rules of Chapter 18 of the CCP, to compensation for the damage sustained. 33. In its resolution (постановление) no. 17 of 29 November 2011, the Plenary of the Supreme Court of Russia provided clarifications on the application by the courts of the provisions concerning compensation for pecuniary and non-pecuniary damage sustained as a result of unlawful criminal prosecution. It noted, among other things, that in assessing claims for compensation of non-pecuniary damage the domestic courts were to take into account the level and nature of the physical and mental suffering and the individual characteristics of the person who had sustained the damage, and other circumstances, such as the length of the proceedings against him, the length and conditions of his detention on remand, and the type of penitentiary institution where he had served his sentence, as well as considerations of justice and reasonableness. The courts were also directed to set out those circumstances in their decisions awarding damages. 34. On the notion of “unlawfulness” of criminal prosecution and detention, as interpreted by the Russian courts, see Trepashkin v. Russia (no. 36898/03, § 62, 19 July 2007). THE LAW I. ALLEGED VIOLATION OF ARTICLE 5 § 1 OF THE CONVENTION 35. The applicant complained under Articles 5 and 6 of the Convention that his detention between 20 and 22 March 2005 had been unlawful. The Court considers that this complaint falls to be examined under Article 5 § 1 (c) of the Convention, which reads as follows: “1. Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: ... (c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authority on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so; ...” A. Submissions by the parties 36. The Government argued that the applicant could no longer claim to be a “victim” of the alleged breach of Article 5 of the Convention because the domestic courts had declared his detention on remand unlawful and had awarded him compensation of RUB 100,000. They stated, in particular, that the courts had found unlawful the entire period of the applicant’s detention on remand, which, in the Government’s submission, was to be understood as also covering the time span between 20 and 22 March 2005 in respect of which the applicant had complained to the Court. The Government concluded that the domestic authorities had not only acknowledged the breach of the applicant’s rights but had also afforded him appropriate redress. 37. The applicant stressed that the domestic courts had declared his detention on remand unlawful only after his acquittal, and that when he had complained to the Regional Court that his detention between 20 and 22 March 2005 had been unlawful, it had dismissed his submissions, stating that the irregularity in question was “insignificant”. The applicant therefore considered that he retained “victim” status. B. The Court’s assessment 1. Admissibility 38. Having regard to the parties’ submissions, the Court has first to assess whether the applicant has ceased to be a “victim” of the alleged breach of Article 5, as argued by the Government. 39. In this regard the Court reiterates that it falls first to the national authorities to redress any alleged violation of the Convention. At the same time, a decision or measure favourable to the applicant is not, in principle, sufficient to deprive him of his status as a “victim” for the purposes of Article 34 of the Convention unless the national authorities have acknowledged, either expressly or in substance, and then afforded redress for the breach of the Convention (see Gäfgen v. Germany [GC], no. 22978/05, § 115, ECHR 2010, with further references). 40. The Government submitted that the domestic courts’ findings in the compensation proceedings to the effect that the applicant’s detention had been unlawful were to be regarded as covering the entire period of his detention, including the impugned time span between 20 and 22 March 2005. 41. In this connection, the Court notes at the outset that it has already had an opportunity to examine similar arguments by the Government in a number of cases involving “rehabilitation proceedings” where the Russian courts found the applicants’ detention on remand unlawful following their acquittal (see, for example, Trepashkin v. Russia, cited above, §§ 69-70, and Shcherbakov v. Russia, no. 23939/02, §§ 55-63, 17 June 2010). 42. In particular, in its Trepashkin judgment the Court pointed out that although the domestic courts’ findings concerning the unlawfulness of the applicant’s detention resulted from his acquittal and the courts had not analysed in detail his specific submissions under Article 5 concerning the irregularities in his detention, it was prepared to assume that the relevant decisions contained, at least in substance, an acknowledgment of a breach of his rights under Article 5. Emphasising that it would not adopt an approach of excessive formalism, the Court reasoned that the “unlawfulness” ascertained by the domestic courts was of a more general character than the “unlawfulness” referred to by the applicant (see Trepashkin, cited above, §§ 69-70). 43. Having regard to the cases mentioned above and to the relevant provisions of the domestic law, as construed by the national courts (see paragraphs 25-32 above), the Court reaffirms, on a more general level, that it cannot be excluded that an acquitted applicant who is no longer detained under Article 5 § 1 (c) and who has duly pursued compensation proceedings and has been awarded damages under the above-mentioned provisions, may cease to be a “victim” of the alleged breach of his rights under Article 5 § 1(c), provided that the relevant decisions of the domestic courts comply with the requirements of acknowledgment and redress, as set down in the Court’s case-law. In this regard it also takes note of the decisions of the Constitutional Court, which appear to suggest that an opportunity to seek damages in connection with the unlawfulness of one’s detention is, moreover, not limited to situations of acquittal (see, in particular, paragraphs 30-32 above). 44. In any event, the Court reiterates that its task is not to review the compatibility of the relevant law and practice with the Convention in abstracto (see, for example, Brogan and Others v. the United Kingdom, 29 November 1988, § 53, Series A no. 145‑B), but to determine, as has been pointed out above, whether the applicant in the present case can still claim to be a “victim” of the alleged breach of his rights under Article 5 § 1 of the Convention. 45. Turning to the circumstances of the case, and having regard to the parties’ submissions and the decisions of the domestic courts, the Court finds that it cannot accept the Government’s argument as convincing for the following reasons. 46. As regards the acknowledgment of the alleged breach of the applicant’s rights, the Court reiterates that the gist of the applicant’s complaint is the alleged unlawfulness of his detention between 20 and 22 March 2005, owing to the lack of judicial authorisation for it. It is further pointed out that the applicant duly brought his grievance to the attention of the Regional Court when challenging the decision of 22 March 2005 on appeal (see paragraph 14 above), and it follows from the District and the Regional Courts’ decisions that both authorities had no doubts about the existence of the impugned gap between his detention orders (see paragraphs 13 and 15 above). 47. However, the Regional Court dismissed the applicant’s arguments as “insignificant”, finding that the District Court had not breached the applicable rules of criminal procedure in extending his detention (see paragraph 15 above). In other words, it remains unclear if the Regional Court acknowledged the alleged breach of the applicant’s rights on account of the gap between the detention orders. 48. The Court further observes that in the compensation proceedings which followed the applicant’s acquittal the District Court found that his prosecution had been unlawful and also noted that he had been “unlawfully held in detention” (see paragraph 18 above). At the same time and in the same judgment the court held that “the [applicant’s] arrest [and] placement in custody and the extension of [his] detention were carried out in accordance with the law of criminal procedure” (ibid.). 49. Having regard to what has been stated above, the Court considers that the findings of the domestic courts in the detention and compensation proceedings are unclear and ambiguous, as regards the acknowledgment of the alleged breach of the applicant’s rights. The Government failed to explain why, in their view, the Court in its assessment should prefer the findings of the courts in the compensation proceedings over those in the detention proceedings and also provided no explanation for the discrepancies in the District Court judgment of 6 March 2007 mentioned above. In this connection the Court specifically notes that the present case has to be distinguished from the Trepashkin case mentioned above, where the domestic courts had unequivocally established the unlawfulness of the impugned period of the applicant’s detention before he was acquitted and awarded damages in the compensation proceedings (see judgment cited above, § 12). Therefore it has serious doubts as to whether the domestic authorities can be said to have acknowledged, even in substance, the alleged breach of the applicant’s rights in the present case. 50. In any event, even assuming that they did so, the Court is not persuaded that the applicant was afforded adequate redress. 51. In this connection the Court reiterates that it is prepared to accept that monetary compensation for damage can constitute “appropriate” redress for an applicant who, by the time he is awarded it, is no longer in detention (see Trepashkin, cited above, § 72, with further references). 52. It remains to be ascertained whether the redress afforded to the applicant can be considered “sufficient” (see Shilbergs v. Russia, no. 20075/03, §§ 72-74, 17 December 2009) 53. In this regard the Court points out that after the decisions of the courts in the compensation proceedings had been set aside in the part concerning compensation for pecuniary damage, it was open to the applicant to seek those damages in the criminal courts, but there is no indication that he availed himself of that possibility (see paragraphs 21 and 22 above). Nor did he raise this specific issue in his submissions to this Court. 54. As to the award in respect of non-pecuniary damage, the Court notes that it is unable to assess whether it was “sufficient”. In particular, when applying for compensation the applicant did not specifically complain about the gap between the detention orders (see, by contrast, Trepashkin, cited above, § 12), which the Court does not find unreasonable, given that the Regional Court, by a final decision, had already dismissed those submissions duly raised by the applicant when he was still in detention. Hence, whilst in Trepashkin the applicant’s complaint to the courts in the compensation proceedings about a specific period of his detention enabled the Court, among other things, to accept that he had been awarded damages on that account, it cannot reach a similar conclusion in the present case. Moreover, while in the present case the domestic courts referred to the applicant’s detention when making their award, the gist of their findings appears to have concerned mostly the unlawfulness of the applicant’s criminal prosecution. 55. In sum, having regard to what has been stated above, the Court dismisses the Government’s argument and holds that the applicant may still claim to be a “victim” of the alleged breach of his rights under Article 5 § 1 of the Convention. 56. It further notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention and that it not inadmissible on any other grounds. It must therefore be declared admissible. 2. Merits 57. The Court notes, and this was not disputed by the parties, that there was no valid judicial authorisation for the applicant’s detention on 21 March and until the new detention order was issued on 22 March 2005. 58. In this regard it reiterates that for detention to meet the standard of “lawfulness” it must have a basis in the domestic law (see, among many other authorities, Khudoyorov v. Russia, no. 6847/02, § 149, ECHR 2005‑X (extracts)). 59. In examining the applicant’s complaint the Regional Court found that his arguments concerning the lack of judicial authorisation for his detention on 21 March 2005 were “insignificant”. The Court will not dwell upon the exact meaning of that statement, which remains rather unclear. It notes, however, that both the District and the Regional Courts acknowledged that there had been a gap between the applicant’s detention orders. 60. It further observes that the Government did not refer to any legal provisions permitting an accused to continue to be held in custody once the authorised period of his detention had expired (see ibid.) Moreover, it follows from the relevant provisions of the domestic law that the power to extend the detention of an accused in criminal proceedings is vested in courts and that no exceptions to that rule are permitted or provided for, no matter how short the duration of the detention (see paragraphs 23 and 24 above; Khudoyorov, cited above, § 149; Lebedev v. Russia, no. 4493/04, § 59, 25 October 2007; compare Nikolov v. Bulgaria, no. 38884/97, § 85, 30 January 2003; Salayev v. Azerbaijan, no. 40900/05, §§ 46-48, 9 November 2010). Accordingly, having regard to the fact that during the relevant period of time there was no judicial decision authorising the applicant’s detention, the Court concludes that his detention on 21 March 2005 and until the new detention order was issued on 22 March 2005 was “unlawful” (see also Starokadomskiy v. Russia, no. 42239/02, §§ 62-64, 31 July 2008). 61. It follows that there has been a violation of Article 5 § 1 (c) of the Convention. II. ALLEGED VIOLATION OF ARTICLE 5 § 4 OF THE CONVENTION 62. The applicant further complained under Articles 5 and 6 of the Convention that on 22 March 2005 the District Court had examined the prosecution’s request for the extension of his detention in the absence of his counsel, and that it had not considered appointing legal-aid counsel for him or adjourning the hearing. The Court will examine this complaint under Article 5 § 4 of the Convention (see Khodorkovskiy v. Russia, no. 5829/04, § 203, 31 May 2011, and Sokurenko v. Russia, no. 33619/04, §§ 94-95, 10 January 2012). Article 5 § 4 provides: “Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful.” 63. The Court notes that in the detention proceedings the applicant was represented by a private counsel and that on 17 March 2005 the District Court decided to postpone the hearing on the applicant’s detention because of his lawyer’s absence. It follows from the relevant court decision (see paragraph 11 above) – and this was not contested by the applicant – that his counsel was duly apprised of the hearing of 17 March 2005 and did not request that it be postponed, or otherwise refer to any reasons preventing him from attending. It can furthermore be seen from the material available to the Court that the applicant’s lawyer failed to attend the rescheduled hearing of 22 March 2005, despite the fact the he had been notified of it against his signature the day before (see paragraph 12 above). According to the hearing record, the applicant, when duly consulted by the District Court, confirmed that he had no objections to the examination of the detention issue in the absence of his counsel (see paragraph 13 above). 64. The Court reiterates that detention proceedings require special expedition and Article 5 does not contain any explicit mention of a right to legal assistance in this connection. The difference in aims explains why Article 5 contains more flexible procedural requirements than Article 6 while being much more stringent as regards speediness. Therefore, as a rule, the judge may decide not to wait until a detainee avails himself of legal assistance, and the authorities are not obliged to provide him with free legal aid in the context of detention proceedings (see Lebedev v. Russia, cited above, § 84). 65. Having regard to what has been stated above, the Court concludes that the applicant’s complaint about the domestic courts’ examination of the detention issue in his counsel’s absence is manifestly ill-founded and should be dismissed pursuant to Article 35 §§ 1 and 3 (a) of the Convention. III. APPLICATION OF ARTICLE 41 OF THE CONVENTION 66. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Damage 67. The applicant claimed 1,000,000 Russian roubles (RUB) in respect of non‑pecuniary damage in connection with his unlawful criminal prosecution and detention. 68. The Government argued that they did not consider that the applicant’s rights had been violated and submitted that, should the Court find a breach of the Convention, the finding of a violation would constitute sufficient just satisfaction. 69. The Court reiterates that the amount of compensation to be awarded for non-pecuniary damage is assessed with a view to providing “reparation for the anxiety, inconvenience and uncertainty caused by the violation” (see, for example, Ramadhi and Others v. Albania, no. 38222/02, § 99, 13 November 2007, and Shtukaturov v. Russia (just satisfaction), no. 44009/05, § 13, 4 March 2010). 70. It further notes that, in so far as the applicant may be understood to claim compensation for non-pecuniary damage in connection with the criminal proceedings against him, his criminal prosecution is not the subject of the present application. Accordingly, his claims in this regard should be dismissed. 71. At the same time, the Court observes that it has found a violation of Article 5 § 1 of the Convention on account of the unlawfulness of the applicant’s detention on 21 March 2005 and until the issuing of a new detention order on 22 March 2005. The Court considers that the breach of the Convention established in the case cannot be compensated solely by the finding of a violation and accordingly awards the applicant 500 euros (EUR) in respect of non-pecuniary damage, plus any tax that may be chargeable to him. B. Costs and expenses 72. The applicant made no claims in respect of costs and expenses. Accordingly, the Court considers that there is no call to award him any sum on that account. C. Default interest 73. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Declares the complaint under Article 5 § 1 concerning the unlawfulness of the applicant’s detention on 21 March 2005 and until a new detention order was issued on 22 March 2005 admissible and the remainder of the application inadmissible; 2. Holds that there has been a violation of Article 5 § 1 (c) of the Convention; 3. Holds (a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, EUR 500 (five hundred euros) in respect of non-pecuniary damage, plus any tax that may be chargeable, to be converted into Russian Roubles at the rate applicable on the date of settlement; (b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amount at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 4. Dismisses the remainder of the applicant’s claim for just satisfaction. Done in English, and notified in writing on 25 September 2012, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. Søren NielsenNina VajićRegistrarPresident

Lord Justice Tomlinson : The Claimants, Mr and Mrs Stanley, and the Defendants, Mr and Mrs Rawlinson, are neighbours in Mistley in Essex. Between their properties there was in October 2001 a wall constructed of soft red brick in lime mortar. The wall belonged to the Stanleys. It was an old wall, probably built in the middle of the nineteenth century. It was not well maintained. It had vegetation growing in the bed-joints of the wall. There were two Scots Pines close to the wall on the Rawlinsons' side and a fig tree and other vegetation close to the wall on the Stanleys' side. The wall had for some years shown a perceptible lean of some 80mm on a height of about 1.5m towards the Stanleys' property. During the night of 6/7 October 2001 there were high winds, described by Mrs Rawlinson as a gale. A stretch of the wall collapsed, from the height of about five courses of bricks above ground level, onto the Stanleys' side, i.e. in the direction of the pre-existing lean. Whatever may have been the difficulty of seeing over the wall before that date, after the collapse of the wall the Stanleys could see for themselves the nature of any groundwork or other operations which may or may not have been in progress on the Rawlinsons' side of the wall. Evidently nothing which they saw gave them cause to consider that anything which had been done on the Rawlinsons' side of the wall had caused it to collapse. It would seem that in 2001 the Stanleys and the Rawlinsons enjoyed a good if not close neighbourly relationship but for whatever reason that deteriorated over the course of the next few years. In September 2007 the Rawlinsons received from the Stanleys' solicitors a letter which asserted that the wall had collapsed as a result of their having piled up against it a large quantity of earth which derived from the excavation of a swimming pool on the Rawlinsons' property. It is said by the Stanleys that it was only in September 2006 that a builder asked to quote for rebuilding the wall had alerted them to the fact that the cause of the collapse of the wall was the activities of the Rawlinsons on their side of the wall. It may be that in early 2007 there was some informal intimation by the Stanleys to the Rawlinsons that they considered the latter responsible for the collapse of the wall. On 5 October 2007, i.e. the last day before expiry of the limitation period, the Stanleys issued in the Ipswich County Court, apparently without the assistance of solicitors, a Claim Form against the Rawlinsons claiming £26,423, said to be the cost of rebuilding the wall as evidenced by a estimate received from a local builder. The claim was said to be in negligence, consisting of piling earth against the wall causing it to collapse. Since then the Stanleys and the Rawlinsons have been locked in dispute. The wall has still not been rebuilt, nearly nine and a half years after it collapsed. Both sides commissioned expert evidence, those experts being predictably hampered by their coming to the task so long after the collapse of the wall. Thus Mr Croucher for the Claimants carried out his first inspection in June 2008, nearly seven years after collapse of the wall. There were various interlocutory skirmishes in the action. The matter ultimately came on for trial in early December 2009 before His Honour Judge Moloney QC in the Chelmsford County Court. The trial lasted for three days, one day longer than estimated. Both sides were represented at trial by counsel. It was common ground at the trial that the immediate cause of the collapse of the wall was the high wind in the night, but the Claimants contended that the wall had been rendered more vulnerable to collapse than already it was by reason of work then in progress on the Defendants' side of the wall. It was in dispute whether any such works had been in progress at the relevant time and, if so, of what they consisted. The judge found that there were works in progress at the time, but not of the nature contended for by the Claimants. In particular, the relatively modest groundwork carried out adjacent to the wall by hand tools, not heavy machinery, involved no piling up of earth against the wall and no compaction of the material adjacent to the wall. The judge found that "the works actually carried out before 7 October 2001 are not likely to have had any material effect on the ability of the wall to resist wind pressure". The judge concluded:- ". . . those works were so minor in nature, as far as any contact with the wall or disturbance of the adjacent soil is concerned, that the Claimants have failed to persuade me on the balance of probability that the works led to any increase in the pressure or other forces exerted on the wall by the Defendants' land or activities. From this it must follow that the condition of the wall was not materially affected by the works, that its collapse was probably due to other causes, in particular the combination of high winds with its pre-existent age and condition." In the light of the history I have recounted this is perhaps an unsurprising conclusion. In this court Mr and Mrs Stanley were represented by Mr James Newman, instructed by the Bar Pro Bono Unit. We are very grateful to Mr Newman for his assistance. Although I shall deal in more detail with his submissions hereafter, he was constrained to accept that his case amounted to no more than the proposition that because the wall had apparently in the relatively recent past, notably on 13 December 2000, survived a wind of apparently greater strength and because in October 2001 there was some work in progress on the Defendants' side of the wall, the only principled conclusion which the judge could have reached was that the work being carried out caused the wall to collapse. That proposition is self-evidently unsustainable. The appeal to this court was I am afraid quite hopeless. To have become embroiled in this litigation is I have no doubt a disaster for both the Stanleys and the Rawlinsons, to be measured not just in financial terms. However I cannot forbear to observe that the wall could have been rebuilt six times over with the money apparently expended in fighting this case, and moreover could have been rebuilt nine years ago and enjoyed in the interim. One apparent reason why the litigation has reached this court is a belief on the part of the Stanleys that the Rawlinsons have in the past dissimulated as to the nature and in particular the timing of the works carried out on their side of the wall. Thus the first issue which the judge had to decide was whether there were any works in progress at the time in question. To some extent there had been a misunderstanding between the parties in the run up to trial, because further information requested of the Defendants in October 2008 related to "building works carried out on the area of land adjacent to the wall", which the Defendants not unreasonably interpreted as relating to building works and not groundworks and only to the land immediately adjacent to the wall rather than to an area extending to that part of the Rawlinsons' house where improvements to their kitchen and substantial reconstruction of an outbuilding were undoubtedly at some stage carried out. The Rawlinsons' denial in 2008 that any building works had been carried out by them on land adjacent to the wall was therefore misunderstood as a denial that the Rawlinsons had even improved their kitchen or refurbished their outbuilding the manner which manifestly, at some stage in or after 2001, they had. Nonetheless, a Notice to Admit Facts served in October 2009 still elicited the response that groundworks adjacent to the collapsed wall had begun only after its collapse. Indeed, it was the Rawlinsons' case at trial that the kitchen and outbuilding works were dealt with first and that resurfacing of the area, including that adjacent to the wall, was left until last and that none of this work had begun before the collapse of the wall. One is entitled to observe that ordinarily one might have expected that the Rawlinsons would remember whether the collapse of the wall occurred before or after they had been conducting work immediately adjacent to it, and that of course had led the Stanleys to believe that the Rawlinsons must have deliberately suppressed the truth concerning this matter. However the Rawlinsons were not asked to apply their minds to this point for very nearly six years after the wall collapsed, and when they were the allegation was that they had piled up the spoil from excavating a swimming pool, an allegation which was a flight of fancy as the swimming pool had been constructed many years before 2001. Furthermore the entire site had been open to view from the Stanleys' side since the collapse of the wall and since Mr Stanley had taken the opportunity to take photographs of the condition of the ground at that stage, it might also be thought that dissimulation would be futile. Moreover given the nature of the work in fact carried out, the age of the wall, its condition and the circumstance that it collapsed in high winds, I think it unlikely that it can have occurred to the Rawlinsons at the time that they were responsible for its collapse, just as that thought evidently did not cross the Stanleys' mind, notwithstanding the progress of the groundworks was plain to see over the remains of the wall, which now at the relevant point stood only five or six courses high. However the case is replete with oddities, not least that when the Stanleys' solicitors first wrote to the Rawlinsons in September 2007 they asserted that the wall was a "party structure" and asked for confirmation that the Rawlinsons intended to rebuild it. The judge resolved the issue of the timing of the works by reference to photographs which the Stanleys were able to prove by persuasive circumstantial evidence must have been taken not later than October 2001. Those photographs clearly show that some groundwork was in progress immediately adjacent to the wall at the time when the photographs were taken. The judge also considered it inherently unlikely that the Rawlinsons would have embarked upon "elaborate" resurfacing works immediately adjacent to their neighbours' wall after it had collapsed but before it had been reinstated, when the reinstatement might well necessitate some interference with the newly-laid surface. The judge observed that there had been accusations of bad faith going both ways, but proceeded upon the basis that each side had had to do its best to reconstruct the situation from limited data and that there must inevitably have been room for hindsight and wishful thinking. The photographs were however a two-edged sword in the hands of the Claimants. On the one hand they demonstrated that some work had been in progress at the relevant time. On the other hand they also demonstrated that that work did not consist of piling up earth against the boundary wall, did not involve the importation and laying of fill material against the wall and moreover that no compaction of the ground or the material adjacent to the wall had by the time of its collapse occurred. The assumptions on the basis of which Mr Croucher for the Claimants had given it as his opinion that the work on the Rawlinsons' side had led to the collapse of the wall were thereby destroyed. The judge's essential findings of fact are set out in paragraphs 7 and 8 of his judgment, which I reproduce below in full:- "7. As to the prior condition of the wall, there was a substantial measure of agreement between them. Both now accept: a. that the wall is brick-built and is of considerable age, probably mid 19th century; b. That prior to its collapse it had for some years shown a perceptible lean towards the Claimants' property (some 80mm. on a height of about 1.50 metres according to Mr Leeds); c. That that lean was probably (Mr Leeds) or possibly (Mr Croucher) the consequence of the action of tree roots over a long period, there being a fig tree on the Claimants' side and two Scots pines on the Defendants' side in fairly close proximity to the collapsed section of the wall; d. That the greater the lean in a wall, the more vulnerable it is to wind pressure in the direction of the lean; e. That although at the time of construction the ground levels may have been much the same on both sides of the wall (it was not specifically constructed as a retaining wall) for many years prior to the commencement of the works the ground level on the Defendants' side had been appreciably higher than on the Claimants'; the experts' plans and trial pits show a difference in height above ground level of some 6 courses of brick or 500mm, though the difference varied somewhat along the length of the wall, and old photographs indicate that the situation has not changed much since at least the 1980s. 8. As to the nature and extent of the works at the time of the collapse, much of the experts' previous research has been rendered redundant by the production of the contemporary photographs referred to above and the evidence of Mrs Rawlinson as to the course the works took (which the Claimants were not in a position effectively to challenge). In summary she told me that the kitchen and outbuilding works were dealt with first, and the resurfacing left till last; this is consistent with the photographs which show those building jobs substantially complete. As to the resurfacing, the first step was to break up and lift the old concrete on part of the back yard; this was not done mechanically but by hand with pickaxe and spade. The resulting earth, broken concrete and brick was then spread, again by hand, over the whole yard in such a way as to level off the previous slight slope or gradient. This hardcore was then compacted and levelled by hand with shovels; hoggin was laid on top, and finally a layer of shingle. I accept this account. In the light of the photographs and my finding as to their date, it follows that the wall fell at the time just after the hardcore had been spread over the whole areas, but immediately before it had been compacted, since the photographs clearly show it in an irregular uncompacted state. At this stage, before compaction, the height of soil against the wall on the Rawlinson's side may have been raised by a small amount, particularly where the former gradient had been levelled up; subsequently, after compaction, the height is little different from its original level." The judge then posed what he described as the crucial question, "What if any effect the breaking-up of the surface layer and its distribution as described, but without any compaction, would have had on the ability of the wall to resist high winds? He recited that on this issue the Claimants' case had gone through several changes:- "i. Originally they were under the false impression that the works had involved the Defendants bringing large quantities of soil onto the yard from elsewhere, heaping it high against the wall, and compacting it, perhaps mechanically. (If so, it is plainly likely that there would have been an increase, perhaps a substantial one, in the forces transmitted from the Defendants' land to the Claimants' wall, whether by means of the weight of the soil, the forces associated with its compaction, or the pressure of water contained within or accumulated in it, and one can well see how such forces applied to an already leaning wall might have caused it to tilt further and increased its vulnerability to wind pressure.) ii. Upon it becoming clear that no such new soil had been brought on to the site, the weight point lost force, but Mr Croucher's last opinion before trial was that a similar result would follow from "the sideways pressures which result from compaction of the ground to consolidate it, together with rainwater getting into the soil against the wall". iii. At trial it became clear that there had been no compaction either before the wall fell, but Mr Croucher valiantly maintained that nevertheless the breaking up of the concrete and the disturbance of the soil would have reduced the binding effect within the soil, and increased its tendency to absorb water, thus increasing the hydrostatic pressure against the wall and the soil's ability to transmit surface loads." The view of Mr Leeds, who gave expert evidence for the Defendants, was:- " that the presence of uncompacted soil, as seen in the photographs, could not cause the wall to collapse; as to the question of trapped water and its effects, he said that while the presence of such water over a long period might have an effect on a wall, here the soil was sandy and granular with no clay base and the rainwater would easily drain away. His overall view was that this was an old wall which had already become very vulnerable. If the works had exerted any appreciable forces on the wall, it would have fallen even before the high winds; as it was the wind alone was a sufficient explanation." (Judgment paragraph 10) At paragraph 11 of his judgment the judge referred to what he described as a new point first raised in oral evidence by Mr Croucher, which had at first given the judge serious concern, namely that the meterological evidence from a nearby weather station showed that although the wind speed on 6/7 October 2001 had been high, there had been many occasions in the previous few years when it had been a good deal higher; since wind pressure increases with the square of wind speed, why had the wall not fallen before, unless its strength had been reduced by some recent event? However the concerns of the judge on this point were evidently allayed by Mr Leeds, who as the judge recites:- "pointed out that it not only the speed of the wind, but its direction and the effect of local topography, which determines its effect on particular buildings, so that a mere record of wind speed in another location is of little or no evidential value as to the forces previously exerted on this wall. (As stated at 7(d) above, the experts are agreed that the direction of the wind is highly material to its effect on the wall.)" (Judgment paragraph 11) At paragraph 12 the judge set out his comparative evaluation of the two experts in these terms:- "Mr Croucher's academic and professional qualifications are a good deal higher than Mr Leeds's, but both are men with more than 30 years' experience in structural engineering and design. Mr Leeds gave his evidence before me in a frank and clear manner, and stated his opinions without apparent regard for their likely effect on the Defendants' case. As I have indicated, Mr Croucher's conclusions remained favourable to the Claimants notwithstanding adverse developments in the evidence. Also, I was shown correspondence between him and the Claimants in which he appeared to go beyond the usual role of an expert witness by advising them on the evidence they needed to meet the opposing case; when taxed on this in cross-examination he maintained that he owed a dual duty to the Court and to his "client". When choosing between the two, I would generally therefore favour Mr Leeds's evidence, all else being equal." The judge then expressed his conclusion to which I have already referred at paragraph 5 above, adding that his assessment that the works were minor in nature as far as any contact with the wall or disturbance of the adjacent soil is concerned was informed by the views of both experts. Mr Newman submitted that the judge was unfair to Mr Croucher in failing to recognise that the "rainwater theory" had always been a part of his essential thesis. It is true that in his first report Mr Croucher referred to water pressures occurring due to the absence of weep holes in the wall, though this was in the context of the level of the ground on the Rawlinsons' side having been raised by filling and by compacting of the fill behind the wall. It is also true that in his second report of 21 July 2009, commenting on Mr Leeds' first report, Mr Croucher referred again to the "sideways pressures which result from compaction of the ground to consolidate it, together with rainwater getting into the soil against the wall, . . . [giving] rise to higher than normally experienced pressures against the wall, which can cause it to lean over." Self-evidently however, none of this was in the context of work consisting of no more than the breaking up of the concrete layer and spreading of earth, brick and broken concrete with no compaction. The judge was in my view justified in approaching Mr Croucher's evidence on the basis that what had hitherto been a phenomenon associated with compaction of the ground had now been elevated to a theory requiring no more than disturbance of the soil to give rise to significantly increased hydrostatic pressure against the wall. To be fair to Mr Croucher, when he first put forward this theory in his examination in chief he did not attribute to it overwhelming significance. He described how removal of the concrete would render the ground susceptible to rain penetration and how the water lubrication of the soil would reduce inter-granular friction making it more susceptible to disturbing forces and transmission of surface loads but concluded:- "Now, the extent to which that takes place I can't say. It's very easy to over-egg the pudding, but it is nevertheless, I think, a consideration." I also consider that the judge was unduly critical of Mr Croucher in characterising an email of 16 April 2009 sent by him to Mr Stanley and copied to Mr Stanley's solicitor as appearing "to go beyond the usual role of an expert witness by advising them on the evidence they needed to meet the opposing case." The judge was also impliedly critical of Mr Croucher's response to being taxed with this document in cross-examination to the effect that he owed a dual duty to the court and to his "client", the parentheses being those of the judge. Mr Croucher was quite right to observe that he owed a duty to his client as well as to the court. This is inherent in CPR 35.3 which provides:- "35.3(1) It is the duty of experts to help the court on matters within their expertise. (2) This duty overrides any obligation to the person from whom experts have received instructions or by whom they are paid." Practice Direction 35 at paragraph 4.1 explains how experts must approach their task when giving or preparing evidence for the purpose of proceedings:- "4.1 Experts always owe a duty to exercise reasonable skill and care to those instructing them, and to comply with any relevant code of ethics. However when they are instructed to give or prepare evidence for the purpose of civil proceedings in England and Wales they have an overriding duty to help the court on matters within their expertise (CPR 35.3). This duty overrides any obligation to the person instructing or paying them. Experts must not serve the exclusive interest of those who retain them." Experts are often involved in the investigation and preparation of a case from an early stage. There is nothing inherently objectionable, improper or inappropriate about an expert advising his client on the evidence needed to meet the opposing case, indeed it is often likely to be the professional duty of an expert to proffer just such advice. The opinion of an expert is often if not usually dependent upon the precise nature of a factual situation which he must to some extent assume to have existed. There is nothing improper in pointing out to a client that his case would be improved if certain assumed features of an incident can be shown not in fact to have occurred, or if conversely features assumed to have been absent can in fact be shown to have been present. The judge's criticism of Mr Croucher was in my view in this respect misplaced. More pertinently however Mr Croucher did observe in his email "We need to be very careful to avoid putting too much emphasis on the treatment of the ground on Mr and Mrs Rawlinson's side prior to the collapse of the wall." That cautious approach foreshadows that which he adopted when introducing the rainwater theory in his examination in chief. The rainwater theory was never likely to carry the day. Mr Croucher noted in his first report that the subsoil type was not of a nature that was susceptible to slow volume change when taking up or expelling water. The subsoil exposed in the trial pit was predominantly sand and conditions were not believed to vary significantly across the plot. There was no standing ground water in the trial pit. The rainfall overnight on 6/7 October was not out of the ordinary and had been negligible in the previous three days. Furthermore Mr Croucher had also commented in his first report on the stability of the south-eastern boundary wall of the two properties, a wall which had shown movement over the years but which did not collapse on the night of 6/7 October as did the south-western wall. In relation to the former wall Mr Croucher gave it as his opinion:- "Water pressures on the retained sides of the walls and their foundations below ground level are unlikely to occur due to the topography and nature of the subsoil." In answers given to the judge and in cross-examination Mr Croucher gave no satisfactory explanation as why the same was not equally true of the south-western wall. Indeed he appears to have accepted that the only reason for not in his report treating the significance of hydrostatic pressure on an equal footing for both walls was his assumption, subsequently falsified, that the resurfacing works involved raising the ground level on the Rawlinsons' side. The judge made clear at paragraph 13 of his judgment that his "main reason" for his conclusion that the works carried out before 7 October are not likely to have had any material effect on the ability of the wall to withstand wind pressure was not the poor view he formed of Mr Croucher's evidence but rather the insubstantial nature of the work so far as concerns contact with the wall or disturbance of the soil. Mr Newman submitted that if the judge had approached Mr Croucher's evidence in a more generous spirit, recognising the difficulties in which he had been placed before trial by the uncertain state of the evidence, a matter beyond his control, and without unfair criticism of his objectivity, he would necessarily have accepted the "rainwater theory" as explaining why the wall collapsed on this occasion. I am afraid that I cannot accept that submission. In my view it would have been very surprising if the judge had reached that conclusion. His finding that the Claimants could not show on the balance of probability that the works led to any increase in the pressure or any other forces exerted on the wall seems to me both principled and right. The removal of the concrete which had lain over part of the ground adjacent to the wall and the disturbance of the soil could be at best "a consideration". I also reject Mr Newman's criticism that the judge was not entitled to regard the views of the experts as informing his own view that the works were in the relevant respect minor in nature. Mr Leeds did not describe the groundwork carried out prior to 7 October as "a fairly significantly amount of work". His use of that expression was plainly descriptive of the entire programme of works undertaken by the Rawlinsons as set out at paragraph 8 of the judge's judgment. Mr Newman was also critical of the judge's acceptance of Mr Leeds' evidence as to the significance of local topography in influencing the effect of wind on structures and as to the limited value of evidence as to wind speeds recorded at another location when assessing the pressures previously exerted on this wall. In that regard the Claimants introduced into the trial bundle a few days before trial a record of dates on which, in the years between 1987 and 2001, a maximum gust speed equal to or greater than 49 mph had been measured at the Wattisham Meteorological Station. The significance of 49 mph is that the General Monthly Survey for Wattisham for October 2001 recorded the maximum gust speed on 7 October as 49.5 mph.[1] The maximum recorded for 6 October was 29.9 mph. It was this evidence which gave rise to the point raised by Mr Croucher at trial as to the significance of the wall not having previously collapsed despite higher wind speeds having been measured at the weather station. Wattisham is approximately twenty miles distant from Mistley. I am a little surprised at this criticism of the judge as it seems to me that both Mr Croucher and Mr Leeds gave evidence broadly to the effect that the measurement of wind speed at a station remote from the site cannot be regarded as necessarily typical of the wind speed at a wall within a cluster of buildings in an urban (or at any rate a built-up) area. That would also seem to me common sense, derived from the common experience that the effect of wind can be very localised. Likewise I do not find very persuasive an argument to the effect that because an old, leaning and poorly maintained wall had not fallen down in high winds in the previous fourteen years so then on this occasion some minor works in the area adjacent to it must necessarily have made all the difference. The Claimants have gone so far as to seek permission to introduce fresh evidence on this point, evidence which they accept would, if admitted, and if it shows the judge's approach to have been flawed, necessitate a retrial. The evidence in question is a report of Dr Stephen Dorling, a Chartered Meteorologist. However, far from showing that Mr Leeds was wrong, Dr Dorling confirms that "the precise weather conditions experienced at a particular location are always affected by local topography". He goes on:- "However, in order for insurance companies to be able to address the validity of a weather-related claim in a practical, timely and fair way, weather conditions at the closest neighbouring reporting stations are used to inform their response. This is the practice across the insurance industry and the approach is recognised by the Financial Ombudsman . . ." This industry practice is no doubt a practical initial approach to claims handling, but it does not assist here and it does not detract from the accuracy of Mr Leeds' evidence on the point. I cannot therefore accept Mr Newman's submission that the evidence contained in the report of Dr Dorling could have had an important influence on the trial because it challenges the evidence given by Mr Leeds. It follows that on that ground alone I would not admit the fresh evidence. It is unnecessary to consider to what extent the traditional Ladd v Marshall [1954] 1 WLR 1489 principles should continue to inform the admission of fresh evidence by this court. However I would just observe that the submission by Mr Newman, that it only became apparent during the course of the trial that such evidence could be required in order to rebut the evidence of Mr Leeds, is a grotesque distortion of what in fact occurred. It was the Claimants who, without explanation and without introduction of fresh supporting expert evidence or any other foreshadowing of the point sought to be made, put into the trial bundle shortly before trial the evidence as to wind speeds recorded at Wattisham over the previous fourteen years. They can hardly complain that at trial Mr Leeds expressed a view about its relevance which he in turn had had no previous opportunity to adumbrate. The evidence of Dr Dorling could on any showing with reasonable diligence have been made available for use at trial. Invocation of the overriding objective and reference to "an unfair playing field" can hardly lead in such circumstances to the introduction of fresh evidence necessitating a retrial. As it is, for the reasons I have given, the fresh evidence is in any event of no assistance to the Claimants. In my judgment there is nothing in the point that the wall had apparently withstood higher winds on earlier occasions. Since I would not disturb the judge's findings, it follows that Mr Newman's last point, to the effect that the judge may have misunderstood and misapplied the decision in Dalton v Angus [1881] 6 App Cas 740 concerning the easement of support does not arise. I would dismiss this appeal. Mrs Justice Baron I agree. Lord Justice Laws I also agree. Note 1   In the light of the more detailed report of Dr Dorling to which I refer below, it may be a moot point whether a gust of that magnitude was recorded overnight 6/7 October as opposed to later in the day on 7 October. The trial was conducted on the agreed basis that there were high winds in the night and that this was the immediate cause of the collapse.    [Back]

O R D E R Arising out of SLP C No. 17418/2006 Leave granted. Appellant is aggrieved by a portion of the order dated 8.8.2006 passed by the Hight Court of Judicature at Allahabad, Lucknow Bench, whereby it was directed So far as the 50 back wages is companycerned, it shall be made available to the Respondent provided the enquiry companycludes in his favour by the companypetent authority. Appellant was dismissed from services of the respondent. He questioned the validity of the said order of dismissal by filing a writ petition. The said order of termination was set aside by a learned single Judge of the High Court with a direction to the respondent for payment of 50 back wages. The period between the dismissal and reinstatement was also directed to be treated as the period spent on duty, determining other service benefits. The respondent preferred an intra-Court appeal therefrom. A Division Bench of the High Court, while affirming the finding of the learned Single Judge that the enquiry proceedings pursuant whereto and in furtherance whereof an order of dismissal was passed, was violative of the principles of natural justice, issued the afore-mentioned direction. The learned companynsel appearing on behalf of the respondent has relied upon the decision of this Court in Managing Director, ECIL, Hyderabad and Ors. vs. B. Karunakar and Ors. 1993 4 SCC 727, wherein it was opined Hence, in all cases where the enquiry officers report is number furnished to the delinquent employee in the disciplinary proceedings, the Courts and Tribunals should cause the companyy of the report to be furnished to the aggrieved employee if he has number already secured it before companying to the Court Tribunal and give the employee an opportunity to show how his or her case was prejudiced because of the number-supply of the report. If after hearing the parties, the Court Tribunal companyes to the companyclusion that the number-supply of the report would have made numberdifference to the ultimate findings and the punishment given, the Court Tribunal should number interfere with the order of punishment. The Court Tribunal should number mechanically set aside the order of punishment on the ground that the report was number furnished as is regrettably being done at present. The companyrts should avoid resorting to short cuts. Since it is the Courts Tribunals which will apply their judicial mind to the question and give their reasons for setting aside or number setting aside the order of punishment, and number any internal appellate or revisional authority , there would be neither a breach of the principles of natural justice number a denial of the reasonable opportunity. It is only if the Court Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment. Where after following the above procedure, the Court Tribunal sets aside the order of punishment, the proper relief that should be granted is to direct reinstatement of the employee with liberty to the authority management to proceed with the inquiry, by placing the employee under suspension and companytinuing the inquiry from the stage of furnishing him with the report. The question whether the employee would be entitled to the back-wages and other benefits from the date of his dismissal to the date of his reinstatement if ultimately ordered, should invariably be left to be decided by the authority companycerned according to law, after the culmination of the proceedings and depending on the final outcome. If the employee succeeds in the fresh inquiry and is directed to be reinstated, the authority should be at liberty to decide according to law how it will treat the period from the date of dismissal till the reinstatement and to what benefits, if any and the extent of the benefits, he will be entitled. The reinstatement made as a result of the setting aside of the inquiry for failure to furnish the report, should be treated as a reinstatement for the purpose of holding the fresh inquiry from the stage of furnishing the report and numbermore, where such fresh inquiry is held. That will also be the companyrect position in law. Karunakar supra , therefore, is number an authority for the proposition that the High Court should preempt the exercise of jurisdiction of a Competent Authority. It was for the Competent Authority to deal with the matter. In the event the appellant is exonerated from the charges, he may number be found to be disentitled from claiming the entire back wages. What would be the nature of punishment even if he is found guilty in the disciplinary proceedings, cannot be a matter of surmises and companyjecture.

OPINION OF ADVOCATE GENERAL LENZ delivered on 11 July 1991 ( *1 ) Mr President, Members of the Court, A — Facts 1. The questions for a preliminary ruling on which I am to give my opinion today were referred to the Court by the Tribunal de Premiere Instance, Brussels, in criminal proceedings. The case calls for an assessment in the light of Community law of national monopolies over the provision of services in the field of telecommunications which are at the same time responsible for approving telecommunications equipment and monitoring the provisions relating to type-approval and are themselves competitors in the market in telecommunications equipment. 2. The accused in the main proceedings were prosecuted for having offered cordless telephones for sale or hire without the necessary authorization of the Régie des Télégraphes et Téléphones (‘the RTT’). They were also charged with being in possession of or operating cordless telephones and a pair of walkie-talkies without the written, personal and revocable authorization of the competent minister. 3. The national court is uncertain as to the compatibility with Community law of the national provisions on which the criminal proceedings were based and has therefore referred the following questions to the Court for a preliminary ruling: ‘Are Articles 37 and 86 of the Treaty establishing the European Economic Community to be interpreted as prohibiting, in the field of radiocommunications and private radiocommunications, legal provisions such as the Law of 30 July 1979 and the Royal Decree of 15 October 1979, which impose penalties of imprisonment and/or fines on persons who have: (1) offered for sale or hire a transmitter or receiver, in this case cordless telephones, without type-approval having been granted by the RTT, or (2) kept, set up or operated transmitters, in this case cordless telephones and a pair of walkie-talkies, without obtaining the written, personal and revocable authorization of the competent minister?’ 4. For details of the facts of the main proceedings, the legislative background to the case and the submissions of the parties, reference is made to the Report for the Hearing. I shall refer to the contents of the documents before the Court only in so far as is necessary for my reasoning. B — Analysis 5. The wording of the questions referred to the Court suggests that the national court's doubts relate to the compatibility with Community law of the obligation to obtain authorization or type-approval under pain of a fine. The context of the request for a preliminary ruling, however, makes it possible to view the question in a different light. Thus it is not in fact the obligation to obtain authorization or type-approval that the national court regards as problematical, but rather the way in which that obligation combines with the position conferred on the RTT in the field of radiocommunications and private radiocommunications, which includes the operation of the telephone network and the sale of equipment for connection to the network. In its order for reference, the national court establishes that the RTT represents ‘a kind of monopoly’. The national court expresses doubts as to the compatibility of the RTT's position with the fundamental rules of the Treaty on the free movement of goods and with the provisions on competition. In order to answer the question referred to the Court it will therefore be necessary to interpret the relevant Treaty provisions against the background of the position conferred on the RTT. 6. A reference for a preliminary ruling raising similar problems is currently pending before the Court. ( ) In that case the national court based its doubts in relation to Community law on the fact that the RTT could determine the conditions for the type-approval of equipment intended to be connected to the public telecommunications network. Apart from the questions of the means of redress and the reparation of the loss arising out of an infringement of the relevant provisions, in Case C-18/88 the national court took the view that the requirement for type-approval of equipment which could be connected to the public network raised problems. In that case the judgment has yet to be delivered. However, Advocate General Darmon has already delivered his Opinion, on 15 March 1989. 1. The provisions on the free movement of goods 7. The combination of different functions in the RTT as the sole operator of the public communications network together with the requirement for type-approval of equipment intended to be connected to the network, which is also exercised by the RTT, and finally that undertaking's competence to monitor the relevant provisions may be contrary to the rules on the free movement of goods laid down in the EEC Treaty. The problem is further aggravated by the fact that the RTT is a competitor in the market for the sale of radio transmitting and receiving equipment. 8. The national court referred expressly only to Article 37 of the EEC Treaty in giving the reasons for its doubts as to the compatibility of the RTT's monopolistic position with the principle of the free movement of goods. However, in examining the Community law issue the Court is not limited to interpreting the articles of the Treaty cited by the national court. For the purpose of answering the questions referred to it the Court may find it helpful to interpret other provisions of relevance to those questions. 9. (a) It is appropriate to begin with Article 30 of the EEC Treaty, which prohibits quantitative restrictions on imports and all measures having equivalent effect. The application of Article 30 of the EEC Treaty to the present case raises the problem, first, of the extent to which the free movement of goods in general is impeded by the requirement for type-approval and the control of that approval. According to the broad interpretation of Article 30 in the case-law of the Court, a measure having equivalent effect exists whenever a trading rule enacted by a Member State is capable of hindering, directly or indirectly, actually or potentially, intra-Community trade. ( ) 10. It might be possible to take the view that, if the requirements for type-approval did not exist, equipment which does not in fact satisfy the conditions for approval might be imported into Belgium and sold on the Belgian market, and that the obligation to obtain approval might consequently have the effect of an obstacle to trade. 11. In order to fall within the scope of Article 30 of the EEC Treaty the potential obstacle to trade must be the consequence of trading rules adopted by the State. The Belgian Government therefore rightly draws a distinction in its submissions between the Belgian State and the RTT, a public undertaking. The way in which the powers of type-approval and control are exercised by the RTT cannot therefore be attributed to the Belgian State, but is to be regarded as the autonomous conduct of the independent undertaking. In those circumstances the only conduct which can be attributed to the Belgian State is the fact of establishing a requirement for type-approval and entrusting a public undertaking with implementing the approval procedure. 12. Since the requirement for type-approval is applicable as such to both domestic and foreign goods in the same way, it does not specifically affect imported goods. In fact trading rules which apply equally to domestic and foreign products may also infringe Article 30 of the EEC Treaty, ( ) although only in so far as they are not necessary in order to satisfy mandatory requirements. 13. In the present case consumer protection, the fairness of trade and in particular the protection of the telecommunications network operated in the public interest are to be considered as such requirements. Both the operation of the network and the administration of the frequencies are in the interest of the proper functioning of the telecommunications and radio service. Testing the safety of equipment intended to be connected to the network likewise serves the maintenance of a functioning radio and telephone service. In that regard, cordless telephones also come within the category of equipment intended to be connected to the network since, although not physically joined to the telephone network, they are only capable of operating through it. The same applies to walkie-talkies. A reliable administration of the frequencies is possible only if interference caused by the use of unauthorized equipment is avoided. 14. As regards the requirement for the type-approval of telephone equipment, Advocate General Darmon also speaks in his Opinion in Case C-18/88 of the imperative requirements in the public interest of the protection of users and of the preservation of the proper operation of the telecommunications network. ( ) The same considerations must apply to the approval of cordless telephones. The type-approval procedure does not therefore constitute a breach of Article 30. 15. It follows that there is no need to examine, from the point of view of Article 36 of the EEC Treaty, the circumstances justifying possible restrictions on imports or exports within the meaning of Articles 30 and 34 of the EEC Treaty, although any such obstacles may conceivably be justified from the points of view of public policy or public security. 16. If it could be established that the way in which the approval procedure is implemented constituted an obstacle, that would not be a matter for Article 30 of the EEC Treaty, since such conduct is directly attributable to the public undertaking and not to the State. 17. Apart from the question of attributability, an administrative practice which obstructs imports can constitute a measure prohibited under Article 30 of the EEC Treaty only where it ‘show [s] a certain degree of consistency and generality’; ( ) and, depending on the circumstances of the case, the treatment of a single undertaking may fulfil that condition. ( ) 18. The real problem in this case is in my view not the requirement for type-approval and the fact that its implementation is ensured by criminal sanctions but the conflict of interests inherent in the fact that functions which are virtually those of a public authority have been conferred on the RTT, in so far as it is competent to approve equipment and to bring criminal proceedings in the event of any breaches of the relevant provisions, and yet it is a competitor in the market in telecommunications equipment. The conflict of interests does not in itself constitute a case which comes under Article 30 of the EEC Treaty, however. 19. If that conflict of interests were to give rise to a discriminatory practice in the implementation of the type-approval procedure and the prosecution of offences against the requirements for approval, then at the very most that might be relevant as a discriminatory administrative practice by a public undertaking within the framework of Article 37, or the Community rules on competition, as the case may be. 20. (b) Within the framework of the provisions on the free movement of goods, Article 37 of the EEC Treaty must be examined as a possibly relevant special provision. Article 37 provides that any State monopolies of a commercial character arc to be adjusted so as to ensure that ‘when the transitional period has ended no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States’. 21. In the context of that examination, it should be pointed out at the outset that the RTT has no monopoly of a commercial character. It has no monopoly in either the import or the marketing of telecommunications equipment. On the other hand, as the sole operator of the telecommunications network it has a monopoly in the provision of services. The question arises to what extent that monopoly is influenced by the fact that the RTT is empowered to implement and monitor the type-approval procedure. Both the approval of equipment and the monitoring of compliance with the relevant provisions are virtually functions of public power. However, the exercise of those functions does not make the monopoly in the provision of services a monopoly of a commercial character. 22. Those considerations apart, the mere existence of a monopoly of a commercial character is still not contrary to Article 37, which limits the requirements to adjust monopolies of a commercial character to what is necessary to preclude discrimination regarding the movement of goods. Nor does the fact that the monopoly in question is a monopoly in the provision of services have the inevitable consequence that the applicability of Article 37 of the EEC Treaty is precluded a priori. According to the second subparagraph of Article 37(1), Article 37 applies to ‘any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States’. 23. The Court has since held on a number of occasions that Article 37 is aimed at trade in goods and not at a monopoly in the provision of services. None the less, it cannot be ruled out that a monopoly in the provision of services may have an indirect influence on trade in goods between Member States. ( ) Whether the RTT's activity actually has a negative effect on the trade in telecommunications equipment between the Member States remains open but the possibility of such an obstacle is assumed in the argument. Such assumptions do not suffice to establish an infringement of Article 37 of the EEC Treaty, however, since the wording of that provision shows that it is necessary to prove the existence of discrimination and, according to the case-law of the Court, there is no discrimination when imported products are subjected to the same conditions as imported products subject to the monopoly. ( ) 24. A further consideration, which is also to be found in the submissions of the Belgian Government, speaks against classing the business activities in question as monopolistic conduct incompatible with Article 37 of the EEC Treaty. The exercise of the monopoly to provide services, in the form of the operation of the telecommunications network and the administration of the frequencies, does not have a negative influence on trade between the Member States. Moreover, the approval and monitoring of telecommunications equipment is not an economic activity but has the characteristics of public authority. The alleged obstacle to trade must result from ‘activities intrinsically connected with the specific business of the monopoly’. ( ) 25. Unequal treatment due to the structure of the legal provisions cannot be established, since the provisions relating to type-approval are applicable to domestic and foreign products without distinction. If the way in which they are implemented by the monopolistic undertaking leads to discrimination, it is at the very most an infringement of the Community rules on competition that is to be considered. 2. The Treaty provisions on competition 26. Articles 85 and 86 of the EEC Treaty are aimed at undertakings and are therefore not directly applicable to a situation which calls for an assessment of the position and conduct of a public undertaking. Article 90(1), however, provides that in the case of public undertakings and undertakings to which they grant special or exclusive rights, Member States are neither to enact nor to maintain in force any measure contrary to the rules contained in the EEC Treaty, in particular to those rules provided for in Article 7 and Articles 85 to 94. On the basis of that provision and with reference to Member States' duties under Article 5 of the EEC Treaty, the Court has repeatedly held that Member States are not allowed to enact measures which could deprive Articles 85 and 86 of the EEC Treaty of their effectiveness. ( ) 27. It is therefore necessary to establish whether the position conferred on the RTT, which is characterized by the fact that it has a monopoly to provide services and is also competent to approve the relevant equipment and to monitor compliance with the conditions for approval, constitutes a breach of the prohibitions in Article 86 of the Treaty, in view of the circumstance that the RTT is also a competitor in the market for telecommunications equipment. Therefore the issue is not, I reiterate, the RTT's conduct in the market but the combination in a public undertaking, as a result of State action, of different responsibilities which have the character of exclusive rights. 28. That situation, which in itself involves a conflict of interests, has already formed the subject-matter of a judgment of the Court in another context. The Commission, acting on the basis of Article 90(3) of the EEC Treaty, adopted a directive on competition in the markets in telecommunications terminal equipment, by which it intended to preclude for the future a combination of tasks of the type at issue in the present proceedings. ( ) Article 6 of the directive provides that ‘responsibility for drawing up the specifications ..., monitoring their application and granting type-approval is [to be] entrusted to a body independent of public or private undertakings offering goods and/or services in the telecommunications sector’. 29. A number of Member States brought actions before the Court of Justice against that directive. ( ) In the proceedings the Member States in question claimed, inter alia, that the Commission had no power to adopt the provision in question on the basis of Article 90(3) of the EEC Treaty. In its judgment the Court expressed its views on the problem with which wc arc concerned — the combination of tasks in a public undertaking. ( ) 30. The Court observed that a system of undistorted competition can be guaranteed only if equality of opportunity is secured as between the various economic operators. To entrust an undertaking which markets terminal equipment with the task of drawing up the specifications for such equipment, monitoring their application and granting type-approval in respect thereof is tantamount to conferring upon it the power to determine at will which terminal equipment may be connected to the public network, and thereby placing that undertaking at an obvious advantage over its competitors. For those reasons the Court approved the separation prescribed by the Commission between undertakings providing services or goods and the authorities granting type-approval. 31. Since the Court did not declare Article 6 of Commission Regulation 88/301/EEC void, it must be assumed that it has produced legal consequences since 1 July 1989. ( ) Since that time, therefore, the fact that responsibility for drawing up the specifications, monitoring their application and granting type-approval is entrusted to an undertaking offering goods and/or services in the telecommunications sector has been contrary to Community law. It is for the courts of the Member States, where necessary, to draw the legal consequences from that situation. 32. The Commission's powers to take action within the framework of Article 90(3) of the EEC Treaty are not the same as its powers under Article 169 to make a finding that a Member State has infringed the Treaty. For that reason it is not necessary that a situation contrary to the Treaty exists ( ) before the Commission can adopt directives or take decisions on the basis of Article 90(3). Furthermore, the Commission has a certain degree of discretion when it gives concrete form to the Member States' obligations in pursuance of Article 90(3) of the EEC Treaty. The fact that the Commission takes action under Article 90(3) does not therefore in itself imply that there has necessarily been an infringement of the Treaty. 33. While the decision in Case C-202/88 concerned the same conflict of interests as underlies the present reference for a preliminary ruling, it did not directly answer the questions referred to the Court in the present case. The issue in the present case is whether a situation created by State action which is likely to produce conflicts of interests — even though they have not yet arisen — already constitutes an infringement of Article 86 in conjunction with Article 90(1) of the EEC Treaty. However, that judgment undoubtedly provides an indication of how the questions referred by the national court should be answered, especially since the competence of the Commission to address directives and decisions to the Member States in pursuance of Article 90(3) of the EEC Treaty extends to the exercise of its authority to control the application of Article 90 of the EEC Treaty. That means that the lawful exercise of the competence requires at least the existence of a danger or a presumption of a situation incompatible with the Treaty. 34. For there to be an infringement of Article 86 in conjunction with Article 90(1) of the EEC Treaty, the public undertaking must occupy a dominant position within the meaning or Article 86 of the EEC Treaty and there must also be an abuse of that position. The assessment of the situation is ultimately a matter for the national court. It is for the Court of Justice, however, to indicate the criteria by which the substance of the case is to be determined. 35. (a) First, the undertaking must occupy a dominant position within the meaning of Article 86 of the EEC Treaty. Where an undertaking has been vested with a legal monopoly a positive answer to the question whether it occupies a dominant position does not in itself raise any problems. ( ) Where an undertaking combines various functions the answer may depend on which of the functions is to be taken into account. It is necessary to draw that distinction in the present case since there is at least a dual monopoly. 36. The first to be taken into consideration is the monopoly in the provision of services, which concerns the operation of the telecommunications network and the administration of the frequencies. Closely associated with that monopoly is the marketing of telecommunications equipment in the form of the sale and hire of equipment to be used to receive the service provided. 37. If, in order to determine the relevant market, one takes into consideration the sphere of the provision of services, there is no doubt as to the dominant position of the undertaking, owing to its monopoly position. The situation is different if one takes into consideration the sphere of the marketing of equipment. In that sector competition is in principle both possible and present. Whether there is any interference with the competition at that level falls to be determined in the overall assessment. 38. If the relevant market is defined as the market in telecommunications equipment in general and the market in cordless telephones and walkie-talkies in particular, there is no reason why a public undertaking such as the RTT should not occupy a dominant position on that market. According to the case-law of the Court of Justice, a dominant position within the meaning of Article 86 of the EEC Treaty is a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by giving it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers. ( ) The dominant position may consist in the fact that due to the combination of its monopoly to supply services and its position as a supplier of equipment the undertaking is in a position of supremacy over other suppliers of equipment which permits it to act in that independent manner. 39. A dominant position characterized in that or a similar way is considerably strengthened by the fact that, by virtue of legislative provisions, the same undertaking is empowered to approve telecommunications equipment or to authorize its use and also monitors compliance with the provisions relating to approval. 40. Moreover, the type-approval of equipment in itself represents an objectively delimited market over which the undertaking enjoys a monopoly position because it is granted what are virtually powers of public authority in the fields of type-approval and the monitoring of the relevant provisions and by that fact alone already occupies a dominant position. ( ) That consideration underlines the extent of the strength of the position in the market for telecommunications equipment. The dominant position in the objectively delimited market must, according to Article 86 of the EEC Treaty, extend to the common market or a substantial part of it. According to the case-law of the Court of Justice, the territory of a Member State to which such a monopoly extends is a substantial part of the common market. ( ) 41. The fact that an undertaking as such is granted a monopoly position in one way or another (operation of the network and administration of the frequencies on the one hand and authority to grant type-approval for equipment and to monitor compliance with the relevant provisions on the other) is, according to the case-law of the Court of Justice, not as such incompatible with Articles 90 and 86 of the EEC Treaty. ( ) 42. (b) There must also be the element of abuse of a dominant position. In that regard it must be taken into consideration that the transfer of public authority does not in itself constitute an abuse. ( ) Furthermore, it should be observed that the fact of granting an exclusive power to an undertaking cannot be regarded as constituting a dominant position and at the same time an abuse of that position. ( ) 43. As defined in the case-law of the Court of Justice, the concept of abuse is an objective concept relating to the behaviour of an undertaking in a dominant position which is such as to influence the structure of a market where, as a result of the very presence of the undertaking in question, the degree of competition is weakened and which, through recourse to methods different from those which condition normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing in the market or the growth of that competition. ( ) 44. A feature of the present case is that it is the structure created by legislative measures as such rather than, for instance, any particular conduct on the part of the public undertaking that falls to be assessed as to its compatibility with the Community rules on competition. 45. In previous case-law the abuse within the meaning of Article 86 of the EEC Treaty had to be constituted by the conduct of the undertaking in a dominant position. However, the Court has already taken the view in the Continental Can judgment ( ) that there is abuse of a dominant position ‘if an undertaking in a dominant position strengthens such position in such a way that the degree of dominance reached substantially fetters competition, i. e. that only undertakings remain in the market whose behaviour depends on the dominant one’. ( ) In that case the ‘impact on an effective competition structure’ ( ) was sufficient to be caught by the prohibition in Article 86 of the EEC Treaty, ‘regardless of the means and procedure by which [the dominant position was] achieved’. ( ) 46. In earlier judgments ( ) in which the Court had to consider situations created by State measures which threatened competition, the element of abuse was always found to be present or considered to be necessary to constitute an infringement of Article 86 of the EEC Treaty, in the form of conduct in the relevant market. 47. More recent judgments, in Case C-41/90 ( ) concerning an exclusive right of employment procurement and Case C-260/89 ( ) concerning a dual monopoly for the broadcasting and exploitation of television broadcasts, are ambiguous on that point, at least in the grounds of the judgments. In Case C-41/90 the Court held that a Member State was in breach of the prohibition contained in Article 90(1) and Article 86 of the EEC Treaty only if the undertaking in question, merely by exercising the exclusive right granted to it, could not avoid abusing its dominant position. ( ) 48. An abuse in the form of limiting the service to the prejudice of consumers within the meaning of Article 86(2)(b) of the EEC Treaty may consist in the fact that a Member State creates a situation in which the undertaking is manifestly not in a position to satisfy the demand prevailing on the market for activities of that kind, when the effective pursuit of such activities by private companies is rendered impossible by the maintenance in force of a statutory provision. ( ) 49. The Court of Justice delivered its judgment in Case C-260/89 on 18 June 1991. Paragraph 4 of the German version of the operative part of the judgment is worded as follows: ‘Artikel 90 Absatz 1 EWG-Vertrag steht der Einräumung eines ausschließlichen Rechts zur Ausstrahlung von Sendungen und eines ausschließlichen Rechts zur Übertragung von Fernsehsendungen an ein einziges Unternehmen entgegen, wenn durch diese Rechte eine Lage geschaffen werden könnte, in der dieses Unternehmen durch eine seine eigenen Programme bevorzugende diskriminierende Sendepolitik gegen Artikel 86 EWG-Vertrag verstößt; ...’ ( ) 50. Although in that wording the accent is on the situation created by the State measures, it may none the less be taken to mean that a discriminatory broadcasting policy on the part of the undertaking must actually be established for it to fall under the prohibition laid down in Community law. In the French version of the judgment the emphasis has a different nuance. That version reads as follows: ‘L'article 90 paragraphe 1 du traité s'oppose à l'octroi d'un droit exclusif de diffusion et d'un droit exclusif de retransmission d'émissions de télévision à une seule entreprise, lorsque ces droits sont susceptibles de créer une situation dans laquelle cette entreprise est amenée a enfreindre l'article 86 par une politique d'émission discriminatoire en faveur de ses propres programmes,...’ ( ) 51. I take that wording to mean that a State measure is prohibited if it is liable to place an undertaking in, or lead an undertaking into, a situation in which it infringes Article 86 of the EEC Treaty by virtue of a discriminatory broadcasting policy, although no actual breach by the undertaking is required to render the State measure contrary to Community law. 52. In my Opinion in Case C-260/89 I stated in paragraphs 40 and 41 that ERT's dual monopoly was in itself contrary to Community law. To my mind the tendency towards an abuse in the structure already merits criticism in itself and deserves to be held incompatible with Article 90(1) in conjunction with Article 86 of the EEC Treaty. 53. Continuing that approach, I am also of the opinion, as regards the situation to be assessed in the present case, that the combination of different exclusive rights and tasks in one public undertaking which is at the same time a competitor in the market for telecommunications equipment constitutes an abuse within the meaning of Article 86 of the EEC Treaty. 54. Competition which has already been weakened by the existence of a public undertaking which enjoys a monopoly to provide services in regard to the operation of the telecommunications network and at the same time markets equipment intended to be connected to the network may be further hindered where that the same undertaking decides whether to grant type-approval for competing equipment and exercises public authority to monitor compliance with the relevant provisions. The latter authority is quite different from a means of ‘normal competition in products or services’. ( ) 55. (c) As the third element, apart from the dominant position and the abuse of that position, the structure in question must be such as to affect trade between Member States. It is sufficient that it is capable of having that effect. ( ) Since, according to the documents before the Court, cordless telephones and walkie-talkies are imported by Belgium from Denmark and Germany, ( ) products from other Member States are also subject to the requirement to obtain type-approval. 56. (d) I shall conclude my considerations of the interpretation of Articles 90 and 86 of the EEC Treaty by observing that according to Article 90(2) undertakings entrusted with the operation of services of general economic interest are to be subject to the rules on competition only ‘in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them’. 57. On that point, I believe that I can be brief. The problem in the present case is not the conferring of tasks as such on a public undertaking but the combination of those tasks in an undertaking which is also a competitor in the market. Those tasks might be performed equally well if they were given to different authorities. Costs 58. Since these proceedings are in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court. The costs incurred by the Belgian Government and the Commission are not recoverable. C — Conclusion 59. In the light of the foregoing observations, I suggest that the Court should answer the question referred to it as follows: Where national legislation allows a public undertaking which operates the telephone network to enter the market as a provider of telephone equipment and at the same time empowers that undertaking to approve equipment intended to be connected to the network and to bring prosecutions in respect of offences against the regulations on admission to the market, that constitutes a measure contrary to Article 86 of the EEC Treaty for the purposes of Article 90(1). ( *1 ) Original language: German. ( ) Case C-18/88 RTT v GB-Inno-BM [1991] ECR I-5941. ( ) Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837 ( ) Case 120/78 REWE Zentrale v Bundesnionopolvem allang fur Branntwein [1979] ECR 649. ( ) Opinion in Case C-18/88, point 13. ( ) Case 21/84 Commission v France [1985] 1355, paragraph 13. ( ) Opinion in Case 21/84, cited above, and judgment, paragraph 13. ( ) Case 155/73 Sacchi [1974] 409, paragraph 6 cl seq.; Casc 271/81 Amelioration ile l'Élevage v Mialocq [1983] 2057, naragraph 8 et seq. and Casc 30/87 líoäson v Pompes Funebres ties Regions libérées [ 1988] 2479, paragraph IG et seq., most recently Case C 260/89 ERT:1991; IXR 1 2925, para graph 15 et seq., and Opinion, paragraph 24 ct scq ( ) Case 13/70 Cinzano v Hauptzollamt Saarbrücken [1970] ECR 1089, paragraph 9. ( ) Case 86/78 Peureux v Services Fiscaux de la Haute-Saône et du Territoire de Belfort [1979] 897, paragraph 35. ( ) Case 13/77 Inno v ATAB [1977] ECR 2115, paragraph 28 et seq. and Joined Cases 209/84 to 213/84 Ministere Public v Asjes (‘Nouvelles Frontières’) [1986] ECR 1425, paragraph 71 et seq.; Case 66/86 Ahmed Saeed Flugreisen v Zentrale zur Bekämpfung unlauteren Wettbewerbs [1989] ECR 803, paragraph 47 et seq.; Case 231/83 Cullet v Leclerc [1985] ECR 305. ( ) Commission Directive 88/301'EEC of 16 May 1988 (OJ 1988 1. 131. p 73). ( ) Case C: 202/88 Iraner \Commission [1991] ECR I 1223 ( ) Case C: 202/88. cited above, paragraphs 51 and 52 ( ) Article 6 of Commission Directive 88/301/EEC provides that: ‘Member States shall ensure that, from 1 July 1989, respon sibility for drawing up the specifications referred to in Art! clc 5, monitoring their application and granting tvpc approval is entrusted to a body independent of public or private undertakings offering goods and/or services in the telecommunications sector.’ ( ) Case C-202/88, cited above, paragraph 18. ( ) Case 26/75 General Motors v Commission [1975] ECR 1367; Case 226/84 British Leyland v Commission [1986] ECR 3263; Case 311/84 CBEM v CLT and IPB [1985] ECR 3261; Case C-41/90 Hòfner and Eher v Macrotron [1991] ECR I-1979, paragraph 28; and Case C-260/89 ERT [1991] ECR I-2925, paragraph 31. ( ) See, lor example. Case 27/76 United Bruneti v Commision 1978; ECR 207, paragraph 65. ( ) Case 26/75 General Moton v Commissionm [1975] ECR 1367, paragraphs 7, 8 and 9, and Case 226/84, cited above, paragraph 3 et seq. ( ) Case 322/81, Michelin v Commission, cued above, para graph 28, and Case C 41/90 Hofner and Elser v Macrotron. cited above, paragraph 28. ( ) Case 155/73 Sacchi, cited above, paragraph 14. ( ) Case 26/75 General Motors v Commission, cited above, Case 226/84 British Leyland v Commission, cited above, and Case C-202/88 France v Commission, paragraph 55. ( ) Opinion in Case C-18/88 RTT v GB Inno BM, paragraph 34 et seq. ( ) Casc 85/76 Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 91. ( ) Case 6/72 Europemballage and Continental Can v Commission [1973] ECR 215. ( ) Case 6/72 Europemballage and Continental Can v Commission, cited above, paragraph 26. ( ) Case 6/72 Europemballage and Continental Can v Commission, cited above. ( ) Case 6/72 Europemballage and Continental Can v Commission, cited above, paragraph 27. ( ) Case 26/75 General Motors v Commission, cited above; Case 226/84 British Leyland v Commission, cited above, and Case 21/84 Commission v France [1985] 1355. ( ) Case C 41/90 Höfner and Elser v Macrotron, cited above (note 16). ( ) Case C 260/89 ERT, cited above (note 16). ( ) Case C 41/90 Hofner and Elser v Macrotron, cited above. paragraph 29 (emphasis added). ( ) Case C 41/90 Hofner and User v Macrolron, cited above, paragraphs 30 and 31 ( ) Case C 260/89 ERT. cited above (emphasis added). The English version of the relevant extract from the judgment is worded as follows: ‘Article 90(1) of the Treaty prohibits the granting of an exclusive right to transmit and an exclusive right to retransmit television broadcasts to a single under taking, where those rights are liable to create a situation in which that undertaking is led to infringe Article 86 by vir lue of a discriminatory broadcasting policy which favours its own programmes, unless the application of Article 86 obstructs the performance of tne particular tasks entrusted to it; ..’ ( ) Case C 26C/89 ERT. cited aboie (emphasis added) ( ) Case 85/76 Hoffmann-La Roche v Commission, cited above, paragraph 91. ( ) Case 322/81 Michelin v Commission [1983] ECR 3461, paragraph 104, and Case C-41/90 Höfner and Elser v Macrotron, cited above, paragraph 32. ( ) See the Belgian Government's answers to the questions put by the Court.

Mr Justice Warren : Introduction This Part 8 Claim concerns an occupational pension scheme known as the Urenco UK Limited Pension Scheme ("the Scheme"). It was established with effect from 26 March 1993 and is currently governed by a Trust Deed dated 21 April 2009 ("the Trust Deed"). It is a hybrid scheme providing benefits on both a defined contribution and a defined benefit basis. This action is concerned only with the defined benefits section. The Claimant ("Urenco") is the principal employer under the Scheme. Its business is the production of enriched uranium for the nuclear industry. Mr Richard Hitchcock appears on its behalf. The first Defendant ("the Trustee") is the sole trustee of the Scheme. Miss Naomi Ling appears on its behalf. The second Defendant ("Mr Mossop") is an active member of the Scheme. He had formally been a member of the Combined Pension Scheme ("the CPS"), a pension scheme provided by the United Kingdom Atomic Energy Authority ("the Authority"), a scheme which is not, it is to be noted, a trust scheme. He had been entitled to membership of the CPS by virtue of his employment by Sellafield Limited (formerly British Nuclear Fuels Ltd "BNFL"). His employment was transferred to Urenco with effect from 1 October 2008. This transfer took place as the result of a Sale and Purchase Agreement dated 29 February 2008 ("the SPA") made between the Nuclear Decommissioning Authority ("the NDA"), Sellafield Ltd and Urenco (under its then name Urenco (Capenhurst) Limited) to which I will come in due course. Mr Mossop was one of a small number of employees whose employment transferred under the SPA. I shall refer to them collectively as "the Transferred Employees". An order is sought pursuant to CPR 19.7(2) appointing Mr Mossop as representative of the Transferred Employees in whose interests it is to oppose certain changes to their future service benefits which have been proposed by Urenco and agreed to in principle by the Trustee. Although the SPA affects only a small number of individuals, the points in issue in this claim, or some of them at least, are relevant to a large number of other employees in the nuclear industry. The issues raised on the Claim Form are essentially these: i) Whether the Scheme's power of amendment (in relation to the future service benefits of the Transferred Employees) is constrained by Part 4 Schedule 8 Energy Act 2004 and if so, in what way and to what extent. ii) Whether the Scheme's power of amendment (in relation to the future service benefit of the Transferred Employees) is constrained by the SPA or the Undertaking referred to below. The Scheme It is necessary to mention for the purposes of these proceedings only a few provisions of the Scheme. The first relevant provision is the contribution rule applicable to the Transferred Members. It is common ground that this currently requires a member contribution of 7.5% of Pensionable Earnings under Clause G.2.1(b). That does not appear clearly from that Clause alone, but must, I think, be the result of that provision in the light of Clause F.1.2 notwithstanding that Clause G.2.1(b) applies only to Pensionable Members and that Pensionable Member is defined as a person admitted to membership "on or before 31 December 2007 under clause F.1.2…". Clause F.1.2 clearly envisages that certain post-31 December 2007 joiners will be Pensionable Members so that the words "or recognised as such" are to be treated as read into the definition after "31 December 2007". The second relevant provision is Clause K which is concerned with pension increases. The rate of increase in any year is to be agreed by Urenco and the Trustee but with a minimum of "the Indexation Factor". This factor is related to the "Index" which is the RPI or any index which may replace it or which might be used by the Secretary of State for the purposes of increases in public sector pensions. There is a slightly complex cap on indexation. If the employer contribution rate exceeds 12.5% (the Contributions Limit defined in Clause K.1.2), the minimum rate of increase may be reduced by such amount as the Actuary determines to be appropriate to reflect the increased employer contribution rate over the Contributions Limit. But this is subject to a proviso that the increase shall be 5%, or if it is less, the Indexation Factor. The effect of this appears to be that, if employer contributions are in excess of 12.5%, there is a cap on increases of the lesser of 5% and RPI (or some other appropriate index). The third relevant provision is the power of amendment found in Clause B.3. This is a power for the Trustee with the consent of Urenco by deed to "amend, modify, add to or replace all or any of the trusts, powers or provisions of [the Trust Deed]. Such deed may have retrospective effect". No such retrospective change may be made without the consent of the Member concerned, if "in the opinion of the Trustee, the amendment materially and prejudicially affects the overall value of the accrued benefits of any Member…in respect of Pensionable Service prior to the date of the amendment and to which the Member would be entitled (ignoring any discretionary augmentation) if the Scheme had been would up on the date of the amendment." All amendments must be made in accordance with section 67 of the Pensions Act 1995 (as amended). The fourth relevant provision is found in the definitions clause which provided for a normal retirement date on which a member attained the age of 65. The CPS The corresponding provisions of the CPS at the time of the transfer of Mr Mossop's employment were these: i) First, the contribution rate was, at the time of the transfer of Mr Mossop's employment, 5% (made up of a basic contribution of 3.5% and a family benefit contribution of 1.5%). ii) Secondly, increases to benefits are to be "in step with increases in the cost of living" to the extent corresponding to increases in official pensions pursuant to statute; in effect, the link was, at the time of the transfer of Mr Mossop's employment, to the RPI. iii) The power of amendment permits the Authority, with the approval of the Secretary of State, from time to time to amend any Rule, or to make or amend any additional Rule. The only fetter on this power is that no amendment or additional Rule should alter the main purposes of the scheme. The Energy Act 2004 ("EA 2004") EA 2004 makes provision for, among other matters, the decommissioning and cleaning-up of sites previously used for or contaminated by nuclear activities. It envisaged that responsibility for some of those tasks would be transferred, under the direction of the NDA, to public bodies (including companies owned by the UK government) or to private contractors (such as Urenco). This would involve the transfer of staff from one employer to another. In many, if not all cases, transferring staff would cease to be members of their existing pension schemes. Schedule 8 EA 2004 ("Schedule 8") makes provision in relation to pensions for such staff. Reference is made in Schedule 8 to the UKAEA: this is the Authority. Schedule 8 Schedule 8 is divided into five parts: i) Part 1 sets out definitions. ii) Part 2 enables the NDA to modify a pension scheme maintained by or on behalf of a nuclear company which is wholly owned by the Crown or a scheme designated by the Secretary of State in order to extend, to the extent specified, the groups of persons who can participate in the scheme. I am not concerned with the detail. iii) Part 3 makes provision for continuity of pension provision within a UKAEA scheme (such as the CPS) and for the making of transfer payments from such a scheme following a nuclear transfer scheme. Again, I am not concerned with the detail. iv) Part 4, which I come to in detail in a moment, is concerned with pension protection on the transfer to a private sector scheme such as the Scheme. v) Part 5 makes provision to enable a UKAEA pension scheme to apply to employees of designated BNFL companies while such companies are publicly controlled. Again, I am not concerned with the detail. Part 4 of Schedule 8 ("Part 4") The structure of Part 4 is as follows: i) Paragraph 9 identifies the criteria which determine the categories of employee who are entitled to "pension protection". ii) Paragraphs 10 and 11 set out what that protection is and how it is to be provided. Paragraph 10 deals with nuclear transfer schemes managed by the Secretary of State and paragraph 11 deals with other arrangements (that is to say transfer arrangements as defined) under the auspices of the NDA. The present case falls within paragraph 11. It is to be noted that in either case, the transfer might be to certain public sector employers (the UKAEA, the NDA or a publicly controlled company) or to a private sector employer. iii) Paragraph 12 deals with modifications of NDA Schemes but nothing turns on its provisions for present purposes. The purpose of paragraph 9 is to identify the persons who are entitled to pension protection, that is to say the protection afforded by paragraphs 10 and 11. A person is entitled to protection in relation to a nuclear transfer scheme or any transfer arrangements if sub-paragraph (2) applies to him and he is a person falling within sub-paragraph (5). His employment immediately after the transfer must be for "NDA purposes" (a phrase defined in paragraph 3 of Part 3). He must be a person to whom sub-paragraph (7) applies immediately before "the relevant time"; that time is defined in sub-paragraph (12) and for present purposes can be taken as the time when the transfer of employment takes place. I shall refer to it as "the transfer date". In the present case, this was 1 October 2008. It is common ground that the Transferred Employees satisfy the conditions of paragraph 9 and are entitled to "pension protection" Sub-paragraph (7) applies to a person if: i) he is a participant in a nuclear pension scheme; ii) he is eligible to become such a participant; or iii) he would be so eligible had he attained an age, or fulfilled a condition, specified in the pension scheme. The present case is concerned with paragraph 11 rather than paragraph 10. Paragraph 11 is in the following terms: "Protection on a transfer in accordance with transfer arrangements 11 (1) It shall be the duty of the NDA to secure that provision is made for ensuring that consultation with the persons specified in sub-paragraph (2) takes place before any transfer arrangements in relation to which persons are entitled to pension protection take effect. (2) Those persons are – (a) the NDA itself; (b) the Secretary of State; (c) the Treasury; (d) persons appearing to the NDA to represent persons who will be entitled to pension protection in relation to the arrangements. (3) Before such transfer arrangements take effect, the NDA must satisfy itself that every person entitled to pension protection in relation to the arrangements will be entitled, by virtue of the employment that he will hold after the relevant time— (a) to exercise an option of becoming a participant in an appropriate pension scheme; or (b) in the case of a person to whom paragraph 9(7)(c) will apply immediately before the relevant time, to exercise such an option on or before attaining the age or fulfilling the condition in question. (4) The NDA's duty under sub-paragraph (3) is owed to every person who is entitled to pension protection in relation to the transfer arrangements. (5) In the case of a person to whom paragraph 9(5)(d)(ii) applies, the references in sub-paragraph (3) to a person being entitled to exercise an option are to be construed as references to a person being entitled to exercise an option if his employer exercises the entitlement mentioned in paragraph 9(5)(d)(ii). (6) For the purposes of sub-paragraph (3), a pension scheme is an appropriate pension scheme in relation to a person if the NDA is satisfied that – (a) taking into account the other benefits (if any) that are conferred on or made available to him as a result of the employment that he will hold after the relevant time, and (b) taking the benefits that are available under the provisions of that pension scheme as a whole, the benefits that are available under those provisions are no less favourable than the benefits available under the provisions (taken as a whole) of the nuclear pension scheme in respect of which he is entitled to protection under this Part of this Schedule. (7) In sub-paragraph (6) the reference to the scheme in respect of which a person is entitled to protection under this Part of this Schedule is a reference to – (a) in the case of a person who has not previously been owed a duty under either sub-paragraph (3) or paragraph 10(2), the scheme by reference to which paragraph 9(7) will apply to him immediately before the relevant time; and (b) in other cases, the scheme by reference to which paragraph 9(7) applied to him immediately before the time that was the relevant time in relation to him on the first occasion on which he was owed such a duty; and the reference, in relation to such a person, to the provisions of that scheme is a reference to its provisions as in force immediately before the time specified in sub-paragraph (8). (8) That time is – (a) in a case falling within sub-paragraph (7)(a), the relevant time; or (b) in a case falling within sub-paragraph (7)(b), the relevant time in relation to the person on the first occasion on which he was owed a duty under either sub-paragraph (3) or paragraph 10(2). (9) Where a person – (a) is a participant in a non-nuclear pension scheme by virtue of the exercise of an option in a case in which the NDA discharged its duty to that person under sub-paragraph (3) by reference to that option, or (b) is or will become entitled to exercise an option to become a participant in such a pension scheme in a case in which the NDA discharged its duty to that person under sub-paragraph (3) by reference to that entitlement, this Part of this Schedule shall have effect in relation to that person as if that scheme were a nuclear pension scheme. (10) Sub-paragraph (9) does not apply in relation to a person to whom paragraph 9(5)(d)(ii) applied when the NDA discharged its duty to that person under sub-paragraph (3) unless the person's employer exercises the entitlement mentioned in paragraph 9(5)(d)(ii)." (11) In this paragraph "relevant time" has the same meaning as in paragraph 9." There are thus the following obligations on the NDA, owed to every person who is entitled to pension protection: i) to consult (sub-paragraphs (1) and (2)); and ii) to satisfy itself that persons entitled to pension protection are given the option of participating in an appropriate pension scheme either at once or on fulfilling certain age or other conditions as to membership. As to the protection afforded, the person entitled to pension protection is afforded that protection by being able to participate in "an appropriate pension scheme". A scheme is an appropriate pension scheme only if the NDA is satisfied that taking account of the benefits conferred on or available to the protected person as a result of his new employment and of the benefits available under the provisions of that scheme as a whole, the benefits that are available are no less favourable that the benefits taken as a whole of the scheme in respect of which he is entitled to protection. In other words, a comparison is to be made. I shall refer to this as "the no less favourable" test or assessment. Paragraph 11 applies not only on a first-generation transfer but also on second-generation (and subsequent) transfers. It is therefore necessary to identify the scheme and the point of time to be used in making the comparison and this is done by sub-paragraphs (7) and (8). On a first-generation transfer, the comparison is to be made between the receiving pension scheme and the relevant nuclear pension scheme as it stood immediately before the transfer: see sub-paragraphs (7)(a) and (8)(a). In the case of a second-generation (or subsequent) transfer, the comparison is to be made between the second receiving scheme and, as before, the relevant nuclear pension scheme as it stood immediately before the first-generation transfer: see sub-paragraphs (7)(b) and (8)(b)). In other words, any actual change to the relevant nuclear pension scheme after the first-generation transfer is ignored. In the present case, what this all means is that the NDA had to be satisfied that, taking account of the benefits conferred on Mr Mossop as a result of his employment with Urenco and taking the benefits that would be available to him under the provisions of the Scheme as a whole, his benefits were no less favourable than his benefits under the CPS as it stood on 1 October 2008. The SPA The SPA was made between the NDA, Sellafield Limited and Urenco (under its then name of Urenco (Capenhurst) Limited). The background to the SPA is helpfully set out in paragraphs 6 and 7 of Mr Short's skeleton argument, summarising the evidence in the witness statements of Mr Mossop and Steven Ball, head of HR for Urenco: "6. In summary, there has been a nuclear site producing enriched uranium at Capenhurst in Cheshire since the 1950s. In 1993 this was divided into two abutting Nuclear Licensed Sites, one continuing in the ownership of BNFL (which had been a public limited company, albeit wholly owned by the UK government, since 1984) with the other being transferred to the claimant….. Following the [Energy Act 2004] the BNFL site was transferred to the newly established [NDA] on 1 April 2005. However, although the NDA is the Responsible Organisation, Sellafield Limited (the name by which BNFL has been known since 2007) has continued to manage and operate the site and remains the Site Licence Company under section 3 of the Nuclear Installations Act 1965. The other site was transferred to the claimant in 1993, since when it has been the Site Licence Company. This site currently operates three plants producing enriched uranium for nuclear power stations. 7. Certain of the services used by both the sites at Capenhurst were provided by either NDA/Sellafield or by the claimant but used by the other under appropriate service agreements. One example was the high voltage electricity distribution system and related services. Although the claimant owned its own part of the distribution system, the whole of the system was operated and maintained by NDA/Sellafield Ltd. The employees who worked on this system (including Mr Mossop) were employees of Sellafield Ltd." In 2007, the NDA/Sellafield Ltd wanted to sell their part of the system and the related service organisation to Urenco as a going concern. This resulted in the SPA which was eventually entered into on 29 February 2008 although the actual transfer did not take place until 1 October 2008. Mr Mossop's employment with BNFL and his membership of the United Kingdom Atomic Energy Authority Industrial Superannuation Scheme commenced on 6 September 1982. He became of a member of the CPS when it was formed in 1997 by the merger of a number of schemes. As a result of the transfer made in 2008 and the effect of the Transfer of Undertakings (Protection of Employment) Regulations 2006, the employment of Mr Mossop and the other Transferred Employees transferred from Sellafield Ltd to Urenco with effect from 1 October 2008. They were entitled to a level of pension protection under the provisions of Part 4. Clause 6 of the SPA is headed "PENSIONS AND EMPLOYEES". Under Clause 6.1, Urenco is to procure that the Scheme (then called the Urenco (Capenhurst) Limited Pension Scheme) was a registered contracted out scheme capable of receiving a transfer payment from the CPS. Urenco is to procure that each of the Relevant Employees (the same class as I have called the Transferred Employees) will be offered membership of the Scheme and will be offered the opportunity to transfer his accrued benefits from the CPS to the Scheme. Clause 6.3 provides as follows: "[Urenco] shall procure that the Relevant Employees are offered benefits for past and future service in line with the GAD Certificate of Broad Comparability and associated undertakings…….." I shall refer to that certificate as "the Certificate"; it is the certificate issued to the NDA and Sellafield Ltd dated 2 August 2007. The associated undertakings ("the Undertakings") are those referred to in the Certificate itself. Under Clause 6.5, Sellafield Ltd is to pay to Urenco the sum of £56,000 in full and final settlement of all of NDA's and its own obligations as provided for in Schedule 9 in respect of the Relevant Employees; this was called "the Pension Equivalence Payment". And Clause 6.6 provides that certain additional payments are to be made, which I deal with in paragraphs 31 and 32 below. Clause 17.7 is concerned with third party rights. Generally, the Contracts (Rights of Third Parties) Act 1999 is excluded. But this exclusion does not extend to the rights of Employees (which includes the Transferred Employees) to enforce the provisions of Clause 6. The Certificate and the Undertakings The first page of the Certificate sets out the background leading to its issue. On the second page, it is stated that "BNFL has asked the Government Actuary's Department ("GAD") for its impartial assessment of whether Urenco (Capenhurst) Limited's proposals satisfy the broad comparability requirements". The evidence before me does not reveal how the proposals placed before the GAD came to be formulated in the way which they were; nor is there any relevant evidence as to the matrix of fact against which the SPA and the Certificate are to be construed other than the obvious fact that the proposals were designed to satisfy the NDA that the Scheme was indeed an appropriate pension scheme. It is clear that the Scheme taken by itself and as it stood prior to the transfer was not an appropriate pension scheme because, for instance, it provided for a member contribution rate of 7.5% rather than the 5% rate under the CPS and the less generous rate of increase of pensions in payment without providing other, more generous, benefits on which reliance could be placed to produce a favourable comparison. Accordingly, steps were taken to ensure that the benefits to be conferred on the Transferred Employees as a result of their employment by Urenco, taken with their benefits under the Scheme as a whole, were no less favourable. Those steps appear to have resulted in three things. First, the Scheme itself was to apply to the Transferred Members in a slightly modified form; secondly, Urenco was to give certain undertakings; and thirdly compensation was to be provided to ensure that the take-home pay of the Transferred Members was not reduced as a result of their paying the higher contribution rate of 7.5% rather than 5%. The third of those matters is reflected in Clause 6.6 of the SPA. It provides that, until a member attains age 65 or leaves service, whichever is earlier (his "Employment Term"), Urenco is to make a guaranteed monthly payment from the Pension Equivalence Payment to each of the Relevant Employees "in accordance with the payment profiles set out in Schedule 9" (their "Employee Pension Equivalence Payments"). Urenco is at liberty to amend or to cease making these payments solely upon the condition that it has provided the Transferred Employees with a guaranteed increase in basic pensionable income and the effect of such increase is equivalent to or greater than their respective Employee Pension Equivalence Payments for their Employment Term. There seems to be a drafting error here. Schedule 9 in fact contains the Certificate and there is nowhere to be found in the SPA (or anywhere else) the payment profiles referred to. I am told that the reference to payment profiles originated in an earlier draft and remained in the final version in error. It is common ground that Clause 6.6 is intended to reflect the understanding that the Transferred Employees should be compensated in respect of the higher contribution rate under the Scheme (7.5%) as compared with the contribution rate under the CPS (5%). The matter of compensation is dealt with in both the Certificate (see paragraph 11 Annex A) and in the Undertakings (see paragraph 9 Annex B); there can be do doubt that the Transferred Employees are entitled to some compensation. The first and second of those matters are reflected in the Certificate and the Undertakings. The third page of the Certificate refers to the "main terms of the proposal made" by Urenco which were set out in a document attached as Annex A. Mr Johnston, the actuary within the GAD giving the Certificate, stated that he had compared the value of the proposals with the value of the benefits in the CPS; that he had considered the design of the two sets of arrangements including the benefits which are available, when they are payable and to whom; and the level of employee contributions as well as other matters concerning service, gender, marital status and salary levels. In this part of his certification, he said nothing expressly about any power to amend either the CPS or the Scheme or about whether, and if so how, such powers were to be factored into the comparability assessment. He nonetheless expressed his view that the requirements of Schedule 8 were met in the third paragraph on the third page of the Certificate in the following terms: "I confirm that the proffered arrangement offer a package of benefits, which are broadly comparable to those provided by the package of benefits provided prior to the transfer, and as such the requirements of Energy Act 2004 are met for staff who are covered by Schedule 8 of that Act." This phraseology suggests that he was comparing the benefits available under the CPS and the Scheme ignoring their respective powers of amendment. The third and fourth pages of the Certificate contain twelve notes to which Mr Johnston stated his opinion was subject. I mention the following: i) Note 5 explains that the Certificate is only concerned with benefits to be provided in respect of service with an employer participating in the Scheme. Past service benefits in the CPS were to be dealt with by other arrangements. ii) Note 8 states that, in giving his opinion, he had assumed that "any commitments made by Urenco will be fulfilled….". iii) Note 9 draws attention to the fact that his opinion covers the terms of the CPS which applied as at the date of the Certificate (11 September 2008) noting that changes to the CPS which are made after the employees had transferred fall outside the broadly comparable commitment. iv) Note 10 observes that the broad comparability assessment and the Certificate do not prevent transferring employees from negotiating new pension arrangements with their employer after the transfer. v) Note 11 states that Urenco or any associated or subsidiary company "has agreed that the [Scheme] will provide the benefits described in this Certificate". Mr Johnston also stated that the GAD had examined the current scheme documentation of the Scheme and that "our understanding is that his documentation is consistent with the provisions set out in the Annex to the Certificate". I will come to that Annex in a moment. He included a disclaimer about the adequacy of the documentation and recorded that the GAD had not obtained legal advice to confirm their understanding. vi) Finally, in Note 12, he stated that Sellafield Ltd should confirm the validity of the Certificate in the light of potential amendments to the CPS which were apparently on the cards. The fifth page of the Certificate contains a health warning about security of benefits, pointing out that the CPS was backed by central or local government. The Scheme was unable to provide the same degree of security. Mr Johnston recorded that no assessment had been made of the Scheme's current funding position. Annex A then followed on from the pages I have referred to. It is headed "Main Terms of the [Scheme] as Applicable to Members of the [CPS] transferring from BNFL Capenhurst EDT to Urenco UK". These terms are, in a number of respects, different in substance from those of the Trust Deed. I note the following paragraphs: i) Paragraphs 4, 12 and 13 which, taken together, deal with retirement age. The combined effect is that the Transferred Employees are to have a normal retirement age of 60 being able to retire at that age without the need for consent from either Urenco or the Trustee and without any reduction in benefits. Retirement is also to be permitted after age 50 with the Trustee's consent (but with no requirement for Urenco's consent). Benefits are to be reduced for early payment. These provisions contrast with the provisions of the Scheme documentation where the normal retirement age is 65 and there are no general provisions (in contrast with special conditions relating to eg redundancy) for retirement at age 60 without consent or retirement after age 50 with Trustee consent. The basic level of benefit at age 60 is 1/80th of Final Pensionable Pay for each year of Pensionable Service plus a lump sum. ii) Paragraph 6: This refers to Pensionable Pay which is stated to include all those elements of remuneration pensionable under the CPS. iii) Paragraph 11: Members' Contributions are stated to be at 7.5% of Pensionable Pay. Members will receive a non-pensionable allowance to ensure that their take-home pay is no lower after joining the Scheme than when they were active members of the CPS (to which members, it is recorded, contribute 5%). iv) Paragraph 14: This deals with pension increase. Statutory increases are to be paid on the GMP. The excess pension over the GMP will be increased with the RPI. v) Paragraph 25: This states that no amendments may be made to benefits which would reduce the value of accrued benefits on a past service reserve basis unless such amendments are required by legislation or are made with the written consent of all the Members affected. The Undertakings The Undertakings were given by Urenco to Mr Selby (of the GAD) by a letter dated 18 April 2007. They can be found at Annex B to the Certificate. A "Protected Member" is any person who is entitled to pension protection as defined in Schedule 8, a class which included Mr Mossop. Urenco gave the Undertakings "so long as it is the principal employer of [the Scheme]". I note the following provision: i) Paragraph 6: Normal retirement age is to be 60. ii) Paragraph 9: "Protected Members will receive a non-pensionable allowance to ensure that their take home pay is no lower after the [Scheme] than when they were active members of the CPS." iii) Paragraph 11: "The excess pension over the GMP for protected members will be increased in payment in line with…[RPI]. The increase will not be reduced if the employer contribution rate exceeds the Contribution Limited, as defined in Rule K.1.2 of the [Scheme] Rules." iv) Paragraph 12: "In deferment the total pension is increased in line with RPI. The increase will not be reduced if the employer contribution rate exceeds the Contribution Limit, as defined in Rule K.1.2 of the [Scheme] Rules." Amendment of the Scheme: the Proposed Changes An actuarial valuation of the Scheme carried out during 2009 and 2010 disclosed a substantial deficit in the Scheme. As at 20 October 2009, this deficit, on the Scheme's funding assumptions, was £26 million, a funding level of 87% of the Scheme's technical provisions (the relevant jargon for what are essentially the liabilities). Two changes were proposed to address this deficit: i) an increase in Members' contributions from 7.5% to 9.5%; and ii) a decrease in the maximum rate of increase to be applied to pensions in payment to the lower of RPI and 2.5% pa rather than the lower of RPI and 5% pa. These changes are intended to apply to all Members, including the Transferred Employees. So far as they relate to the Transferred Members, I will refer to them as "the Proposed Changes". The Proposed Changes would make the Scheme less favourable to the Transferred Members than the benefits provided for them under the CPS immediately before the transfer and ignoring any amendments which might be made to the CPS thereafter. The question which arises is whether the power of amendment in the Scheme (which is the only relevant power) can be used to make them. The answer to that question turns on the scope of the statutory protection under Schedule 8 and the combined effects of the SPA, the Certificate and the Undertakings. It is not, I consider, possible to reach a conclusion about the effects of the SPA, the Certificate and the Undertakings without an understanding of the scope of Schedule 8 which is the issue I address first. The scope of Schedule 8 The particular matter of concern for present purposes is how it is to be judged whether a scheme is an appropriate pension scheme for the purposes of paragraph 11 of Part 4 in the light of the powers of amendment which subsist in the relevant nuclear pension scheme and in the appropriate pension scheme. I shall refer to the former as "the nuclear scheme" and the latter as "the receiving scheme". It is for the NDA to be satisfied that the receiving scheme is an appropriate pension scheme; the NDA is obviously able to take advice (as it did from the GAD in the present case) in making its assessment. But it is NDA which must be satisfied; the decision is not one for the GAD (or any other expert) to make. It is a conceptually straightforward exercise, albeit a technically complex exercise requiring actuarial expertise, to carry out the "no less favourable" comparison required by paragraph 11(6) in relation to factors which can be objectively assessed and do not depend on the natures of the two schemes. Thus it is possible to compare, on the one hand, the benefits of the nuclear scheme as they stand on a particular date, ignoring the state of funding of the scheme and the existence of any power of amendment, and, on the other hand, the benefits of the receiving scheme as they stand on that date, again ignoring the funding of that scheme and the existence of any power of amendment, taken together with the benefits referred to in paragraph 11(6)(a). The exercise will, of course, require a number of assumptions to be made of the sort which actuaries are accustomed to make in valuing the assets and assessing the technical provisions of a scheme, but this does not give rise to any sort of conceptual uncertainty. It will be further complicated if the exercise of discretionary powers, such a power to augment benefits, is to be factored into the comparison. The position becomes conceptually far less certain if the comparison has to take account of factors which impact differently in relation to the different schemes. One factor is funding. The nuclear pension schemes to which the protection afforded by Schedule 8 is relevant are backed by central or local government; realistically, there is no chance of benefits not being met. In contrast, a private sector scheme may not be able to give the same level of security of benefits. Mr Johnston made this point when subjecting the Certificate to the caveat mentioned in paragraph 36 above. It is not, I have to point out, clear that funding is in fact a factor which has to be taken into account by the NDA in deciding whether a scheme is an appropriate pension scheme; but if it is a relevant factor, then it would be necessary for some sort of investigation to be made of the strength of the employer's covenant. I raise funding only because it provides an easy-to-grasp illustration of the difficulty of making a comparison when taking account of factors which impact differently on different schemes. Another factor is the power of amendment. If the powers of amendment in the nuclear pension scheme and the receiving scheme are to be taken into account at all, it is not at all clear how that is to be done. In the present case, for instance, the CPS contains a very wide power of amendment, but it is one exercisable in the context of a public sector scheme with a public sector employer and one which can only be exercised with the consent of the Secretary of State. The prospect of detrimental amendments might have been thought, in 2008, to have been remote. Although there is currently great pressure to reduce the cost of public sector pension schemes, the perception in 2008 was, I think, very different. In contrast, the power of amendment under the Scheme is vested in the Trustee. It might be said that the Transferred Employees could therefore have derived some comfort in 2008 from that fact since the Trustee would be subject to fiduciary obligations in exercising that power so that, again, the prospect of detrimental amendments might have been thought to be remote. That is true to some extent. But it must be remembered that the Trustee has a wider concern than the interests of the Transferred Employees alone. The Trustee must act taking account of the interests of all the beneficiaries and indeed of Urenco itself. In the current circumstances of the Scheme, that means that the Trustee must bear in mind not only the significant deficit in the Scheme's funding but also Urenco's legitimate concerns in constraining pension costs. Indeed, changes (the same as the Proposed Changes) have already been made to the contributions of Members other than the Transferred Employees and to the pension increases to which they will become entitled and it is not suggested by anyone that the Trustee was not acting properly in making those changes. Thus, assuming that the powers of amendment are to be taken account of at all, it cannot be said, a priori, that otherwise broadly equivalent benefits for Transferred Employees in the CPS and the Scheme satisfy the "no less favourable" test. There would have to be some assessment made about the comparative likelihood of detrimental amendments being made to (i) the CPS under its power of amendment and (ii) the Scheme under its power of amendment. Mr Short submits the comparison required by Part 4 does not require the NDA to take account of the powers of amendment in the CPS when carrying out the "no less favourable" assessment. The comparison is to be made with the terms of the CPS as they stood at the transfer date so that not only are actual amendments to the CPS after that date to be ignored, but the potential for amendment is also to be ignored. Taken together with benefits under paragraph 11(6)(a), an "appropriate pension scheme" must provide benefits which are no less favourable than those in fact provided by the CPS on the transfer date. In order to ascertain what is in fact provided by the CPS on the transfer date, the focus is on the Rules of the CPS as they stood on that date. The benefits might be changed by the exercise of the power of amendment contained in the CPS, but those benefits are not to be seen, for the purposes of the comparison, as including within them the potential for change. Benefits which are subject to reduction by a power of amendment are not capable of being "no less favourable". Thus to take the simple case where a scheme provides precisely the same level of benefits (including increases in deferment and payment) and has precisely the same contribution rate as the CPS, the scheme could be an appropriate pension scheme if it contained no power of amendment which might result in a reduction of benefits or an increase in contributions, but would not (ignoring benefits within paragraph 11(6)(a)) be an appropriate pension scheme if did contain such a power. Mr Short says that the statutory provisions are, on their face, to be construed in the way which he suggests. But if that is wrong, he submits that the there is just the sort of ambiguity or absurdity which justifies resort to Parliamentary materials in accordance with Pepper v Hart [1993] AC 593 and, if such resort is had, it leads inevitably to the conclusion for which he argues. Mr Hitchcock submits that this "snapshot" approach is wrong. The powers of amendment in the CPS cannot simply be ignored in ascertaining what are the benefits available under the provisions of each scheme "taken as a whole". There is no objection in principle to including in an "appropriate pension scheme" a power of amendment such as is found in the Scheme and which is applicable to the benefits of the Transferring Employees. He submits that the criteria by which reference can be made to Hansard are not present and, even if they were, there are no clear statements to be found leading to the result for which Mr Short contends. What support do the rival contentions find in the actual words of paragraph 11? I start with paragraph 11(6), and do so in the context of what has been called a first-generation transfer, that is to say, a transfer (such as the present case) which takes place in the context of the first transfer arrangements in relation to which persons are entitled to pension protection. Typically this will involve a transfer of employees (being members of a nuclear pension scheme) from a public sector employer to a private sector employer and will also involve their becoming members of an appropriate pension scheme. I will come to second-generation (and subsequent) transfers later. One thing at least is clear, which is that there is no ongoing requirement for the NDA to be satisfied that a scheme is an appropriate pension scheme: there is a single point of time – "the relevant time" – as at which the "no less favourable" test is to be satisfied. That time in the context of a first-generation transfer is the time at which the transfer of employment of the person concerned takes place under the transfer arrangements concerned. I shall refer to that time as "the transfer date". In the present case, the transfer date was 1 October 2008 when the Transferred Employees transferred their employment to Urenco. Turning then to the comparison which has to be carried out as at the relevant time, the "no less favourable" test is to be applied by identifying two sets of benefits: i) The first set of benefits are those "that are available under those provisions", the reference being to the benefits referred to in paragraphs 11(6)(a) and (b). Paragraph (b) refers to "the benefits that are available under the provisions of [the receiving scheme] as a whole". ii) The second set of benefits are "the benefits available under the provisions (taken as a whole) of [the nuclear scheme identified]". Although paragraph 11(6) is drafted in the present tense, referring to "benefits that are available" and to "the benefits available", it is obviously directed at the benefits to which a person will become entitled in respect of service after the relevant date. The right to a pension on retirement based on length of service and final pensionable salary is within each of those quoted phrases notwithstanding that it has not yet been earned. The relevant nuclear pension scheme is the scheme "in respect of which [the person] is entitled to protection under [Part 4]". Questions could arise about the date to be adopted when identifying the provisions of that scheme for the purposes of making the "no less favourable" assessment. This would be so, for instance, where a person falls within paragraph 9(7)(c), when it would not be clear, absent express provision, whether the relevant provisions were those in force at the date of the main transfer, or those in force when the qualifying condition was satisfied, and it would be so in the case of a second-generation (or subsequent) transfer where, absent express provision, it might be said in making the "no less favourable" assessment, that the comparison should be made with the terms of the nuclear scheme as they stood at the date of the second (or subsequent) transfer. This is dealt with by the closing words of paragraph 11(7) which provide that the reference in paragraph 11(6) to the provisions of that scheme is a reference to "its provisions as in force immediately before the time specified in sub-paragraph (8)". The question then arises whether the power of amendment contained in the nuclear scheme is one of the provisions referred to in the closing words of paragraph 11(7) and thus one of the provisions referred to in the final part of paragraph 11(6). If it is such a provision, then it is clear that the power of amendment contained in the receiving scheme is also one of the provisions of that scheme referred to in paragraph 11(6)(b). The "no less favourable" test therefore has to be conducted taking into account the powers of amendment in each scheme. In contrast, if the power of amendment in the nuclear scheme is not such a provision, the comparison must be between the benefits available under the "provisions" of the receiving scheme on the one hand, and those available under the provisions of the nuclear scheme ignoring its power of amendment on the other hand. That leads to the question whether the "provisions" of the receiving scheme nonetheless include its own power of amendment. If they do, then it is not easy to see how the "no less favourable" test could be fulfilled. But if they do not, then the protection apparently afforded by the legislation is, according to Mr Short, illusory since the benefits under the receiving scheme would be susceptible of downward amendment for future service. In approaching the answers to those issues, I must bear firmly in mind that the word "provisions" where it appears in different places in paragraph 11(6) does not appear in isolation but as part of the phrases "benefits that are available under [the/those provisions]…."; and I must bear in mind also that the word does not necessarily mean the same in paragraph 11(6)(b) as in the closing part of paragraph 11(7). When the focus is placed on those phrases, it can be seen that a conceptual issue arises, an issue which I can best illustrate by an example. Consider, then, a scheme which provides a number of benefits, including a pension at normal retirement date of 1/60th of final pensionable salary for each year of service but where the scheme is subject to a power of amendment. Suppose that an amendment is proposed to reduce future accruals to 1/80th. Then consider this question: What benefits are available under the scheme, immediately before the amendment, in respect of future service? At least two answers can be given: i) The first is that the benefits available include a pension based on 1/60th of final pensionable salary for each year of future service since that is what the scheme currently provides. But, because the scheme can be amended, that pension may cease to be available in respect of service after an amendment is made. On this approach, the power of amendments sits, as it were, outside the benefit: the benefit is not defined by reference to the fact that it might be changed for the future by exercise of the power of amendment. Accordingly, the benefit under the provisions of the scheme for the purposes of paragraphs 11(6) and (7) is based on a 1/60th accrual not on 1/60th or such other rate as may be determined by amendment. ii) The second answer is that the benefits available under the provisions of the scheme do not include a pension based on 1/60th of final pensionable salary; rather, what is available under the provisions of the scheme is a pension based on 1/60th of final pensionable salary or such other amount as may result from an exercise of the power of amendment. On this approach, it is inherent in, or part and parcel of, the benefit itself that it is subject to amendment. That question, and its two (at least) possible answers illustrates the conceptual problem which the interpretation of paragraphs 11(6) and (7) raise. But that question may not be the right one to ask in relation to paragraph 11(7). Rather the question is this: What benefits are available under the provisions of the scheme as in force immediately before the amendment, in respect of future service? This is a subtly different question from that raised in the preceding paragraph since it raises the point, already identified, that those provisions do not include the power of amendment itself. Indeed, it might be said that the words "as in force at" a given time necessarily entail that the focus is on the provisions of the scheme excluding the power of amendment. The power to amend is precisely that: what it permits will depend on the precise wording of the power in question but what can be said in general terms is that it can bring about a change in the provisions which currently apply. Thus the power of amendment itself stands apart from the provisions on force at a given time. In the light of that analysis, it is strongly arguable that any power of amendment in the nuclear scheme is to be ignored when it comes to identifying the benefits available under its provisions in force at a particular date. This result may be arrived at in one of two ways. i) First, the power of amendment is not a relevant "provision" at all. ii) Secondly, even if it is one of the "provisions" of the scheme in force at the relevant time, it cannot be taken into account because a hypothetical future amendment would result in provisions which were not in force at the relevant time. Those new provisions would not be admissible in carrying out the "no less favourable" assessment; a distinction is to be drawn between a provision already in the scheme and a provision which may be introduced pursuant to a power of amendment even if that power is itself a provision of the scheme. To put the point another way by reference to the example: suppose that an amendment were made to reduce future accrual to 1/80th of final pensionable salary for each year of future service. If one puts oneself back in time to the transfer date and to the date of the amendment to ask what benefits are available under the provisions of the scheme in force at those two dates, the answers would be different. The benefits available have been reduced from 1/60th to 1/80th, albeit that in each case the benefit is subject to further exercise of the power of amendment: it cannot be said that they are the same benefit and therefore it cannot be said that reduced benefit was one which was available under the provisions in force at the transfer date. These arguments turn, however, on giving a narrow meaning to the words "provisions as in force immediately before" the specified time in paragraph 11(7). Insofar as the first route to the result is relied on (ie the proposition that the power of amendment in the nuclear scheme is not one of the "provisions" in force at the relevant date), there is considerable force in the argument that the same should apply in relation to the receiving scheme as well. This would lead to the adoption of the same approach to the benefits under "the provisions of that scheme as a whole" in paragraph 11(6)(b) and to the benefits under "the provisions (taken as a whole) of" the relevant nuclear pension scheme in the final part of paragraph 11(6). To adopt a different approach in relation to each scheme would not be to compare like with like. If that is correct, then the power of amendment in each scheme is ignored and the comparison is made between the provisions of each scheme as they stand. The second route does not face that particular difficulty. It acknowledges that the power of amendment in the nuclear scheme is, indeed, one of the provisions of the scheme in force on the transfer date, but draws the distinction between what is already provided and what can only be provided by way of amendment. It does, however, require one to conclude that the overall package of benefits provided under the receiving scheme cannot be reduced pursuant to a power of amendment because, if they were to be reduced, the benefits available cease to be "no less favourable" than the benefits available under the provisions of the nuclear scheme as at the transfer date. And this is so notwithstanding that, at that date, the nuclear pension scheme could itself be amended to reduce the benefit. But another conclusion is possible. It can be argued that the reference in the closing words of paragraph 11(7) to the provisions in force immediately before the specified time was included only to identify the time at which one is to look at the extant provisions of the scheme and not to set those provisions in stone for all the purposes of paragraph 11. On this reading, what is being said is no more than that the receiving scheme must provide benefits no less favourable than those available under the nuclear pension scheme as in force at the transfer date and not those in force at some earlier date (for instance, when a transfer agreement is entered into) or at some later date following an amendment. On this argument, the "provisions in force" in paragraph 11(7) include the power of amendment; and the benefits under those provisions for the purposes of the closing words of paragraph 11(6) include benefits which can be brought into existence pursuant to any provision in force at the transfer date including the power of amendment itself. That is a possible construction of paragraphs 11(6) and (7). It is then for the NDA, in assessing whether the "no less favourable" test is satisfied, to judge, as best it can, the likelihood of the exercise of each power taking account, in the case of the receiving scheme, of who is able to exercise the power of amendment, recognising the fiduciary nature of the power if it is vested in the trustee and, taking into account the constraints on the employer, for instance its duties under Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589 ("Imperial"), if the power is exercisable by or on behalf of the employer. To put that in the context of an example, consider otherwise identical schemes but with different accrual rates, based on 1/60ths and 1/80ths of pensionable salary respectively. The latter cannot, I consider, possibly be said to provide benefits which are no less favourable than those provided by the former even though both schemes are subject to an identical power of amendment which might be used to bring about some other rate of accrual. In order for the latter to provide benefits which are no less favourable, it too must provide for an accrual rate based on at least 1/60ths. In the context of paragraph 11(6), for the "no less favourable" test to be satisfied, the benefits of the receiving scheme ignoring its power of amendment must be compared with the benefits of the nuclear scheme ignoring its power of amendment; it is in that context that the advice of the GAD can be of particular assistance. The effect of the powers of amendment in each scheme can, on this approach, then be taken into account by the NDA in deciding whether it is satisfied that the test is passed. What other indicators are there to suggest than one interpretation is to be preferred? In terms of a purely textual analysis, Mr Short relies on how paragraph 11 applies in relation to second-generation (and subsequent) transfers. Let me give an example of a second-generation transfer: i) A first-generation transfer (either pursuant to a nuclear transfer scheme or transfer arrangements) has taken place with the result that relevant employees have been transferred from one employer to another with a connected termination of membership of one pension scheme and participation in another scheme. This is what happened in the present case where the employer of the Transferred Employees changed to Urenco and the Transferred Employees ceased to participate in the CPS and began to participate in the Scheme. ii) There then follows a nuclear transfer scheme or transfer arrangements under which some or all of those employees transfer to a third employer and participate in a third scheme. For instance, Urenco might transfer part of its business to another company with one or more of the Transferred Employees becoming employed by that company for NDA purposes with an associated change of pension provision to a third scheme. The third scheme, like the second scheme, must be an appropriate pension scheme so that the "no less favourable" test must be satisfied. Paragraph 11(7)(b) in effect provides that the scheme by reference to which those employees are entitled to protection is not the second scheme, but the original scheme in which they participated immediately before the first transfer. Further, the reference in paragraph 11(6) to the provisions of that scheme remain the provisions as in force immediately before the first transfer; the comparison is not made by reference to the provisions (if different) at the time of the second transfer. Thus, when it comes to a second-generation transfer, paragraph 11 is not concerned at all with what has happened to the original scheme since the first transfer; nor is it concerned, in relation to the second transfer with the provisions of the first appropriate pension scheme, the provisions of which do not feature in paragraphs 11(6) or (7). All of that makes perfectly good sense on Mr Short's approach to the construction of paragraph 11. But on Mr Hitchcock's approach there is what at best from his point of view is a curiosity and at worst an anomaly. Suppose that the receiving scheme on the first transfer (I will call it the first receiving scheme) is validly amended some time after the first transfer to reduce the accrual rate of the main pension benefit. Suppose that after a further period of time, say 2 years, a second-generation transfer takes place, with another pension scheme (I will call it the second receiving scheme) being the intended appropriate pension scheme. In order to satisfy the "no less favourable" test, the necessary comparison will have to be made of the benefits available under the provisions of the second receiving scheme with the benefits available under the provisions of the nuclear scheme at the time of the first transfer. In other words, the second receiving scheme will have to provide a higher accrual rate for future service than the first receiving scheme provides at the time of the second-generation transfer. The result is that the employees initially accrue benefits in the first receiving scheme which are no less favourable than those of the nuclear scheme; then, following the amendment, they accrue benefits at a reduced rate for the period from the amendment to the date of transfer to the second receiving scheme; and thereafter, at least for a period of time until amendment of the second receiving scheme, they will again accrue benefits no less favourable than those under the nuclear scheme as in force at the time of the first transfer. It is a curious, and perhaps even anomalous, result. Mr Short suggests that there is a similar curiosity, or anomaly depending on one's viewpoint, which arises in this way. A person does not have to be an actual participator in a nuclear pension scheme to be entitled to pension protection. It is enough (see paragraph 9(7)) for him to be eligible to become a participant had he attained an age, or fulfilled a condition, specified in the relevant nuclear pension scheme. In this context, a person whose participation in the scheme is temporarily suspended (eg while he is on secondment) is treated as being eligible to become a participator subject to fulfilment of the conditions which would bring the suspension to an end. This could be some considerable time after a relevant transfer. In the case of such a person, he must, under paragraph 11(3) be given, like actual participants, an option to become a participator and must be able to exercise that option on or before attaining the age or fulfilling the condition in question. Consider, then a case where the receiving scheme is adversely amended, after the transfer but before the relevant employee has satisfied the condition and exercised his option. He subsequently fulfils the condition and exercises his option. He will not become entitled to the benefits in place at the transfer date because they have been reduced as a result of the amendment. Mr Short submits that the "no less favourable" test is not fulfilled in relation to that employee since the benefit of that employee under the provisions of the receiving scheme are not as favourable as the benefits of the nuclear scheme as in force at the transfer date. Mr Hitchcock says that that is not right. The time for assessing whether the receiving scheme is an appropriate pension scheme is before the relevant transfer (be it a first-generation transfer or a second-generation (or subsequent) transfer takes effect. It follows that the "no less favourable" test is to be judged before the transfer. If, under the rules of the receiving scheme as they stand at that time, the employee will become entitled to benefits which are no less favourable, then the scheme will, on Mr Hitchcock's construction, be an appropriate pension scheme notwithstanding that the employee may never, in fact, accrue benefits on that basis because the scheme has been amended before his participation commences. It is no more surprising that this should be the result than that the future service benefits of an actual participant should be reduced by an amendment. Mr Hitchcock also asks rhetorically why, if Mr Short is right, it would ever be necessary on a second-generation transfer to go back to the nuclear scheme given that the relevant member would have protection by reference to the provisions of the first receiving scheme. The answer to that is that the first receiving scheme may have been amended to provide increased benefits. The member is not entitled to protection in respect of the increases. Mr Short also argues that, if Mr Hitchcock's construction is correct, the protection which it is the purpose of Part 4 to provide is rendered worthless. Instead of providing a guaranteed level of benefit in respect of the period of participation in the scheme of a protected person, an employer will simply be able to amend the scheme, for instance by reducing future accruals or increasing contributions or to reducing increases to benefits in deferment or payment. I consider that this argument is to state the case much too highly. There are two protections which are afforded even on Mr Hitchcock's construction. The first is that, on any view, the appropriate pension scheme must provide benefits which, on the transfer date, satisfy the "no less favourable" test. In other words, ignoring the powers of amendment in each scheme, the benefits must be no less favourable on the transfer date. Secondly, benefits could subsequently be adversely affected only if the power of amendment is properly exercised. If Mr Hitchcock is correct as a matter of construction, then the NDA, in judging the "no less favourable" test will have had to consider the possible impact of any power of amendment. It would be an unusual case if the power were wholly unconstrained. There may actually be relevant express fetters on the power, to be taken account of on a case-by-case basis and, even if there are no general fetters, the NDA could insist on their being imposed in order to express itself satisfied that the "no less favourable" test is fulfilled. In many cases – the present case is one – the power to amend will be vested in trustees in which case the exercise of the power will be constrained by the usual fiduciary constraints. And in all cases where the power is vested in the employer, or where its consent to its exercise is vested in the employer, the implied duties explained in Imperial will arise. Those are factors which the NDA would take into account, as I have already said in paragraph 63 above. Mr Hitchcock suggests that where Parliament has wanted to entrench a particular scheme of benefits in respect of future service, it is able to do so expressly. He points to the relevant statutory instrument applicable to the Electricity Supply Pension Scheme, the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990 (SI 1990/346) as an example. I accept, of course, the proposition and acknowledge those regulations as an example. But I do not gain any assistance from the proposition or the example in support of the implicit suggestion that, because express provision was not made, therefore the provisions of a nuclear pension scheme are never to be entrenched when transfer arrangements are made. There is one consequence of Mr Short's construction which I should mention and that is its impact within a purely public sector nuclear transfer scheme or transfer arrangements. Nuclear transfer schemes and transfer arrangements are not restricted to transfers to the private sector. As can be seen from paragraphs 9(2)(a) and (3), such a transfer might be to the UKAEA, the NDA or a publicly owned company. This may result in an employee ceasing to be an active member of one public sector scheme and becoming a member of another public sector scheme. It might be thought to be surprising that the second public sector scheme could not be an appropriate pension scheme because it happened to contain a power of amendment. I have found the arguments to be finely balanced. However, in my judgment, Mr Short's interpretation is to be preferred so that the "no less favourable" test is to be judged by the NDA ignoring the power of amendment contained in the relevant nuclear pension scheme but taking into account the power of amendment which is available under the receiving scheme. My reasons for reaching this conclusion are as follows. Mr Short's interpretation of paragraph 11(7) taken in isolation has a great deal to commend it (see in particular the argument at paragraphs 60 to 62 above). It is, nonetheless, to be noted from its opening words that the purpose of that paragraph is to explain the meaning of certain terms in paragraph 11(6). Reading the provisions of paragraph 11(7) into paragraph 11(6), the comparison to be made in the present cases is as follows: i) on the one hand, there are the benefits available to a Transferring Employee (i) taking into account the benefits available to him as a result of his employment by Urenco and (ii) "taking the benefits that are available under the provisions of [the Scheme] as a whole"; and ii) on the other hand, there are the benefits available "under the provisions (taken as a whole) of the CPS as in force immediately before [the transfer]". When provisions of paragraph 11(6) are expanded in that way, the argument at paragraphs 60 to 62 above is less strong than when viewing paragraph 11(7) in isolation but it remains an argument of considerable force and one which I consider to be correct. The contrast is between the provisions of the receiving scheme and the provisions of the nuclear scheme as in force at the relevant time. The more natural reading of this distinction is, in my view, to treat the first as referring to the provisions as they stand from time to time and second to the provisions as they stand at the relevant time. Further, this interpretation avoids the curiosity or anomaly which arises in relation to second-generation (and subsequent) transfers which arises on Mr Hitchcock's interpretation. Moreover, it avoids a potential anomaly in relation to paragraph 9(3)(b). Under Mr Short's interpretation, the benefits under the provisions of the receiving scheme as a whole, cannot be reduced below the benefits under the provisions of the nuclear pension scheme at the transfer date but ignoring its power of amendment. Accordingly, the receiving scheme will be an appropriate pension scheme at the time when the person in question exercises his option, if one applies the "no less favourable" test at that time by reference to (i) the provision of the receiving scheme at that time and (ii) the provisions of the nuclear scheme at the transfer date that is to say the date of the original transfer. In contrast, on Mr Hitchcock's interpretation, the person in question would never become a participant in a scheme which provides for him benefits no less favourable than those he would have been entitled to under the nuclear scheme according to its provisions as in force on the transfer date since, by the time he actually becomes a participant, the benefits, in the example, will have been reduced. It is correct, of course, that the NDA has to be satisfied before the transfer date, that the receiving scheme is an appropriate pension scheme in relation to the person concerned and it is also correct that the NDA does not have to be satisfied on an ongoing basis that the receiving scheme is an appropriate pension scheme. But it does not follow from those propositions that the NDA is not concerned with whether the receiving scheme will continue to satisfy the "no less favourable" test by reference to the provisions of the nuclear scheme in force as at the transfer date. Mr Hitchcock has to say that the NDA does not need to be concerned with that but only needs to make a single assessment prior to the transfer date. That assessment will test the benefits under the provisions of the receiving scheme at the transfer date against the benefits under the provisions of nuclear scheme including its power of amendment at that time. The fact that the benefits under the former may be reduced before the person in question becomes a participator is, on his argument, beside the point. In my judgment, not only is that a surprising result, but it is also contrary to the natural reading of the words used. What the person in question must be able to do is to exercise an option to become a participant in an appropriate pension scheme. That suggests that the receiving scheme must be an appropriate pension scheme in relation to that person when he exercises his right of election. The receiving scheme will be an appropriate pension scheme in relation to the person in question in the example if, before the transfer date, the NDA is satisfied, that the benefits available under the provisions of the receiving scheme, taken together with the benefits under paragraph 11(6)(a), are no less favourable than those under the provisions of nuclear scheme in force as at the relevant date. The natural interpretation of that requirement is, in my view, that the NDA must, before the transfer date, compare the benefits which will be available to the person in question once he has exercised his option with the benefits under the nuclear scheme at the transfer date. If the benefits under the receiving scheme can be reduced before the person in question exercises his option, that scheme cannot be an appropriate pension scheme in relation to him at the transfer date. It is a consequence of Mr Short's interpretation that even a transfer within the public sector requires that the receiving (public sector) scheme must provide benefits which cannot be reduced by amendment in respect of service after the date of the amendment. This is a surprising result, but it is not enough to persuade me that Mr Short's approach is wrong. Accordingly, I conclude that, after taking account of benefits falling within paragraph 11(6)(a), a receiving scheme must provide benefits in respect of all future service which are no less favourable than the benefits provided by the nuclear scheme on the transfer date ignoring its power of amendment. This makes it strictly unnecessary to decide whether the conditions laid down in Pepper v Hart to justify recourse to Hansard are fulfilled. Mr Hitchcock says that there should be no such recourse (hardly surprisingly because if recourse is had, the material certainly does not support his case). In the light of the decision which I have reached without recourse to that material, Mr Short does not need to rely on it. However, in case I am wrong in my decision on statutory construction (and, as I have said, I have found the arguments finely balanced), I will say something about the statements in Hansard on which Mr Short relied. I do so for two reasons. First, I may be wrong in thinking that there is not present the sort of ambiguity sufficient to justify reference to Parliamentary material particularly if I am wrong, as a matter of law, in my interpretation. Secondly, it provides a convenient way of introducing certain material to which I wish to refer anyway. And, in the light of that material, it can be seen that the statements relied on by Mr Short do not provide that level of clarity which is necessary before such statements can be relied on. The well-known statement of Lord Browne-Wilkinson in Pepper v Hart at p 640B-D sets out the three conditions to be fulfilled if Parliamentary material is to be referred to: (a) the legislation is ambiguous or obscure or leads to an absurdity; (b) the material relied upon consists of one or more statements by a Minister or other promoter of the Bill together if necessary with such other Parliamentary material as is necessary to understand such statements and their effect; and (c) the statements relied on are clear. The courts have expressed concerns about the use sometimes sought to be made of Pepper v Hart and the extent to which it should go: see for instance Lord Bingham in R v SoS for the Environment ex p Spath Holme Ltd [2001] 2 AC 349 at 391D – 392 F; Brooke LJ in Flora v Wakom (Heathrow) Ltd [2007] 1WLR 482 at [12] and [13]; and Lord Steyn in R(Jackson) v A-G [2006] 1 AC 262 at [97] and [98]. I do not need to enter into further discussion of those aspects of concern identified. As to what is to be found in Hansard itself. There are two passages that I would mention. i) On 27 January 2004, Lord Whitty (the government spokesman in the House of Lords) was dealing with concerns about giving effect to the undertakings said to be found in the White Paper Managing the Nuclear Legacy – A Strategy for Action. There had been concerns about comparability and transferability between public and private sector employees, particularly with regard to pensions. As to that, in the course of a rather longer answer the detail of which adds nothing, he said: "Their pension entitlement, whether it is ongoing pension benefit or accrued rights, is protected – statutorily in this case. Because of the anxiety that has been expressed, we were persuaded that it was sensible to put the matter in statute….. It is absolutely there, and it is there in a way which few employees of any private or public sector have previously received." ii) On 22 March 2004, Lord Whitty was dealing with three amendments which really related to accrued benefits. In the course of his answer he said this: "….we intend to protect the existing employees and their future benefits in circumstances where, as a result of a decision by the NDA, they are required to transfer either to new employers…. or to the private sector….. …… As I said a moment ago, we intend to protect the future pension benefits of existing employees during this restructuring, and that essentially means employees of AEA and BNFL who are required to transfer to a new employer by the NDA. This policy is applied to a whole host of comparable systems where public sector workers have been required to transfer to a new employer, or to the private sector. There is well established documented guidance on that. ….. we have taken the rather exceptional step of underpinning in statute the policy to protect the future pensions of employed staff, with careful drafting of the Bill….. ….. Given that we have made the exceptional step of protecting in statute future benefits provisions of existing employees in the nuclear clean-up industry…….I cannot accept the amendments……" iii) Reference to well established documentation includes reference to the government policy document published in 1999, Fair Deal for Staff Pensions. I do not consider that the statements from Lord Whitty provide the clear statement required by Pepper v Hart. Although the statements do make clear what is in any event obvious, that some sort of protection is to be afforded to relevant employees in respect of their future service, the extent and duration of that protection is totally unclear. Indeed, it is impossible to read Lord Whitty as indicating that there would be protection going beyond what was already government policy generally. The difference was that that policy was to have statutory recognition in the context of the nuclear industry. As to that policy at the time when Lord Whitty said what he did, Fair Deal for Staff Pensions was the relevant guidance in force. Attached to that document was a Statement of Practice issued by the GAD explaining what was required for a scheme to be broadly comparable to existing public sector pension arrangements for an individual ("the GAD Statement"). This did not require the new employer's scheme to be identical to the public sector scheme but it did mean that, taking all of the differences between the schemes into account, the effect should be that "no identified individual or group of individuals in the transferred workforce should suffer material detriment overall to the terms for accrual of further pension rights through their future service". The GAD Statement recognised that security in private sector schemes could not be provided in the same form as that applying in the public service. The same point is made, as I have already mentioned, by Mr Johnston in the caveat which he included in the Certificate. However, the GAD Statement of Practice stated that specific safeguards would be sought including "protection of accrued rights, on an on-going basis, on any rule change". It can be seen from this that there was a recognition that the private sector scheme might be amended in the future and that the protection, on such an amendment, would be for accrued rights (the words "on an on-going basis" being intended, I imagine, to include (i) benefits accrued not only up to the time of the transfer but also from the time of the transfer up to the date of the amendment and (ii) to ensure a final salary link in relation to benefits accrued up to the date of the amendment). The same recognition can, I think, be found in paragraph 25 of the Summary of the Main Terms of the Scheme forming Annex A to the Certificate: see paragraph 37.v) above. Mr Short nonetheless submits that the contents of the GAD Statement show that the policy of Fair Deal for Staff Pensions was to provide continuing protection for future pension rights. He says that the policy was to provide substantive and enduring protection which he identifies as protection that would not be subject to any subsequent rule change. He relies on paragraphs 9 to 19 of Fair Deal for Staff Pensions. In particular, he refers to: i) paragraph 9 where it is said that "staff should continue to have access after the transfer to a good quality occupational pension scheme under which they can continue to earn pension benefits through their future service" [emphasis in original]; ii) paragraph 11 where the policy is aid to be to prevent "the unintended upshot of a business transfer [being] a detriment to staff pension benefits"; and iii) paragraph 14 where it said that "A broadly comparable scheme is one which, in the professional opinion of the actuary, satisfied the condition that there are no identifiable employees who will suffer material detriment overall in terms of their future accrual of pension benefits under the alternative scheme". These statements are not, in my view, sufficient to displace the recognition that the private sector scheme might be amended in the future and that the protection, on such an amendment, would be for accrued right. There is more force, I consider, in his point concerning paragraphs 20 and 21 which, in effect, envisage the provision, on a second generation transfer, of a scheme broadly equivalent to the original public sector scheme. This is the same curiosity or anomaly as the one which I have addressed at paragraphs 68ff above. It is, I accept, a point in favour of Mr Short's approach. But it does not result in Fair Deal for Staff Pensions providing the clear guidance necessary for it to be relied on, by reference, in relation to Lord Whitty's statements. Mr Short further submits that Lord Whitty's use of the phrases "ongoing pension benefit" and "future pension benefit" make it clear that the protection to be afforded was that the value of future benefits (taken as whole) should never be less that the value of future benefits (taken as a whole) under the nuclear pension scheme in question. That clear statement is not to be limited by reference to Fair Deal for Staff Pensions. He submits that where the statement of the relevant Minister is, on its face, sufficiently clear to pass the Pepper v Hart test, it would be inappropriate to seek to cast doubt on that by reference to what is said in a document referred to by the Minister in a slightly different context. Still less would it be appropriate to seek to do so by reference to a document (the GAD Statement of Practice) referred to in the document (Fair Deal for Staff Pensions itself) referred to by the Minister. I reject those submissions. First, I do not agree that the words on which Mr Short relies, even taken by themselves, provide the clear guidance which he submits they do. Secondly, they cannot, in any case, be taken in isolation. It would be quite wrong to read those words as a statement that protection going beyond what was already policy was intended; quite the opposite: if anything is to be derived from what Lord Whitty said, it is that the existing policy, and no more, was to be given statutory force. To identify that existing policy, it is necessary to look not only at Fair Deal for Staff Pensions but also at the GAD Statement of Practice, since the latter is attached to the former and reflects how the policy set out in the former is to be understood. In my judgment, nothing in Hansard or the policy guidance found in Fair Deal for Staff Pensions including the GAD note throws any helpful light on the true meaning of Part 4. My conclusion therefore remains as I have stated it in paragraph 83 above. The SPA and the Certificate including the Undertakings It remains to consider the effect of the SPA, the Certificate and the Undertakings against the background of Part 4 construed as I have held it should be. There is a short answer to this so far as benefits are concerned since it is accepted by Mr Hitchcock that, if Mr Short is right on his construction of Part 4, then the SPA, the Certificate and the Undertakings cannot be construed, or given effect to, so as to permit the Scheme to be amended to reduce the benefits currently provided. Mr Hitchcock must be right to make that concession since those documents can and should be construed and implemented consistently with the statutory requirements. The position in relation to an increase in contributions is more complex. In principle an increase in contributions is as objectionable as a decrease in benefits. However, as we have seen, the SPA and the Certificate (including the Undertakings) make special provision for an allowance to the Transferring Employees to protect their take-home pay. But that allowance appears to be subject to an off-set in respect of pay increases under clause 6.6 of the SPA. I shall address this aspect in more detail later. Subject to that, the Proposed Changes cannot properly be made. In case I am wrong in my interpretation of Part 4, it might be helpful to the parties to have my views on the effect of the SPA and the Certificate including the Undertakings on that basis. As to the SPA, I start with Clause 6.3 which provides for the Transferred Members to be offered benefits in line with the Certificate and the Undertakings, it is the provisions of those documents to which one must turn to see what it is, contractually, that Urenco has to provide. Clause 6.6 appears to reflect the agreement that the take home pay of Transferred Members should not be reduced as a result of the payment of contributions of 7.5% rather than 5%. However, as already explained the reference to "payment profiles" appears to be an error. Given that error, the Clause, up to the end of the second sentence, really makes little sense. It seems to me, however, that Clause 6.6 is to apply to the special allowance envisaged by the Certificate and the Undertakings in the way in which it would have applied to the guaranteed payments made by the non-existent payment profiles. Turning to Annex A of the Certificate, this sets out the main terms of the Scheme applicable to the Transferred Employees. It is a slightly curious feature of the arrangements agreed as they were actually implemented that the main terms, or at least some of them, have not found their way into the formal scheme documentation: and this is so notwithstanding that the Trust Deed contains, at Schedule 2 some special provisions which do apply to the Transferred Employees. The evidence does not reveal whether Annex A is a summary of proposals prepared by the GAD, reflecting the contents of other documents containing proposals agreed by the NDA and Urenco, or whether it simply sets out verbatim such agreed proposals. Having no other material, I proceed on the assumption that the main terms as summarised do indeed reflect agreed proposals. I also note that there is not an exact overlap between the main terms and the Undertakings. I have set out at paragraph 37 above the relevant provisions of Annex A. As appears from the heading (quoted in that paragraph) Annex A is concerned with the provisions of the Scheme as applicable to the Transferred Employees. It is not, of course, (and does not purport to be) an exhaustive set of provisions applicable to the Transferred Employees: rather, it is concerned with identifying provisions under which the Transferred Employees are treated differently from other members. It might be thought that the power of amendment in the Scheme is seen by the GAD as applicable to the provisions of Annex A subject, always, to the effect of the Undertakings; indeed, paragraph 25 of Annex A can be seen as, express recognition that the power of amendment is to apply. However although paragraph 25 does provide support for that conclusion, it is important to remember Note 9 to the Certificate, see paragraph 35iii) above: changes to the CPS after the transfer date fall outside the scope of the "broadly comparable" certificate. On one view, this is simply a reflection of the provisions of paragraph 11(7) referring to the provisions of the nuclear scheme in force as at the transfer date. The fact that benefits are actually increased after that date does not mean that the receiving scheme must follow suit. Equally, the fact that the benefits under the nuclear scheme are actually reduced after the transfer date does not allow the receiving scheme automatically to follow suit either. On another view, Note 9 goes further than that and is indicating that the "broad comparability" certificate is given on the basis that the potential for change in the provisions of the CPS is ignored. This is my own view of what Note 9 is saying. And if that is so, Mr Johnston can have been certifying no more than that the "broadly comparable" assessment is being made ignoring the powers of amendment in each scheme. That approach is consistent with the part of the Certificate quoted at paragraph 34 above. It is the package of benefits under the Scheme which are said to satisfy Part 4: that package is the package as it stood at that time, not a package subject to amendment at a later date pursuant to a power of amendment. It follows, in my view, that Clause 6.3 of the SPA requires benefits to be provided which reflect the basis on which Mr Johnston gave the Certificate, namely a package of benefits which is not subject, as a whole, to any power of amendment which might reduce those benefits even for service after the date of the amendment. An increase in contributions, such as is envisaged by the Proposed Changes, can be seen as detrimental to the Transferring Members in the same way as a reduction in benefits. However, the SPA and the Certificate (including the Undertakings) make specific provision for this. Thus Clause 6.3 of the SPA requires provision to be made in accordance with the Undertakings, paragraph 9 of which provides for an allowance to ensure take-home pay is not reduced, something which is also reflected in paragraph 11 of the main terms. Flesh is put on this by Clause 6.6, which I have considered at paragraphs 31, 32 and 98 above. This regime was expressly taken into account by Mr Johnston in signing the Certificate. It might therefore be argued, that contributions under the Scheme can be increased provided that the special allowance is correspondingly increased. I do not know whether pay increases have already resulted in a reduction of the special allowance to nil; if they have, it is arguable that there is some headroom to introduce an increase in contributions without triggering further liability to make a special allowance. I would reject such an argument. In my view the Certificate is to be read in the context of the package of benefits, and implicitly, contributions which Mr Johnston refers to. Although he must have accepted that the special allowance would compensate for the immediate increase in contributions from 5% to 7.5%, he cannot be seen as saying anything about potential increases in contributions. Clause 6.3 of the SPA requires benefits to be provided in accordance with the Certificate. That, in my view, requires contributions to be made in accordance with the provisions of the Scheme as contemplated at the time. That is to say at 7.5% and no more. I have set out in paragraph 38 the relevant provisions of Annex B to the Certificate which contains the Undertakings. The Undertakings appear to be free-standing and are not expressed to take effect as amendments to, or special provisions of, the Scheme. In that respect, they differ from the provisions of Annex A. The Undertakings are referred to indirectly in the Certificate in the third paragraph on the third page which I have set out at paragraph 35 above. The Undertakings are part of the "proffered arrangement". To the extent that benefits provided under those arrangements are not available under the provisions of the Scheme, they are to be brought into account under paragraph 11(6)(a). In that last context, paragraph 9 of the Undertakings provides, it will be remembered, for the payment of an allowance to Transferred Employees to ensure that their take home pay is no lower after joining the Scheme than when they were active members of the CPS. This undertaking covers the shortfall in take-home pay as a result of the higher contribution rate payable under the Scheme as compared with the CPS. I have already explained how I see the provisions of Clause 6.6 of the SPA (and those of paragraph 9 of the Undertakings) operating in the context of the Certificate, concluding that the contributions cannot be increased. However, viewing paragraph 9 in isolation, the position would be different. In that case, pay increases, insofar as they result in an increase in take-home pay, would frank the obligation to make payments in accordance with the Undertaking. Once take-home pay had increased by 2.5%, nothing would be payable pursuant to this undertaking assuming that the Scheme contribution rate remained at 7.5%. If the contribution rate were to increase (as it will under the Proposed Changes if they could be validly implemented) the undertaking would then bite in relation to any shortfall in take-home pay on the basis of the proposed 9.5% contribution rate, that shortfall being assessed by reference to take-home pay immediately prior to the transfer. It is clear that the power of amendment under the Scheme is irrelevant to the undertaking given in paragraph 9. The benefit of that paragraph is not one which arises under the provisions of the Scheme. It is not in fact subject to the power of amendment; nor, in my view, is there any justification for implying into the Undertakings, a power similar to the power of amendment or any other power to remove or reduce the value of that undertaking. The other undertakings which are of relevance in the present case are those found in paragraph 6 (providing for a normal retirement age of 65), paragraph 8 (providing for all elements or pensionable remuneration under the CPS to count as Pensionable Pay) and paragraphs 11 and 12 (providing for RPI increases of benefits in payment or deferment). Those undertakings listed are all reflected in Annex A as part of the main terms. All of those undertakings relate in one way or another to benefits under the Scheme: paragraph 6 of the Undertakings corresponds with paragraph 4 of Annex A, paragraph 8 corresponds with paragraph 6 and paragraphs 11 and 12 correspond with paragraphs 14 and 23.2. They could have been reflected in the Scheme by the introduction of express amendments although this was not in fact done. The question then arises whether the Undertakings (apart from paragraph 9) are subject to variation. This issue only arises if I am wrong in my conclusions in paragraph 107 above. What follows proceeds on the basis that I am wrong. Mr Hitchcock says, perfectly correctly, that the Undertakings were provided in the context of the requirements of Part 4. He says that they go no further than is needed to give effect to those requirements. Had the protection for the Transferred Employees been provided not by way of undertaking but by amendments to the Scheme, the power of amendment would have applied. Accordingly, if an amendment to the Scheme were made, the amendment would override the Undertakings to the extent necessary. I accept, of course, that the Undertakings must be construed in the context of the requirements of Part 4. But Mr Hitchcock's argument is to some extent to put the cart before the horse. The GAD relied on the Undertakings as part of the certification process. I do not know (and direct evidence might well be inadmissible anyway) what approach the GAD took to the Undertakings. Mr Johnston might have read them as permanent undertakings and not subject to the power of amendment or he might have read them as Mr Hitchcock would have me read them. If it were obvious that the GAD would have been able to give his certificate even adopting of Mr Hitchcock's approach, there might be something in the argument. That, however, is not the actual position. It seems to me that the Undertakings must be construed according to the language which they use, an exercise to be carried out against the background of Part 4. But the court cannot carry out that exercise on the assumption that Mr Hitchcock's approach would necessarily have led Mr Johnston to give the Certificate. In my judgment, the Undertakings are to be read as permanent in their effect. There is nothing in their wording or on the context in which they were given to suggest that they were time limited or subject to unilateral variation. This is clearly the case in relation to paragraph 9 which suggests that the starting point in relation to the other paragraphs is that they are permanent in their effect. It does not make any difference, in my judgment, that those undertakings could have been given effect to by amendment to the Scheme itself. The fact that that course could have been taken does not lead to the result that the provisions giving effect to the amendment could then have been further amended by, for instance, removing an element of remuneration from Pensionable Pay or reducing the increase of benefits in payment or deferment. To say that it would lead to that result would be to beg the question of what, if any, constraints on the power of amendment it would be necessary to impose in the first place in order properly to recognise the scope of the Undertakings. As to that, I consider that any amendments would have to reflect the irrevocable nature of the Undertakings and that would entail the imposition of constraints on the power of amendment itself. Accordingly I consider that permanent effect must be given to paragraphs 11 and 12 of the Undertakings. Conclusions My conclusions on the effects of the EA 2004, the SPA and the Certificate (including the Undertakings) are as follows: i) Part 4 Schedule 8 EA 2004 requires the "no less favourable" assessment under paragraph 11(7) to be carried out by reference to the provisions of the nuclear scheme in force on the transfer date ignoring its power of amendment. ii) Accordingly, benefits for future service under the Scheme, taken together with any benefit within paragraph 11(6)(a) cannot be reduced below the benefits for future service under the CPS in accordance with its provisions (ignoring its power of amendment) in force on 1 October 2008. iii) So far as initial contributions are concerned, it was permissible for the Scheme to provide larger contributions than the CPS in the light of the benefit represented by the special allowance, which could be brought into account under paragraph 11(6)(a). Mr Johnston took this into account in providing the certificate. iv) Increases in contributions to the Scheme are, in principle, to be treated in the same way as reductions in further service benefits, and are therefore objectionable. v) If I am wrong under i) above, Clause 6.3 of the SPA nonetheless requires benefits to be provided which are broadly equivalent to those under the CPS as at 1 October 2008. Benefits for future service cannot be reduced consistently with that contract. In any event, the Certificate only relates to the package of benefits provided by the Scheme, which were assessed ignoring the power of amendment in the CPS. The Scheme could not be said to have satisfied the "no less favourable" test if benefits for future service are subject to reduction. vi) If I am wrong in giving Clause 6.6 of the SPA and the Certificate such a restricted meaning, paragraph 9 of the Undertakings nonetheless requires any increase in contributions to be matched by an increase in the special allowance after taking account of any pay increases since 1 October 2008; pay increases may "frank" the special allowance. Disposition The answers to the questions raised on the Claim Form are as follows: i) The protection afforded to the Transferred Employees pursuant to Part 4 is such that, so far as they are concerned, the power of amendment in the Scheme may not be exercised so as to vary detrimentally their future service benefits. ii) The effect of the SPA and the Undertaking is such that, so far as the Transferred Employees are concerned, the power of amendment in the Scheme may not be exercised so as to vary detrimentally their future service benefits. Accordingly, the Proposed Changes are not permissible.

Opinion of Mr Advocate General Fennelly delivered on 16 September 1999. - Volker Graf v Filzmoser Maschinenbau GmbH. - Reference for a preliminary ruling: Oberlandesgericht Linz - Austria. - Freedom of movement of workers - Compensation on termination of employment - Refusal where a worker terminates his contract of employment in order to take a job in another Member State. - Case C-190/98. European Court reports 2000 Page I-00493 Opinion of the Advocate-General I - Introduction 1. The present case gives the Court an opportunity to define further the scope of its ruling in Bosman on the application of Article 48 of the EC Treaty (now, after amendment, Article 39 EC) to restrictions on the freedom of movement of workers which are not discriminatory on grounds of nationality. It raises the question whether a worker's loss, upon voluntary resignation in order to take up employment in another Member State, of a contingent statutory right to compensation by his employer payable upon forced resignation, dismissal or retirement is capable of constituting such a restriction, where the amount of any such compensation is related to the length of the worker's period of continuous service with his former employer. In addressing that question, a number of basic issues must be resolved, in particular: the definition of a prohibited non-discriminatory restriction on the freedom of movement of workers: whether its restrictive effects must be in some way conditional on the exercise of freedom of movement; whether it must affect access to an economic activity or can also arise from regulation of its exercise; whether its effect must be to prevent workers exercising their rights or simply to deter or hamper them in so doing; whether its restrictive effects must be of a certain level of gravity or intensity; whether its preventive or dissuasive effects must be direct or may be indirect; and whether these burdensome effects must be certain or may be merely contingent. In seeking to resolve these issues, particular regard must be had to the broader question whether the Court's more developed case-law on the free movement of goods, including the judgment in Keck and Mithouard limiting the application of some of its earlier pronouncements, can furnish useful guidance. II - Factual and legal context The national law 2. The relevant compensation provisions of Paragraph 23 of the Angestelltengesetz (Austrian Law on Employees; hereinafter the AngG) state as follows: (1) If the employment relationship has continued uninterruptedly for three years, the employee shall be entitled to a compensation payment on termination of that relationship. That payment shall amount to twice the salary due to the employee for the last month's employment and after five years' service shall increase to three times, after ten years' service to four times, after 15 years' service to six times, after 20 years' service to nine times and after 25 years' service to 12 times the monthly salary. (...) (7) There shall ... be no entitlement to compensation if the employee gives notice, leaves prematurely for no important reason or bears responsibility for his premature dismissal. (...) 3. Paragraph 23a of the AngG provides that a right to compensation shall also exist in the case of a continuous employment relationship of at least ten years' duration which ceases upon termination by the employee of the contract of employment because the employee has reached retirement age (65 years in the case of a man, 60 in that of a woman), because of early retirement, or due to incapacity or reduced capacity for work. It appears that compensation payments under Paragraphs 23 and 23a of the AngG are subject to favourable tax treatment, so that the sums actually received by beneficiaries considerably exceed the normal net salary for the number of months on the basis of which compensation is calculated. 4. Article 26 of the AngG sets out the circumstances in which the premature termination of the employment relationship by an employee does not deprive him of the right to compensation on the terms outlined immediately above. As the Court points out in its judgment in Gruber, delivered earlier this week, all of these important reasons for termination relate either to working conditions in the employing undertaking or to behaviour on the part of the employer by virtue of which continued work there is impossible. The national proceedings 5. The plaintiff in the main proceedings, Mr Graf (hereinafter the plaintiff), is a German national. He was employed in Austria by the defendant, Filzmoser Maschinenbau GmbH (hereinafter the defendant), from 3 August 1992. He gave notice of termination of the employment relationship on 29 February 1996, with effect from 30 April 1996, and on 1 May 1996 he commenced employment with an undertaking in Germany. The plaintiff sought payment of two months' salary under the terms of Paragraph 23(1) of the AngG, which was refused by the defendant, in reliance on Paragraph 23(7). The plaintiff brought proceedings seeking the disputed payment before the Landesgericht Wels (Regional Court, Wels), which declined to grant the order sought, whereupon he appealed to the Oberlandesgericht Linz (Higher Regional Court, Linz, hereinafter the national court). 6. The plaintiff argued before the Landesgericht Wels that the limitation on the right to compensation in Paragraph 23(7) of the AngG principally affected migrant workers who voluntarily gave up existing employment in order to move to another Member State, thereby giving rise to indirect discrimination, and that it constituted, in any event, a disproportionate financial penalty amounting to a restriction on the mobility of workers which was not objectively justified. The defendant submitted that Paragraph 23(7) of the AngG was not discriminatory in effect, because most of those affected were and remained national residents. Furthermore, it was not designed to regulate access to the labour market, did not amount to a prohibition and did not prevent or deter persons from taking up employment in other Member States. It had, instead, the twin social aims of protecting workers from dismissal and of promoting employee loyalty. 7. The Landesgericht Wels found that Paragraph 23(7) of the AngG did not either discriminate on grounds of nationality or impose any impediment on the movement of persons across borders which was more severe than a restriction on comparable internal mobility. The loss of compensation in the present case did not result in a perceptible non-discriminatory restriction on mobility - it was not comparable to the transfer fee at issue in Bosman, which was fixed at so high a level that no employer would pay it, but was merely one factor to be included, in the same way as any other loss of social security benefits, in the overall assessment of the balance of financial advantage undertaken by a worker when deciding whether to change employment. Furthermore, any restrictive effect was objectively justified by the social aims of providing transition payments for employees who unexpectedly lose their jobs and of protecting older workers through the higher cost of dismissing them. 8. On appeal, the plaintiff submitted that the Court had not required in Bosman that restrictions of freedom of movement be perceptible. The national court stated that national residents were chiefly affected by the rule, so that there was no indirect discrimination against workers willing to migrate to work in other Member States. It doubted whether denial of compensation in cases of voluntary termination of employment by the employee was necessary to the achievement of the social-policy objectives mentioned by the Landesgericht, and observed that, on the one hand, employees were often neither faultless nor taken by surprise when dismissed by their employer and, on the other, workers might often have perfectly legitimate reasons voluntarily to change employment. It was also unsure of the test to be applied in identifying non-discriminatory restrictions on worker mobility which came within the scope of the Treaty - the Court stated in Bosman that a worker should not be preclud[ed] or deter[red] from exercising his fundamental right, but also referred to its judgment in Kraus, where it defined as restrictions any national rule which is simply liable to hamper or to render less attractive the exercise of such freedom of movement. 9. As a result of its doubts in this regard, the national court suspended the proceedings before it and referred the following question to the Court for a preliminary ruling pursuant to Article 177 of the EC Treaty (now Article 234 EC): Does Article 48 of the EC Treaty preclude national provisions under which an employee who is a national of a Member State is not entitled to compensation on termination of his employment relationship simply because he himself gave notice terminating that relationship in order to take up employment in another Member State? III - Observations submitted to the Court 10. Written and oral observations were submitted by the plaintiff, the defendant, the Italian Republic and the Commission. Written observations were also submitted by the Kingdom of Denmark, the Federal Republic of Germany, the Republic of Austria and the United Kingdom of Great Britain and Northern Ireland. IV - Arguments and analysis A - Discrimination on grounds of nationality 11. The plaintiff reiterated his argument that Paragraph 23(7) of the AngG constituted indirect discrimination on grounds of nationality. The defendant, the Commission and the Member States which submitted observations all take a contrary view. They deny that Paragraph 23(7) of the AngG has any discriminatory effects, in that it is indistinctly applicable and principally affects employees who voluntarily terminate their contracts of employment without leaving Austria. Furthermore, several of them argued that the national court had expressly stated in its order for reference that it was not indirectly discriminatory. 12. It is self-evident that Paragraph 23(7) of the AngG does not contain any direct discrimination on grounds of nationality. The national court did not, in fact, comment on the question of indirect discrimination on grounds of nationality, observing only that the AngG did not particularly penalise persons migrating to work in other countries. However, there is no evidence to suggest that it principally affects in practice persons of non-Austrian nationality. Therefore, I shall now turn to question whether Paragraph 23(7) none the less constitutes a non-discriminatory restriction on the free movement of workers. B - Non-discriminatory restrictions - Arguments 13. In the alternative, the plaintiff submitted that the case was comparable to Bosman, as it was immaterial whether a worker suffered a financial loss by virtue of changing employers or, as in that case, the new employer was obliged to make a payment in order to engage the worker. Thus, Paragraph 23(7) of the AngG also constituted a non-discriminatory restriction on freedom of movement. He also questioned whether the avowed objectives of the AngG - promoting employee fidelity and easing the transition from one post to another upon dismissal - justified such a restriction. 14. Regarding whether Paragraph 23(7) of the AngG constitutes a non-discriminatory restriction on the freedom of movement of workers, the other observations submitted may be divided into two groups. The defendant states the objective of Article 39 EC to be the removal of obstacles to movement arising from internal frontiers rather than deregulation and the encouragement of mobility for its own sake. Thus, only measures which render impossible or excessively difficult, in law or in fact, the taking up of employment in another Member State are prohibited by Article 39 EC. Examples include measures which impose greater disadvantages upon taking up economic activity in another Member State than in the State of application, as well as indistinctly applicable requirements for access to a profession or other economic activity which are more burdensome for non-domestic workers if account is not taken of their existing qualifications and skills. On the other hand, national measures whose restrictive effect on a trans-frontier change of employment is entirely neutral, having regard to their identical effects on changes of employment within the Member State in question, cannot be classified as restrictions prohibited by Article 39 EC. Otherwise, the scope of application of that provision would be impossibly broad and would extend to national rules on workplace incentives, pension schemes and employee protection as well as to any measure which made employment in a given Member State more attractive by ensuring a high level of remuneration or of job security. 15. On the other hand, the Commission (expressly or implicitly supported by the Member States which submitted observations) accepts that the judgments in Kraus and Bosman, as well as that, in the related field of establishment, in Gebhard, make clear that the prohibition on non-discriminatory obstacles to free movement of workers or of self-employed persons extends beyond measures with specific burdensome effects on trans-frontier mobility. However, despite the broad language used in those judgments to describe such restrictions, it counsels against extending the Treaty prohibition to all national provisions which might dissuade a worker from exercising his rights of free movement. In contrast, Bosman involved rules which expressly prevented a worker taking up employment as a footballer in another Member State. The Commission, Denmark, Italy and the United Kingdom all urge the Court, in various terms, to follow the advice of Advocate General Lenz in Bosman by expressly adopting a distinction, borrowed from Keck, between national rules regulating access to the labour market and those which merely govern the exercise of a particular activity, such as employee protection, pay scales, working conditions and so on. 16. Furthermore, the Commission argues that, before any distinction between access to and exercise of economic activity as an employed person even needs to be addressed, it should be established that there is a direct connection between the allegedly restrictive national rule and the decision to exercise the right of free movement in order to take up employment in another Member State. Germany submitted observations in a similar vein. 17. On a somewhat different note, both Austria and the United Kingdom posit tests based on the gravity or intensity of an alleged restriction. The amount of money at issue in the present case bears no comparison to the transfer fee demanded in Bosman. It can be treated, not as an effective prohibition on changing jobs, but as just one of many factors to be weighed in the balance by a worker considering such a step. C - The significance of Keck 18. I would like to state at the outset, in response to the last question posed in paragraph 1 above, that, in my view, the Court's case-law in the field of free movement of goods, including Keck, furnishes useful guidance on the application of Article 48 of the EC Treaty (now, after amendment, Article 39 EC). I will make a few preliminary observations about the development of the Keck case-law before examining the more immediate issues raised by the present case regarding the mobility of workers. I should add, however, that analogies between the two fields are rarely perfect and that, in particular, the reasoning in Keck can only be extended to the field of freedom of movement of workers if it is reduced to its essential elements, shorn of the more rigid and formalist distinctions - between product rules and certain selling arrangements - which are specific to the process of production and distribution of goods. Persons are not products and the process of migration for the purposes of employment or establishment abroad, including preparation therefor, cannot be so neatly divided into (mass) production and marketing stages. Furthermore, the dichotomy between product and selling rules is not exhaustive of the range of possible restrictions even in the field of trade in goods. 19. The formal distinction between product rules and selling arrangements is less important than the motivation which led to its adoption, which was to identify the circumstances in which different types of rules have the same undesired effect, that is, to affect access to the market. Thus, the Court singled out national provisions regarding certain selling arrangements, such as the rules against below-cost sales at issue in that case, because if such rules were indistinctly applicable and affected the marketing of all products in the same manner, in law and in fact, they were not, in the Court's view, of a nature either to prevent the access of imported products to the market or to impede their access any more than they did that of domestic products. Thus, they did not fall within the scope of the test set out in Dassonville, whereby Article 30 of the EC Treaty (now, after amendment, Article 28 EC) applied to all national rules liable to hinder trade between Member States either directly or indirectly, actually or potentially. For present purposes, Keck is most significant because it represents a reappraisal by the Court of its previous attempts to apply a test of great generality - that in Dassonville - in a uniform fashion to the definition of barriers to trade in goods. This had resulted in national rules which were neither discriminatory nor particularly restrictive of trade, such as those on shop opening hours, being subjected to the same prohibition and analysis of possible justification as national rules, such as product rules, which by the very fact of disparities in national regulation imposed serious impediments on the free movement of goods. It was reasonable for the Court to respond by developing presumptions, in the light of experience and of its knowledge of market behaviour, regarding the likely effects of different types of regulation on the achievement of the ultimate objective of Article 28 EC: the establishment of an internal market to which products from the different Member States have both equal and, subject to qualifications in the public interest, free access. Such presumptions should not, however, be conclusive. It is legitimate for the Court to develop presumptions about the market effects of different broadly defined categories of rules, provided that, in concrete cases, the validity of the presumption may be tested against the underlying criterion of market access, rather than automatically being taken as being sufficient in itself to dispose of the case. Such an approach would temper and refine the application of a broad uniform definition of restrictions such as that in Dassonville through a concrete assessment of the market effects of what are perceived to be more marginal types of regulation, while providing guidance both to national regulators and to economic actors as to the likely judicial response to such regulations. 20. It is not necessary, for the purposes of the present case, to examine the reliability of the Court's presumption in Keck that national provisions regarding selling arrangements will not affect importers' access to the market in the absence of direct or covert discrimination. As it happens, the Court has more recently applied the formal criteria in Keck with a relatively light touch in cases where it considers market access to be materially threatened. In Dior, the Court held that national rules which permitted the holders of trademarks or copyright to prevent parallel importers from advertising the reselling of goods came within the scope of Article 28 EC because access to the market would consequently be appreciably more difficult. The national rules could equally have been used, it seems, to prevent the advertising of goods which had escaped the domestic selective distribution system and the Court made no reference to differences in treatment of domestic and imported goods. (It may, however, have taken the view that such rules have a greater effect in fact on imports.) In another instance where the Court accepted that an advertising rule applicable to all traders - the total ban on television advertising directed at children in De Agostini - might have a greater impact on products from other Member States, it did so because the importer involved in the case stated that such advertising was the only available form of promotion enabling it to penetrate the market in question, without even referring to the position of domestic producers. Thus, it would appear that national rules can be deemed to have unequal effects in fact on the marketing of imported and domestic products and, thus, on their access to the market simply by virtue of the fact that new (imported) products have greater need of promotional opportunities than (domestic) products which are well established in the market - a result similar to that which would arise from the direct application of the test of substantial impact on market access suggested by Advocate General Jacobs in Leclerc-Siplec. Furthermore, in Alpine Investments, the Court held that Keck could not be applied by analogy to a non-discriminatory national regulation which deprived operators of a rapid and direct technique (but not necessarily the only technique) for marketing and contacting potential clients in other Member States - cold calling - because it directly affected access to the market in services. D - Discrimination on grounds of migration 21. I now turn to address directly the interpretation of the prohibition in Article 39 EC of obstacles to the free movement of workers and its possible application to Paragraph 23(7) of the AngG. Article 39(2) EC expressly provides for the prohibition of discrimination against workers on grounds of nationality, without having to determine the precise effects of any such discrimination on their access to the labour market. However, as this case relates to an alleged barrier to exit from a Member State in order to migrate to work elsewhere in the Community, it is necessary to advert not only to the Court's well-established case-law regarding the prohibition of overt or covert discrimination on grounds of nationality, but also to what might be called its case-law in respect of discrimination on grounds of migration. This case-law demonstrates that the guarantee of freedom of movement for workers within the Community in Article 39 EC also entails the prohibition of national measures which distinguish, not according to nationality, but according to whether a person engages in uninterrupted economic activity in his country of origin, on the one hand, or, on the other, either moves to another country to work in an employed or self-employed capacity or works in more than one country at a time, to the prejudice of those who thereby exercise their right of free movement. Examples of direct discrimination of this type include the national rules at issue in Commission v France, Stanton, Wolf, Masgio, Daily Mail, Ramrath, ICI and Terhoeve. This category will normally merge with that of covert discrimination on grounds of nationality in the case of measures applied to migrant workers by a receiving State, because of the presumption that foreign workers are principally affected thereby. In the case of differentiated treatment by the State of origin of migrant workers, no such presumption applies, so the two categories are more readily distinguishable. 22. Paragraph 23(7) of the AngG cannot be placed in this category of rule. Its application does not depend, in any way, on the exercise of Community-law freedom of movement or on any other trans-frontier element: the payment of compensation is denied irrespective of the intended destination of the worker who voluntarily terminates his contract without serious grounds and it is guaranteed irrespective of the subsequent movements of a worker dismissed by his employer. Furthermore, there is no evidence to suggest that the national court erred in stating that mostly national residents are affected by the rule, so that its application does not give rise even to covert discrimination on grounds of subsequent migration, i.e. as between workers who emigrate and those who prefer to remain in Austria upon termination, voluntary or otherwise, of their employment contracts. 23. It is, none the less, useful to note for the purposes of the discussion which follows that, as in the case of discrimination on grounds of nationality, the Court has also declined to formulate any test based on the material consequences for freedom of movement of differentiated treatment of migrant workers and of natural and legal persons exercising the right of establishment relative to those who remain in their Member State of origin. In the case of a prohibition, as was alleged in Daily Mail, the consequences are fairly clear, but in other cases, the Court has refrained from assessing the likely effect, if any, of the disadvantage in question on the prospective migrant's calculations: the difference in treatment was enough to establish a presumption that the national rule was one which could in fact preclude or deter or hinder a national of a Member State from exercising his Community-law rights. E - Other types of non-discriminatory restriction 24. Three other broad types of restriction on the freedom of movement of workers or of self-employed persons can be identified in the Court's case-law, which I refer to as neutral restrictions because the rules in question have been indistinctly applicable, have not expressly created distinctions on the basis of the exercise of freedom of movement and have been treated by the Court as being neutral in their effects as regards the nationality of the persons affected. These are - (1) national rules which limit an economic operator - typically a member of a liberal profession - to a single place of establishment; (2) national rules regarding qualifications for posts or professional activities, as well as those concerning recognition of qualifications which are not formally required for a specific economic activity; and (3) national rules which create a barrier to workers taking up new employment by requiring that the prospective employer pay a fee equivalent to several years' salary to the worker's former employer, even after the expiry of the worker's contract of employment with the latter. 25. With regard to the first type of restriction, the Court has approached such rules in the field of establishment on the presumption that they are not discriminatory on grounds of nationality and has held that they none the less restrict the freedom of establishment because that freedom is not confined to the right to create a single establishment within the Community, but extends expressly to the setting up of agencies, branches or subsidiaries in another Member State. The national rules could, therefore, be condemned as a direct denial of freedom of movement through a formal prohibition of one possible manner of exercising that freedom. In these circumstances, the fact that freedom of establishment within the Member State in question was similarly restricted was not, apparently, viewed as being relevant. 26. It would be possible to approach the second type of restrictive national rule, regarding qualifications, as a type of disguised discrimination on grounds of nationality or migration, in so far as migrants are much less likely than domestic economic actors to possess qualifications which conform exactly, without the need for further verification, to the criteria laid down. This would also be consistent with the case-law regarding the taking into account of prior work experience. However, the Court has indicated that such rules constitute restrictions on freedom of establishment and the free movement of workers even in the absence of discrimination on grounds of nationality. An analogy may be drawn with the application in the field of goods of indistinctly applicable national product rules or of duplicated checks on compliance with common product standards regarding health and safety, which in both cases subject the market access of imported goods to a dual regulatory regime and whose place within the scope of application of Article 28 EC remains, accordingly, assured after the decision in Keck. 27. The third, Bosman-type class of restriction may be compared with that in Klopp in that it directly affects a step in the exercise of free movement, that is, the change or taking up of employment. Furthermore, this is, in the case of free movement of workers, an essential step and not, as in Klopp, merely one possible manner of exercising the Treaty rights in question. 28. These three classes of non-discriminatory restrictions on freedom of movement share the attribute of being formal restrictions on access to economic activity in a Member State. Conditions are prescribed by law or regulation non-compliance with which constitutes an absolute bar to taking up the activity in question. In this regard, only Choquet and Kraus are exceptional, in that they relate to rules which, depending on the circumstances, could constitute handicaps rather than absolute bars to access to certain economic activities. In Kraus, the German degree-recognition rules at issue did not themselves make access to any activity contingent on securing such recognition, but the Court pointed out that possession of a postgraduate academic title could be a prerequisite for access to certain professions and could facilitate access to a profession or economic activity in other contexts. In Choquet, the Court observed that rules regarding recognition of driving licences exerted an influence, both direct and indirect, on the exercise of rights relating to free movement and, in particular, that possession of a driving licence duly recognised by the host State could affect the actual pursuit of a large number of occupations for employed or self-employed persons. F - A general test? 29. In a number of the more recent cases, the Court has defined non-discriminatory restrictions in terms reminiscent of those used in respect of rules which either discriminate on grounds of nationality or result in different treatment on the basis of the exercise of freedom of movement. In Kraus, the Court stated that Articles 48 and 52 preclude any national measure governing the conditions under which an academic title obtained in another Member State may be used, where that measure, even though it is applicable without discrimination on grounds of nationality, is liable to hamper or to render less attractive the exercise by Community nationals ... of fundamental freedoms guaranteed by the Treaty. In Gebhard, the Court subjected the application of national measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty to conditions of non-discrimination and of proportionate pursuit of general-interest requirements. Finally, in Bosman, the Court set out the following test: Provisions which preclude or deter a national of a Member State from leaving his country of origin in order to exercise his right to freedom of movement therefore constitute an obstacle to that freedom even if they apply without regard to the nationality of the workers concerned. The Court added that Article 39 EC also limits the application of national rules which impede the freedom of movement of nationals of that State wishing to engage in gainful employment in another. 30. The present case essentially concerns the scope of these broadly drawn definitions of neutral restrictions on freedom of movement. As I stated above, national provisions which discriminate overtly or covertly on grounds of nationality or which differentiate between persons according to whether they have exercised such rights give rise automatically to the conclusion that the enjoyment of those rights is prejudiced as a result, even if the likely prejudice is small in a given case relative to the remaining advantages of migration. Similarly, in my view, in cases where access to the employment market is barred by neutral formal requirements, which are contrary to the express guarantees of the Treaty regarding the manner of exercise of freedom of movement (as in Klopp) or which effectively subject migrants to duplicate requirements or to overburdensome recognition procedures (as in the qualifications cases) or which require payment of a fee in order to exercise a Treaty right (as in Bosman), the resulting prejudice to the exercise of Treaty rights is evident. One can state that such rules impede, deter, preclude or render less attractive the exercise of freedom of movement. This language should not, however, be mistaken for a test of general application. The imposition of conditions regarding entry to the market or the taking up of economic activity is itself sufficient to establish the existence of a restriction, even if the condition can be relatively easily satisfied (this being an element in determining whether or not the restriction is justified). The same, broadly speaking, can probably also be said of formal conditions imposed regarding matters which are intimately connected with successful access to the market, such as those governing recognition of a qualification which is necessary or beneficial to the exercise of many professional activities. G - The limits of a general test 31. It would be possible to construe the broadly worded tests quoted above from Kraus, Gebhard and Bosman as relating solely to the sorts of formal conditions of access to the employment market which were at issue in those and the other cases discussed at paragraphs 24 to 28 above. On the other hand, the Court did not advert expressly to any such limitation of the scope of application of the criteria it laid down in those cases. If, however, it were proposed to treat as restrictions on the exercise of freedom of movement neutral national rules which allegedly preclude, deter, impede, hinder or render less attractive such exercise simply by raising material barriers, for example, by establishing commercial and regulatory conditions in the market in question which are less enticing than in other Member States, or by offering benefits which would be lost in the event that a worker changed employment, those criteria could not be applied in the same way as in the case of a formal condition. Prejudice to the exercise of the freedom of movement of workers or self-employed persons cannot be automatically presumed in all cases where an apparently burdensome national regulation of economic activity, or the loss of a benefit in the case of a change in economic activity, is at issue. Such an approach would be equivalent to applying the Dassonville test, in its most far-reaching construction, to freedom of movement of persons. Where an alleged obstacle to freedom of movement does not result from a formal condition of market participation but is instead alleged to arise from some neutral material barrier or disincentive deriving from national regulations, the prejudice to the exercise of Community-law rights must be established. 32. In my view, if the possibility of treating such national rules as restrictions on freedom of movement were admitted, the appropriate criterion would be that which has already been employed by the Court in Bosman and in Alpine Investments in order to reject the application by analogy to certain national rules in the field of the free movement of persons of the approach adopted in Keck to national provisions governing selling arrangements for goods: that, proposed by the Commission in this case, of a direct effect on access to the market in question of the worker or self-employed person concerned. Although the Court did not have occasion in either case to state whether fulfilment of this criterion was essential in all cases to establish the existence of a prohibited neutral obstacle to free movement, this appears to me to be necessary if the Treaty is not to be exploited as a means of challenging any national rules whose effect is simply to limit commercial freedom. Thus, neutral national rules could only be deemed to constitute material barriers to market access, if it were established that they had actual effects on market actors akin to exclusion from the market. As in the case of rules regarding selling arrangements in the case of goods, there can be no presumption that neutral national commercial regulations, or those governing pay scales, social protection and other matters of concern to workers, have this effect. In the normal case, the migrant worker must take the national employment market as he finds it. The same holds true for neutral national rules which are alleged to affect the worker's decision as to whether or not to leave a Member State in order to take up an economic activity in another. This is especially important as regards such possible exit restrictions because the number of formal restrictions on leaving a post is likely to be extremely limited relative to those applicable to taking up employment. If the Court established, in principle, that such material disincentives could, in certain cases, constitute restrictions on freedom of movement, aggrieved persons should be required to reverse that presumption by demonstrating that a particular rule has, in all the circumstances, such a burdensome and deterrent effect on market access as to constitute a direct denial of such access. It is, of course, implicit in such an approach that the existence of the alleged material denial of market access must be ascertained by reference to the circumstances of the particular complainant. 33. My analysis is, I think, similar to that of Advocate General Lenz in Bosman, where he sought to establish a distinction between national rules regarding access to the market and those merely governing the exercise of an economic activity. Advocate General Alber has expressed a different view to Advocate General Lenz in Lehtonen, arguing, by reference to Keck, that rules regarding the exercise of a profession are closer to product rules than to those regarding selling arrangements, in that they directly affect citizens, who may thus have to take into account different rules and to acquire new skills every time they migrate from one Member State to another. However, I think that the apparent disagreement arises in part from a different understanding of what is meant by rules governing the exercise of an economic activity. According to the scheme I have outlined above on the basis of the case-law, in particular that governing qualifications, national provisions which require certain skills of economic actors and thus tend to subject migrant workers to a dual regulatory regime are more readily classifiable as formally affecting access or, at the very least, as in Kraus and Choquet, as being sufficiently closely bound up with market access as to be subjected to a similar regime. H - The present case 34. However, it is not necessary, in my view, for the Court to take a stance in the present case on the question whether such neutral material deterrents or impediments to workers' exercise of free movement constitute, in principle, restrictions on such movement prohibited (subject to possible justification) by Article 39 EC. It seems clear to me that Paragraph 23(7) of the AngG does not satisfy the necessary conditions, outlined immediately above, for the potential application of any such prohibition, that is, its effects on the decision to terminate an employment contract, however direct, are not such as to restrict access to, or, in this case, exit from, a national labour market. This conclusion is not affected by the small size of the amounts of money involved relative to those in a case like Bosman. In different circumstances, a rule denying a worker the equivalent of almost three months' net salary could be taken to have a powerful effect on his calculations. I reach this conclusion because it cannot be said that the AngG in any real sense denies this sum to the plaintiff. It provides for a compensation payment when a certain contingency - unprovoked dismissal by the employer - materialises. The potential benefit of compensation for actual or constructive dismissal linked to his years of service is denied to the plaintiff upon voluntary termination of his contract in order to work in another Member State in the same way as he is denied the benefit of the Austrian system of compensation for damage arising from industrial accidents because he leaves employment there before such an accident occurs. The fact that the amount of potential compensation in the former case is linked to his salary and period of service, thereby rewarding those who remain with a single firm, does not take away from the fact that, at the time of his resignation from the firm, no such right to compensation has crystallised. The effect of the loss of a merely potential and uncertain right is, in my view, far too tenuous, remote and uncertain to constitute a restriction on free movement. 35. The fact that a worker can benefit, upon retirement after ten years' employment with a single employer, from a compensation payment based on his salary and years of service does not alter my conclusion. Such a right was very far from vesting in the plaintiff in the present case, who had worked with the defendant for less than four years. Even the potential enjoyment of that contingent right was subject to another, different contingency, namely, that the plaintiff would remain with the same Austrian employer for a further period of over six years. It is not necessary, in the circumstances of the present case, to comment on how the application of Article 23a of the AngG might affect the calculations of a worker who satisfied its conditions. 36. I conclude, therefore, that the denial to the plaintiff by Paragraph 23(7) of the AngG of a right to compensation upon his voluntary termination of his employment contract does not constitute a restriction on his exercise of the freedom of movement of workers. As a result, it is not necessary to examine the arguments regarding whether any such restriction might be justified in the present case by reference to social or employment policy or to the public interest in employee loyalty. V - Conclusion 37. In the light of the foregoing analysis, I recommend that the Court respond to the question referred by the Oberlandesgericht, Linz, as follows: A national rule which deprives a worker, who voluntarily terminates his employment relationship, of a benefit which he would have received if he had been dismissed or if he had terminated his employment for grave reasons does not constitute a restriction on the freedom of movement of workers prohibited by Article 48 of the EC Treaty (now, after amendment, Article 39 EC), where the application of the national rule in question is in no way dependent on the worker actually exercising such freedom of movement in order to take up employment in another Member State.

Lord Justice Buxton: This is a renewed application for permission to appeal from a determination of the Asylum and Immigration Tribunal, which was promulgated, or at least prepared, on 6 July 2007. The applicant is a citizen of Sudan who came to this country in, I think, 2006 and claimed asylum, having passed through France and Italy on his way here. He said that he was concerned that he would encounter serious problems on return to the Sudan, basically for two reasons; one, because of his Tunjur ethnicity and therefore being likely to be harassed as a member of that ethnic group (particularly engaged in crop trading in Darfur); and secondly, he had been the personal driver of a person who held a high position within the JEM, an organisation regarded with hostility by the authorities in the Sudan, and more particularly that he had been, in March 2006, arrested and tortured, having eventually managed to escape in circumstances to which I shall have to return. His application was originally dismissed by an immigration judge, but on reconsideration a senior immigration judge considered that the medical evidence had not been satisfactorily dealt with. There were, in his view, two objections. One, that the credibility of the applicant had been dismissed before the medical evidence was considered and secondly, that what was said about the medical evidence had been itself unsatisfactory. The first of those objections does not now arise, in view of the terms in which the determination under appeal expressed itself. The second of those objections is still pursued. The medical report, which it is accepted now was from a doctor who was qualified and capable of explaining the nature and origins of scarring, set out a series of scars that this gentleman had on his body. The applicant said that they were incurred by being beaten by the Sudanese security forces in the way I have already explained. In particular, he pointed to a scar on one of his arms where he said had been burnt with a hot knife, and he, for the benefit of the doctor, drew the knife, which fitted the shape of the scar. The doctor in his report, as set out by the senior immigration judge who considered the application for reconsideration, said this: "The appearance of his scar on his left arm is consistent with a burn from an object, very similar to the object he drew for me and told me was the blade of a knife. The smaller relatively leaner and horizontal scar on his left upper arm is also consistent with a cut from a sharp object, very similar to a knife, which was described by Mr Ali. The appearance of the other scars on his lower limb and right upper limb… and the scars on back and left side of his neck… are consistent with trauma from blunt objects of different sizes and shapes. The appearance of these scars also suggest that their original wounds have been infected during the healing process and they finally healed with secondary intention (without the skin edges being opposed during the healing process) and therefore are likely to be consistent with Mr Ali's description." The senior immigration judge drew attention, and Mr Jafar before me this afternoon draws attention, to the first two of those scars. Mr Jafar says (picking up the suggestion of the senior immigration judge that these were different from normal cases of scarring in that a specific origin for them was alleged by the applicant, and that the examining physician agreed that the appearance of the scars was consistent with the aetiology set out by the patient), and this was the ground upon which the matter was remitted, that this was a more detailed and circumstantial investigation of those scars than had been given by the original immigration judge. When the determination under appeal turned to that point, the Tribunal said this. Having said that it would deal first with the medical report, it quoted from the case of SA (Somalia) v SSHD [2006] EWCA Civ 1302, in which this court said: "It is…desirable that, in the case of marks of injury which are inherently susceptible of a number of alternative or 'everyday' explanations, reference should be made to such fact, together with any physical features or 'pointers' found which may make the particular explanation for the injury advanced by the complainant more or less likely." The Tribunal then commented: "Whilst stating the injuries are 'likely to be consistent with Mr A's description' the report does not go into or indicate that there are no other possible causes." It is argued on the applicant's behalf that that was not good enough. Either that was an inadequate consideration of the evidence the doctor had given, or at least the matter should have been gone into in more detail. I do not agree. The most that Dr Taghipour found himself able to say was, in each case, that the scarring was consistent with the account given by the applicant. True it is that in two cases the account was more circumstantial, but the doctor did not go on to exclude other possibilities, which he could have done if he thought that the evidence bore the weight that the applicant wished to put on it. Furthermore, it is not correct that the determination under appeal gave no weight at all to the medical report. What the Tribunal said in paragraph 30 of its determination was: "We have carefully considered Dr Taghipour's Report in the round and find that the effectiveness of this report only has the effect of not negating the claim." That was not the conclusion that the applicant wanted from it, but it was not a conclusion that was in itself adverse to him, and in my judgement it was one that the Tribunal was entitled to reach. I was pressed with a case in this court of Mibanga v SSHD [2005] EWCA Civ 367, a case to which I myself was party. Attention was drawn to the leading judgment of Wilson LJ, in which he criticised the adjudicator in that case for saying that the medical evidence did not assist her because it was possible that the scars could well be reflective only of injury, illness and disease. That case differs from this case in at least two ways. One, because the adjudicator gratuitously offered an explanation, which was an explanation that was actively adverse to the medical report, and secondly, because in that case she excluded consideration of the report entirely. That is not what the Tribunal did in this case. That meant, therefore, that since the medical evidence was in the tribunal's assessment neutral, it had then to go on and consider the general question of credibility. In paragraph 34 it gave cogent reasons why it did not find the appellant to be a credible witness. That was not used to criticise the medical evidence. It was determined in the context where the medical evidence itself did not negate the claim, but what did negate the claim was the findings of the Tribunal that the applicant's account was inconsistent with the objective evidence about the practice of detention in Sudan. His explanation of how he got away was entirely incredible and the fact that he was allowed to escape was inconsistent with his claim that he was a prominent member of the JEM. Not surprisingly, none of that was in any way challenged before me or before the court below. What is sought to be said in this case is that the medical evidence is so much in this applicant's favour that it is at least arguable that it offsets those otherwise cogent credibility findings. The Tribunal was entitled to find that the medical evidence does not have that status. I will not grant permission to appeal. Order: Application refused

LORD JUSTICE PILL: This is an appeal against a judgment of the Employment Appeal Tribunal ("EAT"), Cox J presiding, delivered on 3 June 2005 following a hearing on 19 January 2005. The EAT allowed an appeal from a decision of an Employment Tribunal held at London Central, sent to the parties on 8 April 2004. The unanimous decision of the Employment Tribunal ("the Tribunal") had been that the present appellants did not discriminate against the present respondents, Mrs C Fletcher and Mrs T Parkes and Miss S Wilkinson, contrary to section 14 of the Sex Discrimination Act 1975. I will refer to the present respondents as the claimants. The claimants were participants in university courses for qualifications necessary to be practising midwives. Their courses involved both academic studies and clinical training. It is common ground that the courses are properly described as vocational courses and the claimants as vocational trainees. Each of the claimants gave birth to a child during the currency of her vocational course. Each of the claimants had been in receipt of bursary payments during their studies, the bursary system being operated by the first appellants, the Blackpool Wyre and Fylde NHS Hospital Trust. The practice was for bursary payments to cease if a vocational trainee suspended or withdrew his or her involvement in the course of study for any reason, subject to a rule allowing continuing payment in any event of up to 60 days absence in a year for ill-health. The claims involved a complaint that the claimants ceased to qualify for continuing bursary payment if they suspended their involvement in the vocational training as a result of their pregnancy and maternity ("maternity"). The original claims alleged that the claimants were workers or employees within the meaning of the statute. The Employment Tribunal found against them on that aspect of the case. Alternatively, they claim that there was sex discrimination, contrary to section 14 of the Sex Discrimination Act, in the failure to continue to make bursary payments to them during their maternity. The EAT held that there was sexual discrimination under section 14 and the matter was referred back to the employment tribunal for a remedies hearing conducted on the basis of the conclusion of the EAT. The appeal is now brought by the Trust and the Secretary of State for Health,. Mr Lynch QC submits, on a point of principle: did the Secretary of State unlawfully discriminate against the claimants by reason of the absence of a scheme providing for payment during maternity? That depends, submit both Mr Lynch and Mr Oudkerk on behalf of the appellants, on whether the "but for" test mentioned several times in the determination of the EAT is the correct test. They also pose the question: does the protection accorded by the law to pregnant workers extent to pregnant vocational trainees? Late on the first day of what was set down as a three-day hearing, it came to the attention of the court for the first time that the three claims had been settled between the parties. Whatever the outcome of the appeal, we are told, the sums paid to the claimants will not be reclaimed. We are also told that the Secretary of State has introduced a scheme, operative as from 1 June 2005, for maternity arrangements for NHS students and vocational trainees. We were then supplied by Miss Gill, for the claimants, with a document dated 21 September 2005, giving particulars of the scheme. The introductory part of the document provides: "The Department of Health has decided to implement new interim arrangements for students who need to leave their studies temporarily because of pregnancy and childbirth. This change is to ensure that students are not compelled to abandon their courses because of a lack of financial support during this period. The Government wants to encourage people to work in the NHS and believes family-friendly policies are important in encouraging people, particularly women, to consider a career in the NHS. Students taking leave from training from 1 June 2005 for reasons of pregnancy and childbirth will now continue to receive their existing NHS bursary payments. Full details of the arrangements are outlined in the FAQ section below [that is, the Frequently Asked Questions section] and further background information can also be obtained here. The interim arrangements have been introduced following full consultation and agreement from stakeholders such as UNISON, the Royal College of Nursing, the Royal College of Midwifery and the Equal Opportunities Commission." The particulars of the scheme are then set out in the FAQ section. "1. Students will continue to receive their existing NHS bursary payments throughout a period of maternity leave which has been agreed with their respective university. The bursary will normally continue to be paid up to a maximum of 45 weeks but may be extended if there are exceptional circumstances. "2. Full and part-time students who are in receipt of an NHS bursary who need to take a break from training due to pregnancy and childbirth. This includes nurses, midwives, allied health professionals and medical and dental students who are in receipt of an NHS bursary. EU students in receipt of a fees-only award, and assisted or seconded students will not be eligible. "3. Existing NHS bursary including older students' allowance, single students' allowance and dependence allowances will continue to be paid to you as normal. "4. In answer to the question 'what is the earliest date I can begin my period of maternity absence?' Normally, this cannot be earlier than 11 weeks before the expected date that your baby is due … "7. 'What happens if I am ill while pregnant or there are complications during or after my pregnancy? Can I still receive my NHS bursary if I have to extend my period of agreed absence beyond 45 weeks?' You will need to agree any period of absence exceeding 45 weeks with your university. In exceptional circumstances it may be possible for the bursary payments to be extended beyond 45 weeks. This would be based on individual circumstances and would need to be agreed between your university and the NHS PA Student Grant Unit." I will not read the remaining detail, save that in relation to backdating: "Payments for maternity absences commencing before 1 June 2005 cannot be authorised. The interim arrangements outlined above have been agreed with and are supported by key stakeholders including the Royal College of Midwives, the Royal College of Nursing and UNISON." The organisations mentioned in the document are supporting the claimants in the present litigation. We have also been supplied with a document found on a Government website in relation to the claimant Mrs Fletcher. That refers to the present litigation and also states: "It is abundantly clear that the Government wants to encourage people to work in the NHS and that family-friendly policies are important in encouraging people, particularly women, to consider a career in the NHS. Whilst the original Employment Tribunal in 2004 rejected these claims and any allegation of discrimination, it did raise questions about the policies underpinning the NHS bursary scheme in relation to authorised absences due to maternity. As a result of the Employment Appeal Tribunal decision the Department of Health are in the process of giving careful consideration to alterations to the underlying policies and have set up a wider review of how authorised absences from NHS-funded courses should be treated in terms of continuing NHS bursary payments. The NHS pension agency with the authority of the Department of Health will shortly be implementing interim arrangements to improve the way absences due to maternity are dealt with under the NHS bursary scheme. The interim arrangements will need to be reviewed when there has been a proper opportunity to assess them in practice." In relation to that last sentence, I comment that there is no reference in this document to the arrangements being dependent on the outcome of the present litigation. The document is undated but it appears to pre-date, and probably only shortly so, the document which I have cited in some detail. This morning, Mr Lynch has supplied us with a letter from the solicitor to the Department of Health to the claimants' solicitors dated 2 September 2005. It refers to a review of the NHS bursary scheme: "As you are aware from the discussions between the interested parties, we are in the process of conducting a review of the scheme with a view to introducing interim provisions which will provide for a period of authorised absence due to maternity before pilot interim arrangements. With effect from 1 June 2005 no bursary has been stopped in cases where students' authorised absence from her course has been due to her pregnancy. The pilot interim arrangements will be introduced in September 2005 but will be backdated to 1 June 2005. The provision of benefits under the scheme during the period of authorised absence due to maternity is far from straightforward. For example, difficulties may arise in reconciling a student's return date with the university term dates. In addition, our clients will need to consider carefully what qualifying provisions, if any, are appropriate. We are therefore introducing pilot interim arrangements on a trial basis in order properly to assess how those arrangements can be made to work in practice. A review of the scheme and the appeal are separate issues in the sense that [the appeal being the present appeal] regardless of the outcome of the appeal, our clients are committed to ensuring that the scheme makes express provision for a period of authorised maternity absence although that may not mirror precisely the statutory scheme that applies to workers. However, our clients [they are the Department for Work and Pensions as well as the Department of Health] will obviously wish to consider both the outcome of the pilot and the judgment of the Court of Appeal in this case before final arrangements are put in place." I note in particular the statement in that letter of a "commitment to ensuring that the scheme makes express provision for a period of authorised maternity absence". It is common ground that the scheme now in operation has been properly introduced by the Secretary of State pursuant to powers under section 63 of the National Health Service and Public Health Act 1968, particulars of which are set out in paragraph 29 and following of the tribunal decision of 9 February 2004. When the point was first raised yesterday afternoon, Miss Gill submitted that the court should not entertain the appeal and she has persisted in that view today. In the course of Mr Lynch's submissions yesterday, we were referred to the case of North Western Health Board v McKenna [2005] IRLR 895 ECJ. At paragraph 59 the court stated: "Next it is necessary to bear in mind that as community law stands at present no general provision or principle thereof requires that women should continue to receive full pay during maternity leave, provided that the amount of remuneration payable is not so low as to undermine the community law objective of protecting female workers, in particular before giving birth. See Gillespie & Ors paragraph 20." That principle is stated to apply to workers as defined in the legislation and it leaves open the question, submits Mr Lynch, of its application to vocational trainees. Mr Lynch now submits that the only issue before the court is the "but for" issue, that is, but for the pregnancy, the absence would not have arisen. He did, however, address us on other issues, notably the effect of Gillespie, already mentioned, for a good part of yesterday. Mr Lynch also refers to the existence of six other cases making similar claims. These have been stayed pending the outcome of these proceedings. The explanation for the present cases having been settled and the stayed cases not being settled appears in a letter from the appellant's solicitor dated 20 December 2005, in which an offer to the claimant was set out: "This offer is intended to provide compensation to your clients in circumstances where the litigation in which they have been directly involved and in which they have given evidence is now concerned with issues of principle which as a result of the decision of the EAT will need to be resolved by the Court of Appeal. The offer is designed to provide your client a certainty in that regardless of the outcome of the appeal, they will each recover the sum of £5,000. Our clients have considered carefully whether or not any payment should be made other in cases [that should be "in other cases "] which have been stayed pending the outcome of this case, and which were not directly before or dealt with either by the Employment Tribunal or the EAT. Our clients consider that the question of whether or not any compensation is due in any of those stayed cases should await the outcome of the appeal in the usual way." It is submitted, though more faintly than in the case of the first submission, that the appeal should proceed because of those stayed cases. We do not know, nor should we have been told, of the facts of those cases. Mr Lynch's best point in my view is in the difficulty of understanding, with respect, the reasoning of the EAT, whose decision runs to 109 pages and includes extensive reference to ECJ and domestic authority. We invited Miss Gill late yesterday to address us with a view to explaining the rationale of the decision. I confess that notwithstanding her submissions to date, I still find it very difficult to follow the reasoning of the EAT or to decide upon the basis for their decision. Mr Lynch seeks to reinstate the conclusion and decision of the Employment Tribunal and submits that there will be real and genuine difficulties in applying this decision of the EAT. I bear that submission in mind in considering whether the appeal should be permitted to proceed. Mr Lynch does not invite the court to consider the minutiae of a lawful scheme, such matters as whether the absence during which a bursary can be paid should be 41 weeks, for example, or 45 weeks, or precisely how much shall be paid. Mr Lynch's submission is that that Secretary of State's approach to the scheme and to future schemes may depend on the court's decision in this appeal. I cannot accept the validity of that argument, unless it is intended, which Mr Lynch says it is not, to use the legality of not having a scheme at all as a bargaining factor in defining the terms of the scheme. Once it is accepted that there should be a scheme, and the Secretary of State has committed himself to that, he will no doubt bear in mind that the maternity needs of women are the same whether they are workers or vocational trainees. The interim scheme is lawfully implemented under powers conferred and the Secretary of State is committed to ensuring the result cited in his letter. The scheme was introduced following consultation and, with respect, appears sensibly to address the needs which arise. The effect of the scheme is that absences due to maternity are treated under the scheme in a way different from absences for other reasons. That being so, a declaration that the Secretary of State need not have a scheme at all is, in my judgment, of no practical value. It is common ground that the court should not, at any rate in the absence of specific facts before it, direct the Secretary of State as to what precisely the contents of the scheme should be. We would not have been prepared to embark on such an exercise in any event. In my judgment, further costs and court time should not be taken up with the determination of the issue of principle said to be involved. I would exercise the court's discretion not to proceed with the appeal. I understand that my Lord, Scott Baker LJ will refer to authorities upon the exercise of that discretion. I would dismiss the appeal on that ground, making it clear that I am not thereby approving or expressing a view on the decision of the EAT or the reasoning by which it is reached. It is much to be hoped that the six stayed cases will be settled on the same basis as those the subject of these proceedings. Although the claimants had given evidence, and that is mentioned by the Secretary of State in making the distinction between the claimants and the stayed actions, they are in the same position as the present claimants and would understandably feel aggrieved if their claims were not to be treated on terms as favourable as those of the claimants. Otherwise, their cases may need to proceed to a remedies hearing before the Employment Tribunal on the basis of the EAT decision. For the reasons I have given I would dismiss this appeal. LORD JUSTICE SCOTT BAKER: I agree for the reasons give by my Lord, Lord Justice Pill, that the court should proceed no further in hearing this matter. As Lord Bridge said in Ainsbury v Millington [1987] 1 WLR 379 at 381: "It has always been a fundamental feature of our judicial system that the courts decide disputes between the parties before them. They do not pronounce on abstract questions of law when there is no dispute to be resolved." In The Queen v the Secretary of State for the Home Department [1993] 1 WLR 115 at 120, Lord Goff of Cheveley said it was well established that the House of Lords does not decide hypothetical questions. If it were to do so, he said, any conclusion and the accompanying reasons could, in their turn, constitute no more than obiter dicta expressed without the assistance of a concrete factual situation and would not constitute a binding precedent for the future. The Queen v the Secretary of the State for the Home Department ex parte Salem [1999] 1 App 450 was a case where it was submitted on appeal to the House of Lords that an appeal should continue to be heard, albeit there was no longer a live issue between the parties, because the case raised a question of public importance. Lord Slynn drew a distinction between cases involving disputes about private rights and issues involving public law. The strict principle in Ainsbury v Millington he said was limited to disputes concerned private rights. He said this at 457 at (a): "The discretion to hear disputes even in the area of public law must however be exercised with caution and appeals which are academic between the parties should not be heard unless there is a good reason in the public interest for doing so. As for example, but only by way of example, when a discrete point of statutory construction arises which does not involve detailed consideration of facts and where a large number of similar cases exist or are anticipated so that the issue will most likely need to be resolved in the near future." There may be a stronger argument for proceeding in a public law case, although even in those circumstances the court's undoubted discretion still has to be exercised sparingly. It was with some surprise that I learned yesterday afternoon, after the appeal had been in progress for some hours, that the respondents' claims had been settled. The court should have been told this before the appeal began so that it could then have heard argument and decided at that point whether, in the exercise of its discretion, it was appropriate for the appeal to proceed. I, too, have had difficulty in following all the reasoning in the very prolix judgment of the EAT. However, I have had the advantage of reading in draft what Hooper LJ proposes to say. I agree with it, and in particular with his analysis of the decision of the EAT and why it is now academic to proceed with an appeal. In my judgment, there is no good reason for exercising the court's residual discretion to continue to hear this appeal, notwithstanding the settlement that has occurred, and I too would dismiss the appeal. LORD JUSTICE HOOPER: I agree that we should not entertain this appeal. It is most unfortunate that the parties to this appeal cannot even agree as to what was the ratio of the decision of the Employment Appeal Tribunal ("EAT"). In my view the ratio of the decision of the EAT is to be found, albeit with difficulty, by examining paragraphs 76, 108 and 109 of the judgment. In paragraph 76 the EAT found that by treating absence from the course for reasons of maternity in exactly the same way as the appellants treated absence from the course for any other reason (leaving aside absence for sickness), the Bursary Scheme for Trainee Midwives and Nurses discriminated against the claimants in a way that was unlawful by virtue of section 14 of the Sex Discrimination Act 1975. In paragraph 108, the EAT decided that a non-discriminatory bursary scheme had to provide a "minimum adequate allowance" (whatever that may mean) for trainees absent from the course for reasons of maternity. In paragraph 109, the EAT remitted the case to the ET to decide what payment should have been made to the claimants and for how long. This shows, contrary to the submissions of Mr Lynch QC, that the EAT was not deciding that the claimants were entitled to payment of the full amount, which would have been paid under the bursary scheme during the whole period of their absence for reasons of maternity. In fact the remedies hearing never took place; something we discovered in the afternoon of the first day. The appellant settled the financial claims with the claimants, albeit without accepting liability. The ET was therefore spared the extremely difficult task which the EAT had required it to undertake. On the morning of the second day, we received a supplementary bundle which contained amongst other things a letter dated 2 September 2005 written on behalf of the Secretary of State. Pill LJ has cited passages from that letter. That letter is to be read with a document obtained from a Government website, which we were provided at the end of the first day. The first three paragraphs of that document have already been set out by Pill LJ. Also on the website was a document relating to one of the claimants, Clare Fletcher, the material parts of which have also been set out by my Lord. Both parties agree that this court could not, or should not, decide the questions which were remitted to the ET by the EAT, namely amount and duration. It follows that irrespective of the outcome of this appeal, the Secretary of State has altered the terms of the bursary scheme so that trainees absent from a course for reasons of maternity are treated differently from those absent for other reasons. It follows in my view that the appeal against the decision of the EAT, as I have analysed it, is academic or hypothetical on the authorities cited by Scott Baker LJ, and for these reasons the court should not entertain it. I would therefore also dismiss the appeal. Order: Appeal dismissed.

Lord Justice Laws: At the Chelmsford Crown Court on 28 August 2002 before His Honour Judge Pearson this appellant was convicted on the judge's direction of two offences of being in possession of an article with a blade or point contrary to s.139(1) of the Criminal Justice Act 1988. On 4 October 2002 he was conditionally discharged for a period of 12 months. He now appeals against conviction by leave of the single judge. The case is an unusual one. The appellant is a Chinese asylum seeker. On 27 February 2002 the police were called to a disturbance at Clacton Railway Station, where they came upon the appellant who was detaining another man. He was also holding a curved sword, which was, however, still in its sheath. The appellant said that the other man had stolen his bag. Inside the bag there was a knife, called a "willow leaf" knife, which was indistinguishable in shape from a Ghurkha kukri knife. The sword was to be the subject of count 1 in the indictment, and the knife that of count 2. The appellant was arrested and interviewed with the assistance of a Mandarin interpreter. He told the police that his bag had been stolen at the railway station, that he had located the thief and the bag on a train, and that the sword had been covered with clothes inside the bag, but the thief had been through the bag and uncovered it. He said that he was trying to detain the thief and at the same time hold on to the sword, to stop the thief getting hold of it when the police arrived. At no time was the sword out of its sheath. The appellant said that he always carried the sword with him and used it to practise martial arts at deserted places. He had bought the knife at a market because it looked antique. When he gave evidence before the jury the appellant did not dispute his possession of the two bladed items. He claimed to be a practitioner of the martial art of Shaolin, which involved or required practice with such weapons: indeed a Shaolin follower had to become expert in the use of 18 weapons. It was asserted on his behalf that his need to practise with the weapons constituted "good reason" for his being in possession of them, within the meaning of s.139(4) of the 1988 Act. (We shall set out the relevant statutory provisions in due course.) The appellant was moreover a Buddhist, and Shaolin was a branch of Buddhism; so that the appellant (it was contended) enjoyed a further defence, to both counts, arising under s.139(5)(b). The appellant told the jury that on the occasion in question he had been going to see his immigration solicitor in London; he did not think it safe to leave the two weapons at his home, so he had taken them with him. In light of the issue joined in the appeal it is important to be as clear as possible about what the appellant actually said in evidence relating to his practice with the weapons as a Shaolin follower. When he was interviewed by the police he said nothing about it at all. We do not have a transcript of his testimony before the jury. We felt able to proceed without it, however, having regard to the references to what he said which appear in a ruling made by the trial judge which, as we shall shortly explain, is the genesis of this appeal, and also because of the assistance given to us by Mr Shaw for the appellant who was trial counsel and was able to refer us to his note of his client's evidence. We describe these materials below. At the end of the defence case, on 28 August 2002, the judge sent the jury out and indicated to counsel that he could see no defence to either count arising on the appellant's evidence. After hearing argument the judge maintained his earlier view and directed the jury to convict on both counts, explaining that the matters raised by the appellant were no defence. The essence of the appeal to this court is that the judge was wrong to do so; the appellant was entitled to a verdict from the jury, and had they accepted his evidence or thought it might be true, then by force of 139(4) and/or (5)(b) he should have been acquitted. It is convenient at this stage to set out the relevant statutory provisions. S.139 of the Criminal Justice Act 1988 in part provides: "(1) Subject to subsections (4) and (5) below, any person who has an article which has a blade or is sharply pointed with him in a public place shall be guilty of an offence. … (4) It shall be a defence for a person charged with an offence under this section to prove that he had good reason or lawful authority for having the article with him in a public place. (5) Without prejudice to the generality of subsection (4) above, it shall be a defence for a person charged with an offence under this section to prove that he had the article with him… (b) for religious reasons." In view of the course taken by the judge it is perhaps little surprise, and it is certainly no criticism, that much energy and paper has been expended on the appellant's behalf in marshalling argument and learning in order to demonstrate that the power of a trial judge to direct a jury to convict is, on constitutional grounds, very severely circumscribed. Reference has been made to authority such as Gent 89 CAR 247, Hill & Hall 89 CAR 74, Stonehouse [1978] AC 55 and Wright [1992] Crim LR 596. There is no doubt but that such a power is much constrained. In her skeleton argument for the Crown, however, Miss Davey, who appeared in the Crown Court, submits that it is necessary to distinguish between two classes of case: (1) where it is said that on the evidence an issue as respects which the burden of proof lies on the prosecution could only rationally be decided against the defendant, and (2) where it is said that the defendant has failed to discharge an evidential burden which lies on him. Miss Davey submits, in our judgment correctly, that the decision of this court in Gent shows that if it is ever permissible for the judge to direct the jury to convict in the first class of case, it would only arise in exceptional circumstances, and may be confined to the situation in which there had been something like a formal admission of guilt. However a different approach has been taken in the second type of case. In Hill & Hall the judge directed the jury to convict the defendants of possession of an article with intent to damage property (contrary to s.3 of the Criminal Damage Act 1971) because the defendants had failed to discharge an evidential burden which lay on them in relation to the defence of reasonable excuse. The convictions which followed were upheld in this court. Bown [2003] EWCA Crim 1989 was a case, like the present, in which the appellant was prosecuted for an offence under s.139(1) of the Criminal Justice Act 1988. He had been found in possession of a lock knife. His defence was good reason under s.139(4). His "good reason" was that he had the knife on him to satisfy his propensity to harm himself. He did not give evidence at his trial. The Recorder ruled that it was for him to determine whether the reason advanced was capable of amounting to a good reason within s.139(4), and held that in this case it did not. Accordingly he directed the jury to convict. Keene LJ, delivering the judgment of this court, stated: "16. … there are some limits as a matter of law as to what can amount to a good reason under s.139(4). It is for the judge to determine as a matter of law whether the explanation is capable of being seen by a jury as a good reason. If it is, then it is indeed for the jury to decide whether in fact in all the circumstances it did amount to a good reason. … 17. … As a matter of approach… to his role as compared to the jury's role, the Recorder in the present case in our judgment did not err… Keene LJ proceeded to emphasise (paragraph 18) that the trial judge "should be slow to rule that the particular facts cannot as a matter of law fall within the scope of a 'good reason'. The words are very general in nature." He went on to consider whether on the facts the Recorder was right to rule that the defence put forward was incapable of amounting to good reason; but at length the court concluded (paragraph 25) that it was in the event unnecessary to decide whether self harm might amount to a good reason, because it considered (paragraph 26) that "the crucial factor [was] the absence of evidence from the defendant… There was simply insufficient evidence to establish the defence to the degree of particularity which was requisite." And so the appeal was dismissed. Here, of course, the appellant did give evidence. Following Bown (and in line with Hill & Hall) the judge was entitled to consider whether the appellant's account, if it were accepted, disclosed material which was capable of being accepted by the jury as showing that he had the sword and knife with him for religious reasons (or for good reason). The question for this court is whether he was right to hold that it did not. While we accept that we should be very slow to rule that particular facts, which raise at least some issue as to religious motivation, are in law incapable of furnishing a defence under s.139(5)(b), there are some features of the statutory provision which should in our judgment be clearly stated. Mr Abell, who was instructed to conduct this appeal for the Crown submitted that s.139)(5)(b) should be narrowly construed. We would not necessarily adopt that language, since in our view the two considerations which we are about to emphasise involve no tension with the ordinary meaning of the words the legislature has used. They are as follows. First, the religious reason (or reasons) proffered, assuming it can reasonably be regarded as a religious reason, must in our judgment constitute at least the predominant, if not the only, motivation for the accused's being in possession of the bladed instrument in a public place, if the s.139(5) defence is to be made out. Secondly, (and in truth this flows from the first consideration) it must be shown that the religious reason specifically motivated the accused to have the article with him on the particular occasion in question. As Keene LJ said in Bown: "25. … [I]t cannot… be a good reason in our judgment to have a knife with you in public one evening because you may want to self-harm at some time the next week." We consider that these limiting factors are necessary to preserve the force of the offence created by s.139, whose efficacy is very greatly in the public interest. We turn then to consider whether on the material before him the judge was right to direct the jury that the appellant's account was not in law capable of furnishing a defence under s.139(5)(b). What was the appellant's evidence as to the purpose for which he had the weapons in his possession, undoubtedly in a public place, on his trip to see the solicitor? As we have indicated, Mr Shaw referred us to his note of his client's evidence. He told us that the appellant made it plain that he was on his way to London intending to practise with the weapons after he had seen his solicitor. But counsel's note did not go so far. We do not of course suggest that Mr Shaw was seeking to put his case too high before us; but this is what he had recorded: "I was going with my friend to see the Home Office lawyer in Romford. I always went with the bag and stopped at remote and uninhabited places to practise my Shaolin." The transcript of the hearing before the judge on 28August 2002 contains these following passages. First, there is Mr Shaw's submission at 4C – D: "The defendant's evidence is plain; that Shaolin and Buddhism are inextricably linked, that members help society to protect people, to behave and keep the spirit. It teaches love without denominations or limitations. The basic belief of the Buddhist people teaching Shaolin, he said." Then the judge said this at 5A – C: "… what this defendant has said is simply this: that whilst Shaolin may be a part of Buddhism and certainly it can have beneficial effects in terms of protecting people and loving all people, nevertheless the martial arts themselves and the weapons in connection therewith are not important to the faith as such. It is the personality and the faith itself which are crucial." Then at 5E – F: "It seems to me that to say that he carries them in a bag – and what we are interested in is why did he have them in a public place, namely Clacton Railway Station, on the 27th? Put quite simply, to say that he had nowhere else to put them and he might want to practise with them cannot amount, in my judgment, to a defence of law." 8E – F (now addressing the jury, who had returned to court): "What this defendant has told you, put quite simply, is that he is a Buddhist; that he is a follower of traditional Chinese martial arts, called Shaolin; that Shaolin himself was a Buddhist and that Shaolin has become part of, as it were, the Buddhist religion, but it is clearly an adjunct and not central to Buddhism because he said himself: 'Martial arts themselves are not important. What is important is the personality and the faith.'" Lastly 9B – D (again to the jury): "On the 27th, he was going to London to see a solicitor. What possible reason could one have for having those two blades for that purpose? The reason he gives is simply this: 'There was no-one at home to look after the knives. The bag was the best place for them. I wanted to practise with them', and you will recall his evidence about wanting to become the leading figure in martial arts and, perhaps, even to become a film star." After careful consideration we have come to the conclusion that on this material the judge was justified in directing the jury to convict. The appellant's evidence was not capable of discharging the burden, which lay on him, of showing that he had the weapons with him for good reason (s.139(4) or for religious reasons (s.139(5)(b)). It is very far from clear that he had any settled intention to practise with them on the day in question; even if he did, there was on his own evidence no religious requirement that he do so, and in any event that was plainly not the predominant or only reason for his possessing them that day; the fact that "there was no one at home to look after [them]" cannot, in our judgment, be a good reason for taking these weapons into public places. To borrow the words of Keene LJ in Bown: "[t]here was simply insufficient evidence to establish the defence to the degree of particularity which was requisite". The facts here are unusual. Nothing we have said is intended to encourage trial judges to direct convictions, even where the material issue is one on which the defendant carries the burden, unless it is plain beyond sensible argument that the material before the jury could not in law suffice to discharge the burden. There was some discussion at the Bar as to the impact of Article 9 of the European Convention on Human Rights. Assuming, without deciding, that Article 9 might require the State authorities to allow persons to carry bladed instruments in public in pursuit of their religious beliefs (at least in some circumstances), such a right is guaranteed by s.139(5)(b) itself; there is no need for the subvention of Strasbourg authority.

OPINION OF ADVOCATE GENERAL LENZ delivered on 6 May 1993 ( *1 ) Mr President, Members of the Court, A — Introduction 1. The case before you concerns the interpretation of Articles 4 and 68 of Council Regulation (EEC) No 1408/71 ( ) and Article 7 of Council Regulation (EEC) No 1612/68. ( ) 2. The applicant in the main proceedings, Mr Acciardi, is an Italian national who was employed in the Netherlands and is resident there. His wife and son live in Italy. In 1985 he became unemployed and received benefits under the Werkloosheidswet, the Netherlands Law on Public Unemployment Benefits, for the maximum period allowed thereunder. 3. In February 1988 he was granted benefits under the Wet inkomensvoorziening oudere en gedeeltelijk arbeidsongeschikte werkloze werknemers, the Netherlands Law on the Provision of Income for Unemployed Workers who are Elderly or suffering from Partial Incapacity to Work (‘the IOAW’). ( ) Under Article 4(1) of the IO AW entitlement to benefit under that law is subject to the condition that the monthly income of the person concerned and, where applicable, that of his spouse is below the basic amounts laid down in the law. Under Article 4(3), for an unemployed worker and his spouse, half each of the net basic amount is equal to half of the net minimum wage. For a single unemployed worker with a child the net basic amount equals 90% of the net minimum wage, while for an unemployed worker without children it is 70% of the net minimum wage. 4. The benefit payable is calculated in principle by deducting the recipient's income from the relevant basic amount (Article 9(1) of the IO AW). Under Article 26(1) of the IOAW the benefit is granted only if the person concerned meets certain conditions aimed at his reintegration in working life (such as the obligation to seek work), unless this is impossible on health grounds or for other reasons. The same conditions apply in principle to the spouse of the person concerned (Article 26(2) of the IOAW). 5. Under Article 4(2) of the IOAW the unemployed worker and his spouse have equal rights to the benefit in question. On application by one or both of the spouses, each is paid half of the benefit. 6. Article 5 of the IOAW lays down that an unemployed worker living outside the Netherlands has no claim to the benefit in question. If only the spouse lives abroad, she has no claim to benefit; in that case the unemployed worker will be treated as though he were single (Article 5(2) of the IOAW). 7. The application of the abovementioned provision by the competent Netherlands authorities had the consequence that Mr Acciardi was deemed to be a single person without children. ( ) He referred this decision to the courts. The Raad van State, which has to deliver judgment in the dispute, submitted the following questions to the Court for a preliminary ruling: ‘1. Must Article 4(1) of Regulation (EEC) No 1408/71, which provides that that regulation applies to certain branches of social security, be interpreted as meaning that a scheme such as that contained in the IOAW, which has characteristics both of social security and of social assistance, falls within the scope of that regulation? 2. If so, must Article 68(2) of Regulation (EEC) No 1408/71 be interpreted as preventing a Member State from maintaining a legislative provision under which the benefit of a Community national residing in the Netherlands who is to be regarded as being an unemployed worker for the purposes of the IOAW and whose spouse lives in another Member State or resides there other than on a temporary basis, is determined without taking the spouse into account? 3. If the reply to the first question is in the negative, does the prohibition of discrimination on grounds of nationality laid down in Community law preclude the application of a legislative provision under which the benefit of a Community national residing in the Netherlands who is to be regarded as being an unemployed worker for the purposes of the IOAW and whose spouse lives in another Member State or resides there other than on a temporary basis, is determined without taking the spouse into account?’ B — Analysis I — Scope of Regulation No 1408/71 8. In its first question, the national court seeks in essence to ascertain whether a scheme such as that of the IOAW falls within the scope of Regulation No 1408/71. 9. Pursuant to Article 4(1 )(g) of Regulation No 1408/71, the regulation applies to all legislation concerning the branch of social security relating to ‘unemployment benefits’. Article 4(4) of the regulation provides that it shall not apply to social assistance. 10. The Netherlands Government considers that IOAW benefits should be classified as social assistance, since the IOAW belongs to a group of laws designed to guarantee recipients a minimum means of subsistence. According to the Commission, ( ) already when the law was being debated in Parliament the Netherlands Government expressed the view that it was a social assistance law that did not fall within the scope of Regulation No 1408/71. 11. As the Court has consistently held, the reply to the question whether a benefit falls within the scope of Regulation No 1408/71 ‘essentially depends on the fundamental characteristics of the benefit, in particular its purpose and the conditions for its grant, and not on whether or not the national legislation describes the benefit as a social security benefit’. ( ) 12. It is not difficult to see that the IOAW benefit has certain features usually characteristic of a social assistance benefit. As the Netherlands Government indicated in its observations, the net basic amounts granted under the IOAW correspond to the amounts provided for by the Algemene Bijstandswet (the General Law on Social Assistance, ‘the ABW’). In both cases the maximum net basic amount is equal to the net minimum wage (for a married couple). Both laws are therefore intended to provide recipients with a specific sum sufficient to cover their basic needs. For that reason the other income of the person concerned (and, where applicable, that of his spouse) is taken into consideration when calculating the benefit. 13. The fact that a benefit has certain features resembling social assistance does not, however, necessarily lead to the conclusion that Regulation No 1408/71 does not apply to it. The Court has held on several occasions that ‘whilst it may seem desirable from the point of view of applying Community regulations on social security to establish a clear distinction between legislative schemes that fall respectively within social security and assistance, the possibility cannot be excluded that by reason of the persons covered, its objectives and its methods of application, national legislation may, at one and the same time, have links to both those categories’. ( ) 14. According to the case-law of the Court, a benefit is a social security benefit within the meaning of Regulation No 1408/71 if it is awarded on the basis of legally defined conditions and irrespective of any individual assessment of the needs of the person concerned that would give the authorities scope for the exercise of discretion. Moreover, the benefit must relate to one of the risks listed in Article 4(1) of Regulation No 1408/71. In its recent judgment in Commission ν Luxembourg the Court summarized this case-law as follows: ‘ The Court has often stated that a benefit may be regarded as a social security benefit in so far as it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position and provided that it concerns one of the risks expressly listed in Article 4(1) of Regulation No 1408/71.’ ( ) 15. It is obvious that the IO AW confers upon claimants a ‘legally defined position’. ( ) If the conditions laid down in the law arc met, the claimant is entitled to benefit. The competent authorities may have a certain scope for assessment when examining whether these conditions, and especially those of Article 26 of the IOAW, are met. This does not, however, mean that the grant of the benefit is within the discretion of the authorities. In my opinion, no particular importance can be attached to this circumstance. In the oral procedure the representative of the Netherlands Government rightly pointed out that in an advanced welfare state it is not unusual for recipients of social assistance to have a legal right to it. ( ) 16. What this criterion means is, in my opinion, much clearer from the judgment of the Court in the Scrivner case, ( ) which related to the scheme for a guaranteed minimum means of subsistence under Belgian law. The Court found that there was entitlement to this benefit and that it was granted to any person who did not have adequate means and was unable to obtain them in any other way. It concluded that: ‘it thus adopts need as an essential criterion for its application and does not make any stipulation as to periods of work, contribution or affiliation to any particular social security body covering a specific risk’. ( ) The Court therefore ruled that the benefit in question did not fall within the scope of Regulation No 1408/71. Further light is shed by the judgment in the Pisciello case, ( ) where the Court ruled that a benefit such as the social aid pension provided for under Italian law was to be regarded as a social security benefit. It based its decision primarily on the fact that the relevant law made no provision for ‘individual assessment, which is a feature of social assistance’. ( ) 17. If these criteria are applied to the present case, it will be found that the Netherlands measure does not provide for the circumstances of the individual case to be examined. The conditions for the payment of benefit are listed exhaustively in the law and, as already mentioned, the authorities have no discretion whatever in this regard. 18. As to the question of the relevance of need, it is necessary to look at the way in which the personal circumstances of beneficiaries are taken into consideration in the grant of IOAW benefits. As already mentioned, the Netherlands Government relies particularly on the parallels between the IOAW and the ABW to support its contention that the IOAW is outside the ambit of Regulation No 1408/71. According to its observations, benefits on the basis of this general social assistance law are paid only if the person concerned is unable to support himself out of his own resources. Consequently, his other assets as well as his income are taken into consideration when assessing need. By contrast, the payment of benefits under the IOAW depends solely on whether the income of the person concerned (and, where applicable, that of his spouse) exceeds a particular amount. ( ) This means that a person with little or no income may obtain benefits under the IOAW even if he has substantial assets (such as valuable building land). Although no statutory limit has been placed on the generosity of Member States in this regard, I seriously doubt whether such a benefit could be classified as ‘social assistance’. It is also necessary to refer to Article 9(4) and (5) of the IOAW. If the person concerned previously drew benefits under the Werkloosheidswet and those benefits (including any supplements) were less than the IOAW benefits, the latter are reduced accordingly on the basis of these provisions. This shows quite clearly that the IOAW does not hinge primarily on the need of the person concerned, which obviously does not depend on the income he had before he claimed benefits under the IOAW. 19. The latter circumstance shows instead that the purpose of the IOAW, at least as regards the elderly unemployed persons for whom it caters, is to ensure that, even after the expiry of the maximum period for benefits under the general law on unemployment benefits, these persons receive corresponding benefits or at least a minimum means of subsistence and are not obliged to rely on the general social assistance scheme. It is therefore, in my opinion, a scheme which is clearly related to the risk of unemployment mentioned in Article 4(1) of Regulation No 1408/71. This close connection is reinforced by Article 26 et seq. of the IOAW, which aim to promote the reintegration of the persons concerned into working life. Finally, it should be noted that assistance is granted only if the beneficiary is less than 65 years of age (that is, has not reached pensionable age). The Netherlands Government's objection that benefit under the IOAW does not depend on the fact of being unemployed but on the continuance of unemployment is not persuasive. Every unemployment benefit is paid only so long as the person concerned is unemployed. Indeed, this argument confirms the close relationship between benefits under the IOAW and the unemployed status of the beneficiary. 20. The argument of the Netherlands Government that IOAW benefits are non-contributory can be dealt with briefly. Article 4(2) of Regulation No 1408/71 provides that the regulation applies to both contributory and non-contributory social security schemes. The Court has confirmed this on a number of occasions. ( ) 21. The fact that the IOAW is not specified in the declarations notified by the Netherlands in accordance with Article 5 of Regulation No 1408/71 does not alter the fact that, for the reasons already discussed, the IOAW falls within the scope of the regulation. Laws specified in such a declaration are automatically covered by Regulation No 1408/71. ( ) However, as the Court has ruled, national legislation may lie within the scope of the regulation even if it is not mentioned in the declaration made by a Member State. ( ) 22. The reply to the first question should therefore be that a scheme such as that laid down by the IOAW falls within the scope of Regulation No 1408/71. II — Applicability of Article 68(2) 23. As the IOAW falls within the scope of Regulation No 1408/71 because it relates to unemployment, the provisions of the regulation concerning unemployment (Article 67 et seq.) apply to the IOAW. The first sentence of Article 68(2) of the regulation contains the following provision on the calculation of benefits: ‘The competent institution of a Member State whose legislation provides that the amount of benefits varies with the number of members of the family, shall take into account also members of the family of the person concerned who are residing in the territory of another Member State, as though they were residing in the territory of the competent State.’ It should be noted that, under Article 1(f) of the Regulation No 1408/71, ‘members of the family’ means persons recognized as such by the national legislation (in this case the IO AW). However, if the said legislation regards a person as a family member only if that person lives under the same roof as the worker, this condition is deemed to be fulfilled if the person in question is mainly dependent on the worker. Whether these conditions are satisfied is a matter for the national court but they do appear to be met in the present case. The following remarks are therefore based on the assumption that Mr Acciardi's wife is a family member within the meaning of Article 68(2). 24. The Commission has rightly pointed out that at first sight it may appear doubtful whether the first sentence of Article 68(2) applies to the present case. It manifestly relates to national provisions under which the benefit payable to the recipient is increased if he has to provide for members of his family. However, in the case of a married unemployed worker it will be seen that, under the IOAW, the recipient's benefits are not increased, but the spouse herself becomes entitled. I agree with the Commission that these special features do not preclude the application of the first sentence of Article 68(2). Firstly, it must be observed that for an unmarried claimant the level of benefit under the IOAW undoubtedly depends on the number of members of the family: for a childless worker the net basic amount is 70% of the net minimum wage, but for a worker with a child it is 90%. ( ) The same applies to married claimants. The law gives the spouse of an unemployed worker her own entitlement to half of the benefit payable (Article 4(2) of the IOAW). As the Commission has stated in its written observations, the spouse still has no independent right, but a derived right. It is clear from Article 5(2) of the IOAW that the spouse has a right only if the unemployed worker is entitled to draw benefit under the IOAW. The spouse's entitlement therefore stands or falls with the entitlement of the unemployed worker. Bearing this dependent relationship in mind, it follows that an unmarried worker can expect a maximum net basic amount of 90% of the net minimum wage, whereas the corresponding amount for a married claimant, together with his spouse, is 100%. The level of benefits under the IOAW therefore depends on the number of members of the family within the meaning of the first sentence of Article 68(2). 25. The reply to the second question should therefore be that, in relation to the grant of benefits under a law such as the IOAW, the first sentence of Article 68(2) of Regulation No 1408/71 must be interpreted as meaning that it precludes a provision whereby the calculation of benefits does not take account of a spouse living in another Member State. 26. During the oral procedure the representative of the Netherlands Government claimed that the Netherlands would face serious financial consequences if spouses living abroad had to be taken into consideration in awarding benefits under the IOAW. Although it would certainly not be acceptable to make the interpretation of Community law conditional on the economic consequences which might ensue from such interpretation, I consider this objection worthy of closer examination. Firstly, in response to a question from the Court, the representative of the Netherlands Government was unable to quantify even approximately the consequences he feared. Secondly, the classification of benefits under the IOAW as social security benefits is based on the settled, consistent case-law of the Court, which must also have been known to the Netherlands legislature. Above all, however, it is difficult to see what the adverse repercussions of any such interpretation might actually be. As I remarked in the oral procedure, Mrs Acciardi would undoubtedly have the right to move to the Netherlands to live with her husband. If she exercised that right, the full amount of the benefit claimed by Mr Acciardi in the main proceedings would unquestionably have to be paid. 27. More important, in my view, is the question whether this interpretation can be reconciled with the special conditions laid down by the IOAW for the grant of benefits. As wc have seen, Article 26 of the IOAW in principle requires the recipient and his spouse to seek employment. It is clear that Mrs Acciardi is unlikely to be able to fulfil in the Netherlands the obligations placed upon her by this provision. In its written observations the Commission stated that these difficulties could be resolved by applying the principles developed in the Bronzino ( ) and Gatto ( ) cases, which revolved around the question whether a migrant worker living in Germany was entitled to child allowance for unemployed children aged between 16 and 20 years even if they lived abroad. The German Government claimed that the provisions of German law restricting the payment of benefit to children living in Germany was objectively justified. The German authorities are able to arrange training or jobs only if the young person is registered with the careers advisory service or employment office in Germany. If it were seen that the German authorities had to pay child allowance in such cases, the employment agencies in other Member States would have no particular reason rapidly to find work for the person concerned ahead of others. ( ) The Court ruled that it was sufficient if the child was registered with the employment office of the Member State in which he resided. ( ) It rejected the German Government's argument that this made it impossible for the German authorities to relieve themselves of the obligation to pay benefits by offering employment to the child. It nevertheless remarked that this argument ‘may be relevant with regard to unemployment benefits’. ( ) I share the Commission's view that in the present case it is sufficient for Mrs Acciardi to register with the employment services in Italy. The slight reservations which might arise in this connection from the passage in the Bronzino judgment I have just quoted would not be appropriate in the present case for the following reasons. Firstly, if a spouse living abroad is taken into account, this means that the spouse's income will also be taken into account when calculating the benefits under the IOAW. It is quite possible that this method of calculation will be less advantageous to the unemployed worker living in the Netherlands than the method currently applied. ( ) Moreover, the conditions stated in Article 26(1) for the unemployed worker apply only to a very limited extent. According to Article 26(2) of the IOAW, the spouse has the obligations listed in the first paragraph only if his or her reintegration into working life can ‘reasonably’ be expected on the basis of a recent employment record; if the spouse's last employed activity dates back more than two years, these obligations do not apply. By contrast with the situation in the Bronzino and Gatto cases, in the present case there are ways in which the Netherlands authorities can relieve themselves of the obligation to pay benefits other than by offering employment to the spouse: as we have seen, it is sufficient if the unemployed worker himself is found a job with an adequate income. III — Violation of prohibition of discrimination 28. The third question relates to the possible violation of the prohibition of discrimination on grounds of nationality. As the Court has found, the general principle of equal treatment in Article 7 of the EEC Treaty was applied specifically, with regard to freedom of movement for workers within the Community, in Article 48 of the EEC Treaty. This provision was in turn implemented by Regulation No 1612/68, which provides in Article 7(2) that in the host State a worker who is a national of another Member State must enjoy the same social and tax advantages as national workers. ( ) The question from the national court therefore seeks an interpretation of Article 7(2) of that regulation. 29. As the national court raised this question only in the event of a negative reply to the first question, in the light of the opinion I have expressed there is no need to examine this question. In case the Court should take a different view, I shall examine the issues raised by this question below in the alternative. A reply to the third question would be required not only in the event of a negative reply to the first question (that is, if the benefits under the IOAW were to be classified as social assistance benefits). As counsel for Mr Acciardi has stated, an answer to this question would also be useful if the reply to the first question were in the affirmative, as I have proposed, but the second question were answered in the negative. As regards this eventuality (which I shall not consider further), it may be observed that it is quite possible for a benefit to fall within the scope of both Regulation No 1408/71 and Regulation No 1612/68. ( ) 30. Pursuant to Article 7(2) of Regulation No 1612/68, a worker from another Member State is entitled to the same ‘social and tax advantages’ as national workers in the Member State in which he resides. The Court has consistently held that this phrase covers all advantages ‘which, whether or not linked to a contract of employment, are generally granted to national workers primarily because of their objective status as workers or by virtue of the mere fact of their residence on the national territory and whose extension to workers who are nationals of other Member States therefore seems likely to facilitate the mobility of such workers within the Community’. ( ) This definition is so broad that it may even cover social assistance benefits. ( ) 31. In the present case this question need not be examined further, as the Netherlands Government itself has stated that the IOAW benefits are to be regarded as advantages within the meaning of Article 7(2) of Regulation No 1612/68. The representative of the Netherlands Government endeavoured to qualify this statement towards the end of the oral procedure in a rather remarkable way by pointing out that Mr Acciardi may possibly not (now) be a ‘worker’ within the meaning of this provision. Even if this argument were accepted, the result would be the same because there can be no doubt that the fact of his unemployment cannot alter his status as a worker within the meaning of the law. 32. According to the wording of the law, the Netherlands scheme does not contemplate the nationality of the persons concerned. An unemployed worker of Netherlands nationality not living in the Netherlands is therefore not entitled to draw benefits under the IOAW, even if he meets all the other conditions. If both the unemployed worker and his spouse have Netherlands nationality, he is also treated as a single person if his spouse lives abroad. Claimants who are Netherlands nationals and those from other Member States are therefore treated in the same manner. 33. According to the case-law of the Court, the rules on equal treatment prohibit ‘not only manifest discrimination based on nationality, but also all concealed forms of discrimination which, by the application of other criteria of differentiation, achieve in fact the same result’. ( ) As the problem of family members living outside the Netherlands is likely to arise primarily for migrant workers, ( ) it could be argued that the IOAW scheme leads to concealed discrimination against workers from other Member States. 34. I am, however, of the opinion that such a conclusion would not be appropriate in the present case, as the link between the IOAW and the place of residence appears to be objectively justified. If the benefits under the IOAW are social assistance benefits, ( ) it is correct that they should serve to support persons living in the State in question. The Netherlands Government has rightly pointed out that social assistance schemes are typically conditional on the person concerned having his place of residence (or abode) in the country. Under Article 10 of Regulation No 1612/68 the spouse and certain other members of the family of the worker concerned have the right to live with him. If they exercise that right, the full benefits under the IOAW accrue to the person concerned. If they do not, it does not seem unfair to require them to seek any necessary support from the State in which they live. 35. This conclusion is, in my opinion, supported by the case-law of the Court. The Hoeckx case, for example, related to a benefit which did not fall within the scope of Regulation No 1408/71; the benefit was granted under the Belgian rules to nationals of other Member States only if they had lived in Belgium for at least five years. The Court ruled on the basis of Article 7(2) of Regulation No 1612/68 that the grant of such a social advantage may not be made subject to the requirement that the claimant ‘should have actually resided within the territory of a Member State for a prescribed period where that requirement is not imposed on nationals of that Member State’. ( ) The Bernini case concerned the question whether the Netherlands was obliged to grant benefits to an Italian national studying in Italy. Under Netherlands law only Netherlands nationals and (in certain circumstances) foreign students with their residence in the Netherlands could claim assistance. In this case too, the Court focused on the fact that the residence requirement did not apply to nationals of the Member State in question (the Netherlands). ( ) 36. The Frascogna judgment ( ) also confirms the conclusion that the grant of benefits within the meaning of Article 7(2) of Regulation No 1612/68 may be made subject to the requirement that the person concerned resides in the State granting the benefits. That case concerned the question whether an Italian national was entitled to a particular old-age benefit provided under French law. The claimant lived in France with her son, who was employed there. Under French law the benefit was granted to French nationals. Foreigners were entitled only if they came from a State which had a reciprocal agreement with France or if they had lived in France for at least 15 years. In either case the person in question had to be resident in France. The Court ruled on the basis of Article 7(2) that ‘any discrimination against the relatives in the ascending line of a worker from another Member State where those relatives have exercised the right conferred upon them under Article 10 of Regulation No 1612/68 to install themselves with the worker’ is prohibited. ( ) 37. In Case 111/91 Commission v Luxembourg ( ) Advocate General Jacobs took the view that Luxembourg was entitled to make the grant of childbirth benefit subject to the condition that the mother was resident in Luxembourg at the time of the birth. ( ) 38. During the oral procedure in the present case, by contrast, the Commission argued that Mr Acciardi's claim could also be based on Article 7(2) of Regulation No 1612/68. In support of this view it referred to a proposal to amend this regulation, which it had submitted in 1990. ( ) This draft provides for the addition of the following paragraph 5 to Article 7 of the regulation: ‘A Member State whose laws, regulations or administrative provisions attribute legal effects or make social or tax advantages subject to the occurrence of certain facts or events shall, where necessary, take into account the said facts or events which occurred in any other Member State as if they had occurred on the national territory.’ It appears to me that this proposal, which has not yet been taken up by the legislature, is irrelevant for the resolution of the present case. The Commission's view would remove the present differences in this respect between Regulations Nos 1408/71 and 1612/68. ( ) 39. The reply to the third question should therefore be that a scheme such as that operated under the IOAW does not constitute discrimination within the meaning of Regulation No 1612/68. C — Conclusion 40. I therefore propose that the Court should reply as follows to the questions raised by the Raad van State: (1) A scheme such as that laid down by the Wet inkomensvoorziening oudere en gedeeltelijk arbeidsongeschikte werkloze werknemers (IOAW) falls within the scope of Regulation (EEC) No 1408/71. (2) In relation to the grant of benefits under a law such as the IOAW, the first sentence of Article 68(2) of Regulation (EEC) No 1408/71 must be interpreted as meaning that it prohibits a provision under which a spouse living in another Member State is not taken into consideration in calculating the amount of benefit. ( *1 ) Original language: German. ( ) Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as consolidated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6) and last amended by Council Regulation (EEC) No 1249/92 of 30 April 1992 (OJ 1992 L 136, p. 28). ( ) Council Regulation (EEC) No 1612/68 of 15 October 1968 on freedom of movement for workers within the Community (OJ, English Special Edition 1968 (II), p. 475). ( ) By way of clarification, it should be noted that the benefits under this law arc paid to two categories of persons: elderly unemployed persons on the one hand and unemployed persons suffering from partial incapacity to work on the other. ( ) As the representative of the Netherlands Government explained during the oral procedure, classification of the applicant as a worker without children is based on Arti cle 3(7) of the IOAW. Under that provision a child belonging to the household of a third person is not deemed to be a ‘chdd’ for the purposes of the IOAW. During the hearing, counsel for Mr Acciardi stated that in the main proceedings Mr Acciardi had claimed in the alternative that he should at least be classified as a worker with a child. It is beyond dis pute that the questions submitted do not address this issue, so that the Court is not required to rule thereon. However, the following observations on the questions from the national court are also relevant to the question of whether the applicant's son should be taken into account ( ) See paragraph 17 in the written observations of the Commission of 9 June 1992. ( ) Case C-45/90 Paletta [1992] ECR I-3423, paragraph 16. See also the recent judgment in Case C-111/91 Commission v Luxembourg [1993] ECR I-817, paragraph 28. ( ) Case C-356/89 Newton [1991] ECR I-3017, paragraph 12. Sec also Case 187/73 Callemeyn [1974] ECR 553, paragraph 6, and Case 39/74 Costa [1974] ECR 1251, paragraph 6. ( ) Ose C 111/91, tiled in footnote 6. paragraph 29, and Case C-78/91 Hughes [1992] ECR I-4839, paragraph 15. ( ) The phrase used in the Callemeyn judgment, cited in foot note 7, at paragraph 7. ( ) In Germany, for example, there is a legally enforceable right to social assistance ( ) Case 122/84 [1985] ECR 1027. ( ) Scrivner, paragraph 20. ( ) Case 139/82 [1983] ECR 1427. ( ) Piscitello, paragraph 11. ( ) The IOAW also contains more favourable provisions than the ABW with regard to the taking of income into consideration (cf. Article 8 of the IOAW). ( ) Sec lor example Joined Cases 379/85 lo 381/85 and 93/86 Giletti 1987; LCR 955. paragraph 7 ( ) Case 15/77 Beerens [1977] LCR 2249. paragraphs 9 and 10. ( ) Case 70/80 Vigivr [1981] LCR 229, paragraph 15. ( ) Sec paragraph 3 above. ( ) Case C-228/88 [1990] LCR I 531. ( ) Case C-12/89 [1990] LCR I-557 (summary publication) ( ) See the Report (or the Hearing in the Bronzino case. [1990] LCR I 537 ( ) Bronzino, cited in footnote 23, paragraph 12. ( ) Bronzino, paragraph 14. The Bronzino and Gatto cases concerned the interpretation of Article 73 of Regulation No 1408/71, which relates to ‘family benefits’. ( ) If the spouse has a sufficiently high income, the unemployed worker may lose his entitlement entirely. 26 — See Case 316/85 Lebon [1987] ECR 2811, paragraph 10. ( ) See Case 316/85 Lebon [1987] ECR2811, paragraph 10. ( ) See Case C 111/93, cited in footnote 6, paragraph 21, and the Opinion of Advocate General Jacobs delivered in that case on 16 December 1992 (particularly paragraphs 32 and 34). See also my Opinion delivered on 12 January 1993 in Case C-310/91 Schmid [1993] ECR I-3011, point 54 el seq. ( ) See for example Case 249/83 Hoeckx [1985] ECR 973, paragraph 20. ( ) See Cases 122/84 and 249/83, cited in footnotes 11 and 28 respectively, which related to a benefit designed to ensure generally a minimum means of subsistence. ( ) Case 152/73 Sotgiu [1974] ECR 153, paragraph 11. See also for example Case 175/88 Biehl [1990] ECR I-1779, paragraph 13, and Case 111/91, cited in footnote 6, paragraph 9. ( ) See Case 41/84 Pinna (I) [1986] ECR 1, paragraph 24. ( ) I would remind the Court that, in the context of the discussion of the third question in the alternative, I am assuming this to be the case. ( ) Case 249/83, cited in footnote 28, paragraph 25 (emphasis added). ( ) Case C-3/90 Bemini [1992] LCR I-1371. paragraph 28. ( ) Case 137/84 Frascogna [1985] LCR 1739. ( ) Frascogna, paragraph 23 (emphasis added), It is worth not ing that in this case likewise the Court did not object to the residence criterion as such. It emphasized rather that ‘the grant of such a social advantage may not be made subject to a condition requiring actual residence in the territory of a Member State for a specified number of years if such a con dition is not laid down in respect of nationals of that Mem ber Slate’ (paragraph 25). ( ) Cited in footnote 6 This case concerned childbirth benefit and maternity benefit under Luxembourg law. ( ) Opinion of 16 December 1992. paragraph 25. ( ) Amended proposal for a Council Regulation (LLC) amend ing Regulation (LLC) No 1612/68 on freedom of move ment for workers within the Community, OJ 1990 C 119, p. 10. ( ) See for example my Opinion in Case 375/85 Campana [1987] ECR 2395, point 39.

Master Fontaine : This is an application by the Defendant for security for costs in the sum of £50,000 up to the hearing of a pre-trial review in this claim. Both parties rely on a number of witness statements as follows: Claimant: First witness statement of Paul Graham Nicholls dated 13 January 2011. Second witness statement of Antony Charles Verinder dated 12 January 2011. First witness statement of Colin Lovell Verinder dated 12 January 2011. First witness statement of Joy Pryor dated 12 January 2011. Second witness statement of Paul Graham Nicholls dated 17 January 2011. First affidavit of Antony Charles Verinder dated 14 March 2011. Fourth witness statement of Paul Graham Nicholls dated 14 March 2011. Defendant: Second witness statement of John Montague Woosnam dated 19 October 2010. Third Witness statement of John Montague Woosnam dated 7 March 2011. Following the hearing, when judgment was reserved, I gave permission for the parties to serve and file further evidence, and that is also relied upon, as follows: Claimant Second and Third witness statements of Joy Pryor dated 30 March 2011 and 11 May 2011 Second witness statement of Colin Verinder dated 11 May 2011 Defendant Fourth witness statement of John Montague Woosnam dated 20 April 2011 The Claimant concedes in this application that the jurisdictional threshold for an application under CPR 25.13 is met, namely that the Claimant is a company and there is reason to believe that it will be unable to pay the Defendant's costs if ordered to do so. The Claimant submits that the discretion of the court should be exercised not to make an order for security for costs on the following grounds: i) On balance of probabilities the Claimant has demonstrated by evidence that the claim will be stifled if security is ordered for more than the sum of £1,000. ii) That the Claimant's impecuniosity is a result of the Defendant's breach of contract which is the subject of these proceedings. iii) The Claimant has good prospects of success in the claim. iv) Under the court's exercise of the overriding objective the discretion should not be exercised taking into account: a) The relative financial positions of the parties; b) The need to deal with the case fairly, such that the interests of justice require that the disadvantage to the Claimant of the making of an order for security outweighs the disadvantage to the Defendant in not making such an order. The Defendant submits that the court's discretion should be exercised in favour of making an order because: i) There are lacunae in the evidence of the Claimant with regard to the financial position of the company and its directors such that the court cannot be satisfied that an order for security would stifle the claim. ii) The Defendant's failure to proceed with the contract which is the subject of the claim was not the cause of the Claimant's impecuniosity. Rather, the Claimant company was impecunious before the termination of the contract and has continued to be so. iii) The Claimant's belief in its prospects of success are not borne out by the fact that the proceedings were issued in 2009 and the claim has not yet reached close of pleadings, because there have been a number of drafts of the particulars of claim, and two orders to amend the particulars of claim, which suggests that the Claimant's faith in its own claim is uncertain. iv) The overriding objective is in favour of security being granted. Factual Background Both parties are and were at all times limited companies carrying on the business of provision of internet services. Mr Colin Verinder and Mr Antony Verinder are father and son, and shareholders of the Claimant. Mr Colin Verinder is a director of the Claimant. Mr Antony Verinder is the Company Secretary and is also a solicitor, employed as an associate solicitor at a London firm. The parties, and the shareholders of the Claimant, entered into a contract in writing entitled "Investment and Shareholders Agreement" dated 8 February 2007 ("the contract") whereby the Defendant agreed, in exchange for a 40% shareholding in the Claimant company, to provide the sum of £50,000, by two payments; £15,000 on signature of the contract and the opening of a valid bank account, and a further £35,000 on or before 28 February 2007. The Defendant also agreed to provide business support to the company as outlined in Clause 6 of the contract. Clause 7 sets out conditions precedent to be satisfied before the Defendant was obliged to make the investment. The Claimant gave warranties in respect of a business plan which it had prepared, referred to in Clause 8 and attached to the contract. It is not in dispute that the Defendant failed to pay either of the sums specified under the contract nor any of the services specified in Clause 6 ("the support services"). The Claimant's claim for loss and damage is divided into two heads, namely "expectation loss" and "reliance loss". Under the first head of damages it is claimed that if the contract had been complied with, namely by the provision of the sum of £50,000 and the support services, the Claimant would have realised a net profit of over £3 million by 31 January 2009, in accordance with the trading forecast set out in the business plan. Instead it made a net loss during the same period of just under £300,000. The claim for damages is therefore based on the loss of a chance of being able to better its net profits by the sum of c. £3.5 million. The claim for reliance losses relates to sums expended or liabilities incurred by the Claimant based upon its reasonable reliance on the Defendant's performance of the contract. In particular, the Claimant entered into service contracts with directors and an employment contract with a website designer, under which it incurred liabilities. The defence to the claim, primarily, is that the Claimant failed to comply with conditions precedent to the contract in Clauses 7 and 3.2.1. There is also a denial that the Claimant has correctly specified the extent of the obligations owed by the Defendant under the contract pursuant to Clause 6. The Law It is clear from the wording of CPR 25.13 that the court's power to make an order for security for costs under rule 25.12 is discretionary. Rule 25.13(1)(a) provides that the court may only make such an order if it is satisfied, having regard to all the circumstances of the case, that it is just to make the order. The following authorities were referred to by the parties, and I have summarised the propositions of law which may be taken from those authorities: i) Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 All E.R. 534 at 539. The principles for the approach that the court ought to adopt in such an application are: (1) That the court has complete discretion whether to order security and will act in the light of all the relevant circumstances (Sir Lindsay Parkinson & Co Ltd v Triplan Ltd [1973] 2 All E.R. 273). (2) The possibility or probability that the claimant company will be deterred from pursuing its claim by an order for security is not without more a sufficient reason for not ordering security (Okotcha v Voest Alpine Intertrading GmbH [1993] BCLC 474 at 479 per Bingham LJ). (3) The court must carry out a balancing exercise weighing the injustice to the claimant if prevented from pursuing a proper claim for an order for security, against the injustice to the defendant if no security is ordered and at trial the claimant's claim fails and the defendant is unable to recover costs it has incurred in the defence of the claim. The court will properly be concerned not to allow the power to order security to be used as an instrument of oppression, such as by stifling a genuine claim by an indigent company against a more prosperous company, particularly when the failure to meet that claim might in itself have been a material cause of the Claimant's impecuniosity (Farrow v Lacy, Hartland & Co (1885) 28 Ch Div 482 at 485 per Bowen LJ). But the court will also be concerned not to be so reluctant to order security that it becomes a weapon whereby the impecunious company can use its inability to pay costs as a means of putting unfair pressure on the more prosperous company (Pearson v Naydler [1977] 3 All E.R. 531 at 537). (4) The court will have regard to the claimant company's prospects of success but it will not go into the merits in detail unless it can clearly be demonstrated that there is a high degree of probability of success or failure (Porzelack KG v Porzelack (UK) Ltd [1987] 1 All E.R. 1074 at 177 per Brown-Wilkinson V-C). (5) The court in considering the amount of security that might be ordered will bear in mind that it can order any amount up to the full amount claimed by way of security, provided that it is more than a simply nominal amount; it is not bound to make an order for a substantial amount (Roburn Construction Ltd v William Irvine (South) and Co Ltd [1991] BCC 726). (6) Before the court refuses to order security on the grounds that it would unfairly stifle a valid claim, the court must be satisfied that, in all circumstances, it is probable that the claim would be stifled. The court should consider not only whether the claimant company could provide security out of its own resources to continue the litigation, but also whether it can raise the amount needed from its directors, shareholders, or other backers or interested persons. It is for the claimant to satisfy the court that it would be prevented by an order for security from continuing the litigation (Flender-Werft AG v Aegean Maritime Ltd [1992] Lloyd's Rep 27). ii) Newman v Wenden Properties Ltd [2007] EWHC 336 (TCC) at [9] before HHJ Coulson QC. The principles applicable to considering whether an order for security would stifle a genuine claim are: a) Where an order for security for costs against the claimant company might result in oppression, in that the claimant company would be forced to abandon a claim which has a reasonable prospect of success, the court is entitled to refuse to make that order, notwithstanding that the claimant company, if unsuccessful, would be unable to pay the Defendant's costs (see Aquilla Design (GRB) Products Ltd v Cornhill Insurance plc[1988] BCLC 134). b) Before the court refuses to order security on the grounds that it would unfairly stifle a valid claim, the court must be satisfied that in all circumstances it is probable that the claim would be stifled (Keary Developments). c) In all but the most unusual cases, the burden lies on the claimant company to show that, apart from the question of whether the company's own means are sufficient to meet an order for the security, there will be no prospect of funds being available and forthcoming from any outside source (see Kufaan Publishing Ltd v Al-Warrack Bookshop Ltd March 1 2000 Court of Appeal (unreported)). iii) Al-Koronky v Time Life Entertainment Group Ltd [2006] EWCA Civ 1123 at [27] – [28] and [30] – [31]. (1) The court must scrutinise the evidence of the Claimant's means "with a critical eye and ..note unexplained gaps in the information which the claimant volunteers or in the documentary support for it". (2) If the court is not satisfied that a full account of the resources available to the claimant the court in its discretion can provide its best estimate of what the claimant, "despite having been insufficiently candid", can afford, by way of security. (3) There is an obligation to read CPR 25.13 in conformity with Article 6 of the European Convention on Human Rights by virtue of section 3(1) of the Human Rights Act 1998. This obligation is met by the principle that the court may not fix security in what it knows to be an unaffordable amount. (4) There is a clear difference between incurring a substantial risk, in the overall interests of justice, that a claimant will not be able to raise the sum required as security, and setting a sum in the knowledge that it cannot do so. The latter is tantamount to striking out the claim and requires the same process and justification as any other strike-out. The former is the striking of a balance of the kind described in the authorities, within the Convention paradigms. The defendant also has entitlements under Article 6, including the right not to have their access to a court rendered prohibitive by the prospect of irrecoverable costs, or an entitlement to have the claimant's access limited by relevant and proportionate conditions. iv) Michael Phillips Architects Ltd v Riklin [2010] EWHC 834 (TCC) Akenhead J at [18] as to whether ATE insurance can provide adequate or effective security for the defending party's costs: a) There is no reason in principle why an ATE insurance policy which covers the claimant's liability to pay the defendant's costs, subject to its terms, could not provide some element of security for the defendant's costs. It can provide sufficient protection. b) It will be a rare case where the ATE insurance policy can provide as good security as a payment into court or a bank bond or guarantee. That will be, amongst other reasons, because insurance policies are voidable by the insurers and subject to cancellation for many reasons, none of which are in the control or responsibility of the defendant, because the promise to pay under the policy will be to the claimant. c) It is necessary where reliance is placed by a claimant on an ATE insurance policy to resist or limit a security for costs application for it to be demonstrated that it actually does provide some security. Put another way, there must not be terms pursuant to which or circumstances in which the insurers can readily but legitimately and contractually avoid liability to pay out for the defendant's costs. d) There is no reason in principle why the amount fixed by a security for costs order could not be somewhat reduced to take into account any realistic probability that the ATE insurance would cover the costs of the defendant. The Issues (A) Whether an order for security will stifle the claim The Claimant provides evidence of the company accounts up to the end of March 2010, and the company bank statements with Natwest Bank from 3 December 2010 to 4 March 2011. The bank statements show an overdrawn balance of £20.06 as at 4 March 2011. Mr Antony Verinder gives evidence in his affidavit at paragraph 6A that there is now a balance of £979.24 standing to the Claimant's credit at the date of the affidavit (14 March 2011). Mr Antony Verinder gives evidence that no management accounts are prepared by the Claimant company. Mr Antony Verinder gives evidence as to his and his father's assets. He exhibits bank statements relating to his own Natwest account from 10 December 2010 to 10 January 2011 showing an overdraft of just over £1,000, his Barclays bank statement from 12 January 2011 to 11 February 2011, showing an overdraft of £25.68, and his Natwest Visa credit card account dated 9 February 2011 showing a debit balance of £4,702.89. He exhibits other accounts, savings and ISA accounts showing a balance of some £300 in total. He exhibits his parents' joint Barclays bank account statements from 13 January 2011 to 12 February 2011 showing a closing balance of £18.80 and an opening balance of an overdraft. Mr Antony Verinder also gives evidence in relation to two assets available to his family, namely property at 24 Brownhill Drive, Padgate, and his maternal grandmother's estate. In paragraph 13 of his witness statement he explains that the property at Brownhill Drive is a property owned and lived in by his parents, and that because of his father's dire financial straits because he was not receiving the salary that he was due under his service contract with the Claimant he was unable to meet mortgage payments and the mortgagees had applied for possession of the property. To avoid a possession order in favour of the mortgagees, Mr Antony Verinder purchased that property from his parents for a sum of £180,000, giving a net sale price of £161,970, from which deductions were made for redemption of the first mortgage and additional charges and legal fees, leaving a total due to his parents of £40,923. He explains that his parents gave him by way of deed the value of 10% of the property before the purchase in order for him to obtain a mortgage because they did not have the necessary money for the deposit. He says that the sale proceeds of £40,923 were received by his parents over two and a half years ago and the money was used for their living expenses and to pay off substantial personal debt, incurred because his father had not received sums due to him under his service contract. He says that he has been informed by his father that the money therefore no longer exists. He further gives evidence that following consultation with an online valuation provider, "Zoopla", the property is currently valued at £159,310, less than the sum of £160,622.60 owed upon the mortgage so that he would be unable to recover any funds even if the property were to be sold. With regard to his grandmother's estate, he gives evidence at paragraph 15 that his maternal grandmother Bridget died on 22 December 2008. He is informed by his mother that other than insignificant cash sums his grandmother's estate consisted of a small property worth less than £90,000, left to his mother and his uncle in joint ownership. The property has been up for sale since shortly after his grandmother's death and there has been little interest and it remains unsold. He further says that even if the property was sold there is no reason why his mother would be willing to offer monies to the Claimant by way of a loan, as she is not a director, shareholder or backer of the company. Mr Antony Verinder gives evidence (paragraph 10 of his affidavit) that the present litigation is funded primarily by way of a CFA in respect of the claimant's instruction of its previous solicitors, Frank Howard, and its current solicitors, Nicholls Law. The Claimant's counsel is also acting under a CFA. The issue fee for the claim and the allocation fee were paid by loans advanced by Mr Colin Verinder. A sum of £1,500 was paid to the previous solicitors to cover the costs of instructing counsel to amend the particulars of claim, but when counsel agreed to act on a CFA this sum was transferred to the current solicitors, Nicholls Law. Of this sum, the sum of £424.80 has been used by way of disbursements and a sum of £1,000 has been repaid to the Claimant, part of which constitutes the sum of £979.24, being the Claimant's current account balance. Further, Mr Antony Verinder sent a sum of £218.45 to Nicholls Law on behalf of his father to be used for disbursements, on 31 January 2011. With regard to future disbursements, the Claimants seek to rely only on one expert witness, namely a viability expert, in respect of the likelihood of the business plan succeeding. An expert has been identified who is a former employee of PriceWaterhouse Coopers and a venture capitalist who has indicated that he would in principle be prepared to appear as the Claimant's expert witness and that his funding "would not be expensive" as he has considerable expertise in assessing the viability of start-up ventures and is keen to have the experience. The Defendant's position, set out in submissions and in the witness statement of Mr Woosnam, is that a number of areas of uncertainty remain in respect of the evidence submitted by the Claimant as to its financial position, in particular with regard to the fact that there are no management accounts for the company, it appears from the evidence that the company may be trading whilst insolvent and there is no evidence that the income of the Claimant was going into the bank accounts that the Claimant had disclosed. It is submitted that there is no proper explanation as to how the Claimant will fund the litigation in the future as the expert will not be paid by the ATE policy, and if a mediator is to be instructed by the parties, the mediator will not be paid by the ATE policy. It is submitted that the court should conclude that the Claimant must have a substantial cash fund to enable the litigation to be funded. (B) Whether the claim has a good prospect of success It is accepted by the authorities that the court cannot go into detail as to the merits of the claim, but it is a relevant consideration as to whether the claim has a reasonably good prospect of success. The Defendant does not suggest that there are not reasonable prospects of success for the purposes of this application. I am satisfied that there are reasonable prospects of success on the basis of the pleaded cases and the evidence seen so far. The breaches of contract are denied, and the defence relies on alleged non-compliance by the Claimant with various conditions precedent in paragraph 16. The Claimant submits that the defence is "flimsy" and "makeweight". Whilst not being in a position to reach a view as to whether I agree with that submission, I accept that the claim appears to be a strong one and that the primary defence relied upon in paragraph 16 is far from being overwhelming. I note also that the Claimant's ATE insurers assessed the Claimant's prospects of success at more than 60%, their minimum requirement (Pryor No 2, Paragraph 9) and that the Claimant's former solicitors, Frank Howard, evaluated the Claimant's prospects of success at 75% (Exhibit CLV2, page 1). With regard to this issue the Defendant has relied on emails from Mr Antony Verinder which the Claimant alleges are privileged because in contemplation of litigation. I have reached the view, having seen those e-mails, that they are privileged because they were made in contemplation of this litigation. The Defendant also refers to the fact that it has taken the Claimants from 2007 to late 2009 before embarking on proceedings against the Defendant, and that the particulars of claim have changed a number of times so that the Claimant appears to be uncertain of the claim it wishes to advance. It is apparent from the evidence that the delay in commencing proceedings, (which were issued in any event well within the limitation period), was because of problems in funding such litigation. The amendments to the particulars of claim do not, in my view, reflect adversely on the merits of the claim. I cannot form any view as to the likely quantum of the claim as the major part of this will be the expectation losses claim, and subject to expert evidence. (C) Whether the Defendant caused the Claimant's impecuniosity The Defendant denies that this was the cause of the Claimant's impecuniosity. It says that the situation is analogous to the position in the case of Newman v Wenden Properties and that the judgment of HHJ Coulson QC (as he then was) at paragraph 20 is referable to this situation. It is submitted that the Claimant was impecunious before the contract was entered into and it is still impecunious and that the present impecuniosity was not caused by the Defendant because the Claimant never had any real assets and was always in financial trouble. The Claimant submits that the failure of the Defendant to provide the sum of £50,000 promised under the contract, and just as importantly, and perhaps more importantly, the services promised in Clause 6 of the contract, has led to the financial difficulties that have caused it to be impecunious. The Claimant submits that the case of Newman is not a fair comparison. The Defendant contracted to provide financing and also substantial business support services. The funding not having been provided, Mr Colin Verinder and Mr Antony Verinder have had to invest substantial sums of their own into the Claimant company. There is exhibited a letter from Mr A.M. Bothey (the company's independent accountant/auditor) to Mr Colin Verinder dated 11 January 2011 which confirms that Mr Colin Verinder is owed a sum of £28,010 from the company to the year 31 March 2010, and that Mr Antony Verinder is owed a total of £25,461 for the same year. Mr Bothey states that the figures will be included in the company accounts for the year ending 31 March 2011. They are not included in the 2010 account. Mr Bothey states "these respective debts have largely arisen through funds that both you and Antony have loaned to the company in order to keep the business running, following the failure by Billscutter Ltd to provide the investment capital and infrastructure that was required by the company to implement its business plan. The financial contributions made have been expended on various things integral to the company's business, such as fuel, wages (in particular Andrew Gough), commission payments, utilities, repairs and fees of suppliers. You have both transferred the money since 31 March 2010 which will need to be quantified." Accordingly, it is submitted that the lack of funds available from either Mr Colin Verinder or Mr Antony Verinder to fund litigation has been directly caused by the need to invest these capital sums which would not have been required had the Defendant invested the sum of £50,000 and provided the support services which they contracted to do. Further, without the investment from the Defendant the Claimant is a less attractive proposition to any other potential investor because of the level of debt which it did not have at the time when the contract was entered into, in particular the indebtedness to the directors as a result of their investments. (D) The relevance of the ATE insurance The Claimant relies on the first witness statement of Joy Pryor. Ms Pryor is an underwriter with First Class Legal (IS) Limited, a provider of after the event insurance and legal funding. She confirms in her witness statement that ATE insurance has been arranged for the Claimant by her company with a level of indemnity of £65,000. She attaches a copy of the policy wording and she sets out her company's approach towards the cancellation of cover, which are the usual matters where any insurer would not be prepared to indemnify. She says that top-up insurance can be given to increase the level of cover should the level of indemnity be reached. She says that "the cover provided by the ATE policy therefore would provide security in most cases provided the policy terms and conditions had been complied with". On the date of hearing, following my questions, confirmation was obtained by the Claimant's solicitors by email that insurance cover had been arranged by the same insurers in respect of the premium for the insurance cover in the sum of £32,000. That was a matter of concern to the Defendant because the premium was not payable until the end of the case, and it was anticipated that it would be funded out of recoveries made from the claim, whereas if the claim was not successful, there would not be funds to pay the premium. The Claimant submits that the facts of the case of Phillips (see above) are very different from the present circumstances, that being a defamation claim, so that if the claimant had lost the case it would indicate that he had made misrepresentations about his case to his insurers. The Defendant relies on the conclusion in Phillips where the judge took the view that the ATE insurance in that case did not provide sufficient security to the Defendant, and the quotation in that judgment (at [17]) from the judgment of Longmore L.J. in Belco Trading Co v Kondo [2008] EWCA Civ 205 at [5]: "It would, in my judgment, be most unjust to the Defendants to prevent them from pointing out that the policy in fact gives them much less security than the traditional form of security for costs." I take into account these submissions in reaching my final conclusion, below. I have also been assisted by the further evidence of Ms Pryor, served after the hearing. (E) The exercise of the court's discretion and the overriding objective It is submitted on behalf of the Claimant that the court's discretion should be exercised not to grant the Defendant's application when taking into account the overriding objective in respect of the following matters: i) The relative financial positions of the parties The Claimant company is a small fledgling company struggling financially. The Defendant is a substantial company with a projected turnover of £4.5 million. When considering the prejudice to the Claimant if security for costs were ordered, and the prejudice to the Defendant if security for costs were not ordered, then the balance must be in favour of not ordering security, because the Defendant company would be likely to be able to bear the costs risks, such as they are with the ATE insurance in place, whereas the Claimant would not be able to fund a substantial payment for security for costs. ii) The Defendant is a large and sophisticated company which chose to walk away from an agreement it had entered into, leaving the Claimant company in substantial difficulties. iii) Only the balance sheet of the Defendant's accounts is provided and not a profit and loss account. The balance sheet suggests that the company must have substantial funds available to it from its backers, a very different position to that of the Claimant. iv) The Defendant's position on costs is substantially protected because there is ATE insurance in place. The Defendant submits that the Claimant's submissions with regard to its financial situation have been made without reference to the company accounts of the Claimant. I was referred at the hearing to the notes to the account which state: "these conditions…indicate the existence of a material uncertainty which may cast about the company's ability to continue as a going concern" and "the company is also owed £83,690 from its directors. If the directors are unable to repay this amount, it would put the company's ability to continue to trade as a going concern in significant doubt." Despite those notes, the accounts were prepared on a going concern basis. The most recent filed accounts for the year ending 31 March 2010 were provided after the hearing, and are referred to at Paragraphs 19 and 20 of the fourth witness statement of Mr Woosnam. These show a net loss of £35,221 and an increase in net current liabilites from £9,861 to £71,371, and a decrease in shareholders' funds from £59,693 to £15,121. Evidence is also provided by Mr Woosnam that the Defendant suffered a poor trading year last year (which I assume to mean the year ending 31 March 2011) as a result of which it was unable to pay corporation tax, PAYE and VAT liabilities that had fallen due on years 2008/09 and 2009/10, and that it currently owes approximately £148,000, which it is discharging at the rate of £6500 per month. It also sustained irrecoverable legal fees in an unsuccessful unfair dismissal claim of £14,000. Thus it is submitted that it would be a heavy burden to the Defendant if a costs order in its favour is not paid. The Defendant relies on the case of Phillips in particular at page 5, paragraph 13.3, where the judgment of Peter Gibson LJ in Keary is quoted: "The court must carry out a balancing exercise. On the one hand it must weigh the injustice to the plaintiff if prevented from pursuing a proper claim by an order for security. Against that, it must weigh the injustice to the Defendant if no security is ordered and at a trial the plaintiff's claim fails and the defendant finds himself unable to recover from the plaintiff the costs which had been incurred by him in his defence of the claim. The court will properly be concerned not to allow the power to order security to be used as an instrument of oppression, such as stifling a genuine claim by an indigent company against a more prosperous company, particularly when the failure to meet that claim might in itself have been a material cause of the plaintiff's impecuniosity…but it will also be concerned not to be so reluctant to order security that it becomes a weapon whereby the impecunious company can use its inability to pay costs as a means of putting unfair pressure on the more prosperous company…". The Defendant also refers the court to the Claimant's reluctance to provide details of the ATE policy which, it submits, appears to be a deliberate suppression of that evidence contrary to the requirements of the Costs Practice Direction paragraph 19.32(b) and 19.41 and 3. The Defendant also submits that the Claimant's conduct has been unhelpful to the court in that it produced its evidence for the hearing in January, which was adjourned to this hearing, at the last minute and in respect of the ATE insurance complete evidence has not been provided until the day of the hearing. Further, the Claimant has not responded properly to correspondence about its assets in relation to questions posed before the application was issued. In particular, a letter dated 18 February 2011 asking detailed questions on the Claimant's accounts for the year ending 31 March 2010 was not answered and the first answer to the questions posed has come at today's hearing. Further, there was no information provided about the family assets before January 2011. There was no information from Mr Colin Verinder about how the sum of £40,923 that was released has been used up. The bank account of Mrs Gaynor Verinder has not been provided. It is submitted that there is no information as to how it is intended that the expert and any mediator will be paid. Primarily, the Defendant relies upon the fact that the Claimant is insolvent and appears from the financial information provided to be at risk of going into liquidation. It appears that it may not be in a position to pay its debts when they fall due, which is the definition of whether a company can be said to be a going concern. There is a real risk that Mr Gerald Carabini, a former director/employee of the company who has a claim under his service contract for some £60,000, will bring a claim upon which he would be entitled to bring a winding-up petition against the company, which would leave the Defendant unsecured for the costs for the claim. CONCLUSION Whether the granting of security would stifle the claim I have concluded that the evidence does support the Claimant's case that the litigation would be stifled if an order for security for costs were to be made. I consider that Mr Antony Verinder's most recent affidavit deals with the major part of the gaps in the previous evidence. I am satisfied that there is only a fund of just over £900 available to the Claimant company and that neither of the directors have funds or access to financing which would enable them to fund security for costs. I reach that view on the balance of probabilities based on the evidence before me. I do not consider that this is a case similar to that dealt with the Court of Appeal in Al-Koronky, where there are substantial lacunae in the evidence of the funds available to the company. Where there are gaps in the evidence, such as the lack of any accounts from 31 March 2010, the other evidence provided has been sufficient for me to take a view as to what the Claimant can afford, if anything, for security for costs. Further, I take account of the requirements of Article 6 of the European Convention on Human Rights, with reference to the guidance in paragraph 30 of Al-Koronky, and take the view that if a sum of more than the sum of £1,000 offered were to be ordered for security for costs, then this would breach the Claimant's Article 6 rights of access to a fair hearing. Whether the claim has a good prospect of success I have concluded (Paragraphs 16-20 above) that the claim has a good prospect of success. Whether the Defendant caused the Claimant's impecuniosity I accept the Claimant's submission that this is a different situation from that in Newman. There is evidence that funds have been invested into the company by Mr Colin Verinder and Mr Antony Verinder which have left them unable to provide further funds which might have been available for security for costs. The evidence supports the submission that such investment is likely not to have been required had the investment of £50,000 from the Defendant been forthcoming, as the contract does not provide for any such investment to be made from directors or shareholders. I have therefore concluded that the Defendant has been responsible for the current financial position of the Claimant, such that it is unable to provide security in the sum sought, or any sum other than the funds held in its bank account. The Exercise of Discretion I do not consider that the court's discretion should be exercised to order security for costs against the Claimant, applying the guidance of the authorities referred to and the overriding objective, for the reasons that follow. I consider, on the basis of the evidence, that the Claimant would be unable to pay any amount of security either using its own assets or those of its directors or any other person, and that a genuine claim would be stifled if an order were to be made. I accept that there are some lacunae in the financial information, namely that only bank statements for the period 31 March 2010 to date have been provided and not company accounts; and the director's loans due to Mr Colin Verinder and Mr Antony Verinder are not included in the 2010 accounts. Full information as to creditors has not been provided. Nevertheless, it is abundantly clear that the company is run on a shoestring and that neither Mr Colin Verinder nor Mr Antony Verinder has funds or access to funding to provide security for costs. There is evidence from the company auditor that funds have been invested in the Claimant by Mr Colin Verinder and Mr Antony Verinder (see Paragraph 23 above). I do not consider that, if it were the case, the fact that Mrs Verinder is unable or unwilling to provide funding for security for costs would be likely to weigh heavily in the balance of considerations. In any event evidence has been provided about Mrs Verinder's expectations in relation to her mother's estate, and her joint bank account statement has been provided. Insofar as there are lacunae about the information provided, I have made an assessment as to what, if any, funds could be provided by the Claimant. I have concluded that the only sum available is the sum of just under £1,000 held in the Claimant's bank account, which is, in any event, likely to be required for payment of disbursements in this litigation outside the CFA. I am assisted by the judgment of Akenhead J in Phillips at paragraph 18 with regard to the ATE insurance in place. Although the totality of this evidence has come later in the day than it should have done, it seems to me to be sufficient assurance to the Defendant that it is unlikely to be exposed if a costs order is made in its favour. Although such insurance can rarely, if ever, provide the same level of security as a payment into court or bank guarantee, it can provide a high degree of protection and I consider on the evidence that it does so in this case. I reach this conclusion on the basis of the following: i) Ms Pryor's evidence in relation to the policy. ii) The wording of the policy does not seem to me to be unreasonable in any way, and no particular criticisms of the wording of the policy have been made by the Defendant. iii) The level of cover is adequate for present purposes. iv) Evidence has been provided as to how the premium is insured. Even taking into account the submissions in respect of the most recent filed accounts of the Defendant it is clear that the Defendant is a company that operates on a much more substantial level than the Claimant. I consider that weighing the balance of prejudice to the Claimant if an order were to be made, and to the Defendant if an order is not to be made, would favour not making an order, given the relative financial positions of the parties, and the fact that ATE insurance is in place. I do not accept that the criticisms of the Claimant's conduct are made out to a level that would affect the exercise of the court's discretion. In particular, although the failure of the Claimants' solicitors to provide the required details of the CFA insurance were extremely unfortunate, it was apparent to me, when I dealt with the application for relief from sanction, that such failure was in fact caused by the solicitors being unaware of the relevant court rule and practice direction, surprising though that may be for solicitors conducting litigation, rather than by any desire to conceal information. Although it is unfortunate that the complete information about the operation of the ATE insurance was provided late in the day, it has now been provided and I have found Ms Pryor's evidence helpful. Having concluded that a genuine claim would be stifled by the ordering of security, it would not be in the interests of justice to make such an order, and to do so would, in my view, be in breach of the Claimant's Article 6 rights of access to justice. In this regard I also consider that the principle enunciated by the Court of Appeal in Aquilla Design at pages 138-9, as summarised by Coulson J. in Newman at para. 9 (a) (see Paragraph 8(ii) (a) above), are of relevance to this application, in relation to the possibility that the ATE policy may not cover all or some of the Defendant's costs if the defence is successful. Accordingly I will dismiss the application.

Lord Justice Rimer : This is a renewed application for permission to appeal. The applicant, Didier Vuvamu, is the claimant in judicial review proceedings against The Secretary of State for Transport. His claim relates to the administration of the provisions of the Road Traffic (New Drivers) Act 1995 ('the 1995 Act'), which is the responsibility of the Driver and Vehicle Licensing Agency ('DVLA'). His claim form, issued on 31 January 2012, seeks a mandatory order requiring the DVLA to 'restore my driving licence in their records to the status of that of a full licence holder'. His Honour Judge Pelling QC, by an order made on the papers on 6 June 2012, refused the applicant permission to apply for judicial review, and did so on three grounds: (i) the applicant had no realistic prospect of showing that the DVLA had not, as it had been entitled to do, served notice revoking his driving licence; (i) even if he could show that, it was still open to the DVLA to serve a revocation notice, so that the application was at best of academic interest; and (iii) the application was made more than two years after the applicant had learnt of the grounds on which he relied and there was no arguable case for an extension of time. The applicant renewed his permission application at an oral hearing, which on 2 August 2012 also came before Judge Pelling. The applicant appeared in person and counsel represented the respondent. For the reasons given in an extempore oral judgment, Judge Pelling endorsed his earlier refusal of permission, ordered the applicant to pay the respondent's costs assessed at £513 and refused permission to appeal. I record that the applicant asserted in the index to the bundle before me that 'permission to appeal has been verbally allowed by [the judge]', but he is, with respect, obviously mistaken about that. The judge's order expressly records the refusal of permission, in line with what he said in the post-judgment exchange as recorded in the transcript. Having refused permission the judge said to the applicant that 'You may apply for permission to appeal, but you must apply to the Court of Appeal in London'. It may be that it is that remark that the applicant has misconstrued as the giving of a 'verbal' permission to appeal. The applicant thereafter filed an appellant's notice on 3 October 2012. That was some seven weeks out of time, and in section 8 of his appellant's notice, in which the applicant sought an extension of time, he explained his delay as being because he had not received any written reasons for the refusal of his application, he could not afford to apply for a transcript and that it was only on 23 August 2012 that he learnt that he would be eligible for a fee remission if he were to apply for a transcript. Those reasons are, with respect, unimpressive. The applicant had heard Judge Pelling's oral judgment delivered on 2 August 2012 giving his reasons for his order refusing permission, the time for appealing ran from then, and he was not entitled to await the provision of a transcript before filing an appellant's notice. Like many litigants in person, the applicant appears to have proceeded on the basis that he is entitled to ignore procedural time limits. He was wrong. The rules as to the time for the filing of appellant's notices apply as much to litigants in person as to those represented by lawyers. Rafferty LJ, on the papers on 24 May 2013, refused permission to appeal. She said that Judge Pelling had correctly analysed the law and had clearly explained it to the applicant. Predictably, the applicant did not accept her decision either and he renewed his application at an oral hearing before me. He was disadvantaged in doing so by the fact that he has less than a completely fluent command of English but he explained his case by reading from a ten-page typed document that he had helpfully prepared, an exercise which occupied most of the 45 minutes that I allowed him for the hearing as compared with the 30 minutes usually allocated for such applications. Judge Pelling explained the facts in his judgment. The applicant passed his driving test on 25 July 2005 and received a full driving licence. On 9 August 2007, he was convicted by Rochdale Magistrates Court of an offence committed on 26 April 2007 of driving without insurance. A financial penalty was imposed and the court directed that his licence should be endorsed with six penalty points. The applicant surrendered to the court his licence and counterpart so that the points could be endorsed on the latter. As the offence was committed within two years of the passing by the applicant of his driving test, it was committed during the 'probationary period' specified in section 1 of the 1995 Act. Section 2(2) of that Act required the court, as it did, to send the DVLA a notice containing the particulars required to be endorsed on the counterpart and also the licence and counterpart themselves; and section 3 of the Act required the DVLA to serve a notice on the applicant revoking his licence. By section 3(2), such revocation takes effect 'from a date specified in the notice of revocation which may not be earlier than the date of service of that notice'. In order to re-obtain a full licence, it is necessary first to re-pass the relevant driving test (section 4). The DVLA claims that it wrote to the applicant on 13 August 2007 revoking his licence and asking for its return (although I am not clear why it should have done the latter, since the magistrates court had sent it to them) and claims that the licence was revoked within five days of the date of the letter, namely 18 August 2007. The DVLA also claims that, not having received the licence, it wrote to the applicant again on 10 September 2007. The applicant denies having received either letter and asserts that on 27 August 2007 the DVLA returned to him his licence (which at least twice he refers to in the papers as a 'new' licence) together with the counterpart, the latter having been endorsed with the six penalty points. Judge Pelling proceeded on the assumption that that the applicant had an arguable case that his factual assertions in this respect were correct. It is relevant to note that the combined effect of section 9(4) of the 1995 Act, section 107 of the Road Traffic Act 1998 and section 7 of the Interpretation Act 1978 is that the service of any revocation notice sent by the DVLA was 'deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post'. The story moved on to July 2009, when the applicant moved to Wirral and sent his licence to the DVLA for change of address purposes. The DVLA retained it, since it was treating his licence as having been revoked in 2007, and it treated its return as an application for the issue of a provisional driving licence. In October 2009, the applicant entered into correspondence with the DVLA requesting either the return, or the re-issue, of his licence (I do not have copies of his letters written at this time). On 17 November 2009, the DVLA wrote to him in reply to his letter of 29 October 2009 explaining that, following his conviction on 9 August 2007 and in view of the provisions of the 1995 Act, his full licence had been revoked and it referred to the sending to the applicant of the letter of 13 August 2007 and of a reminder letter a month later. That letter made it clear to the applicant, if it had not been clear before, that the DVLA was claiming to have revoked his licence on 18 August 2007 and that his only way forward to obtaining a new full licence was by way of applying for a provisional one and re-passing the driving test. On 2 February 2010, the applicant was stopped by the police and charged with the offence of driving without a valid licence. He was convicted at Wirral Magistrates Court on 4 June 2010. The applicant claims, and the judge assumed him to be correct, that his appeal to the Liverpool Crown Court against the conviction was allowed and the conviction quashed on 18 November 2010. The respondent's skeleton argument before the judge asserted that the respondent had no knowledge of the quashing of the conviction. The applicant then engaged the assistance of Haworth & Gallagher, solicitors. On 5 January 2011, they wrote to the DVLA asserting that the quashing of the conviction was based on the finding that the applicant's licence had not been revoked by the DVLA. They asked the DVLA to amend its records so as to indicate that the applicant's licence had not been revoked. I do not have a copy of any reply to that letter. Haworth & Gallagher wrote further to the DVLA on 13 June 2011 (I do not have a copy of that either), but I do have copy of the DVLA's reply of 5 July 2011 in which it explained that: 'The letters advising drivers of the revocation of their driving licences are "one-off" computer generated letters. As such I am unable to provide you with copies of the letters. Neither am I able to provide evidence that they were sent to [the applicant] since they would have been sent by normal (unregistered) mail.' On 23 September 2011, Haworth & Gallagher wrote to the DVLA, referring to their previous correspondence. The letter made the point that no notice of revocation of his licence had been sent to the applicant and that therefore his licence had not been revoked. They referred to the DVLA's stance (expressed in a letter which I do not have) that the applicant's 'licence is that of a revoked driver' and repeated their request that 'the status of his licence be reinstated to that of a fully licensed driver'. They gave notice that if his licence was not restored to him within 14 days, he would commence judicial review proceedings, the challenged decision being the decision 'not to return him to the status of a full driving licence holder'. The DVLA's response, on 7 October 2011, received by Haworth & Gallagher on 17 October 2011, was that it had nothing to add to its previous correspondence. The applicant's judicial review claim was issued on 31 January 2012, which was approximately three and a half months after such receipt. The applicant's point in his claim is that the DVLA has never revoked his licence by giving him the requisite notice and that its issue to him in 2007 of his licence endorsed with the six penalty points (and in reliance upon which he drove for some years afterwards) was inconsistent with any notion that his licence had been revoked. As I follow it, he is asking for an order that the licence he sent to the DVLA in 2009 be returned to him and/or that the DVLA's records be corrected so as to show him as holding a full licence. Judge Pelling recorded that the applicant placed heavy reliance on the quashing in November 2010 of his conviction for driving without a valid licence. His point was presumably that such conviction was consistent only with a conclusion that he had a valid licence. The judge, however, correctly noted that the burden of proof in the criminal prosecution was different and noted also that the material the applicant had put before him did not disclose that any evidence was adduced on the appeal with a view to demonstrating that the licence had been revoked in the way in which the DVLA was asserting that it had been in the instant proceedings. The judge did not, therefore, regard the outcome of the 2010 criminal proceedings as of material relevance. In that respect, the judge was in my view obviously right. The quashing of the applicant's criminal conviction plainly did not amount to any sort of in rem declaration that the applicant had, and had always had and/or was entitled to, a full driving licence. That being so, the judge regarded the applicant's case as difficult. If, as the DVLA asserted, the applicant's licence had been revoked in 2007, that was the end of the case since, subject to the provisions of section 4 of the 1995 Act, there is an absolute prohibition on the grant of a full licence to someone whose licence has been so revoked. The question, therefore, was whether the applicant's licence had been revoked. The judge was satisfied that it had. He had earlier referred to a letter from the DVLA to the applicant dated 11 February 2010 explaining that following the applicant's conviction on 9 August 2007 the DVLA had sent the applicant the two letters referred to in paragraph 8 above; and the judge also explained how, because of the way in which the DVLA computer processors operate, no copy of either letter was available to DVLA, although in paragraph 18 of his judgment he set out the contents of the standard form letter that would have been sent to the applicant giving notice of the revocation of his full licence. Even though the applicant may not have received the letters, the judge was satisfied that an automatically generated notice was sent to him and that, by reason of the provisions also referred to in paragraph 8 above, service of the notice would be deemed to have occurred. As the applicant's licence had been revoked, the issue to him of a new licence was beyond the statutory powers of the DVLA and so any licence in fact issued to him was issued erroneously and unlawfully. The issue of such a licence might have provided the applicant with a defence to a charge of driving without a valid licence if he had honestly believed the licence issued to him to be a valid one. But it would not detract from the DVLA's obligation to revoke his licence, or undermine the effectiveness of its revocation decision. For my part, whilst I would not regard it as arguable that no revocation notice was posted to the applicant on 13 August 2007, I have respectful reservations as to whether the judge was also right that it is unarguable that such notice was not also served on him; and service of the notice is required in order to effect the revocation. The judge stated that he was prepared to assume that the applicant was correct in saying that he never received the letter of 13 August 2007. As it seems to me, it is arguable that the judge was therefore assuming facts that amounted to proof of the 'contrary' for the purposes of section 7 of the Interpretation Act 1978 (i.e. that the letter was not delivered in the ordinary course of post). If so, it may follow that it is arguable that there was no revocation of the applicant's licence in August 2007. But for three reasons, all of which were advanced by the respondent in opposition to the applicant's claim, I would anyway endorse the judge's view that this was not a case for the giving of permission for judicial review and that there is no real prospect of the Court of Appeal holding otherwise on an appeal to the full court. First, if by reason of any failure of service of the revocation notice the applicant's licence was not revoked in August 2007, the DVLA remained and remains under a continuing obligation to revoke it under section 3 of the 1995 Act, because section 3(1) makes it plain that revocation is mandatory. It follows, therefore, that even if the applicant is able, on the facts, to make good his case that his licence was not revoked in August 2007, it will do him no good since any such finding would lead inevitably to a fresh exercise of revocation by the DVLA. The return to the applicant, as he claims, of his licence on 27 August 2007 was not an act that can have resulted in the applicant being exempt from the provisions of the 1995 Act. On the contrary, it is in the public interest that no-one should be so exempt. Secondly, the applicant's application for judicial review is hopelessly stale. He purports to base his claim on the DVLA's decision of 7 October 2011. Even if that was the, or a, relevant decision, the applicant still did not issue his judicial review application for over three months, and even then he did not serve it until more than two months later. CPR Part 54.5 provides that a judicial review claim form must be filed 'promptly' and 'in any event not later than 3 months after the grounds to make the claim first arose'. The applicant complied with neither limb of that provision. In any event, it is unreal to regard the letter of 7 October 2011 as the relevant event that grounded his claim. He had known since, at the latest, November 2009 that the DVLA was claiming that it had revoked his licence in August 2007, and if he wished to challenge its decision so to claim, he should have brought his claim promptly after that. Judicial review is a discretionary remedy which is required to be sought with considerable promptness, whereas the applicant made no attempt to do so. There is no real prospect of the Court of Appeal, were he to be given permission to appeal, giving him permission to make such a stale claim. Thirdly, the applicant was not only seriously late in applying for judicial review, he was also seriously late in filing his appellant's notice against the judge's adverse decision: his notice was filed some seven weeks late. He has produced no sufficient explanation for such lateness. In my judgment, given the combined features of the lack of merit in his claim, its manifest staleness and the absence of any sufficient explanation for the lateness in the filing of the appellant's notice, there is no justification for granting any extension of time to the applicant for the filing of his appellant's notice. I refuse to extend the applicant's time for the filing of his appellant's notice and I also refuse him permission to appeal.

Peter Gibson L.J.: For some time it has been recognised that a local authority may seek the assistance of the civil courts to enforce the criminal law by way of an injunction to stop the flouting of that law. By these proceedings the Claimant, Worcestershire County Council ("the Council"), is seeking to go further than that to obtain an injunction restraining a breach of the criminal law. In circumstances in which the Defendants, Lionel Tongue and his sons David and Stephen (together "the Tongues"), have been convicted of offences of cruelty to some of their cattle and have been disqualified by the magistrates court from having custody of cattle for the rest of their lives, the Council asked the Chancery Division for an order authorising the Council to go onto the Tongues' land and remove all the cattle there. Neuberger J. at the trial of the action held, with some regret, that the court did not have jurisdiction to make such an order. With the permission of the judge the Council now appeals. The Tongues seek an extension of time in which to cross-appeal on the order made by the judge on costs, viz. that there be no order for costs. We indicated that we would deal with that after we had given judgment on the appeal. The facts The Tongues farm 6 farms in the Redditch area of Worcestershire. Crumpfields Farm (where they live) and Boxnott, Emmerdale, Inkberrow, Pump House and White House Farms. Save for Boxnott Farm, which is rented by Lionel Tongue, the freeholds of the farms are owned by one or more of the Tongues. A large part of the Tongues' farming activities has involved the keeping and rearing of cattle. Cattle were kept on all the farms. The judge found that 110 were at Emmerdale Farm, 64 at Inkberrow Farm and 8 at Pump House Farm at the time of his judgment. About 60 more were at Crumpfields, Boxnott and White House Farms at the time when His Honour Judge Norris Q.C. made an interlocutory order on 27 March 2003. It was David Tongue's case before Neuberger J. that the cattle at Emmerdale, Inkberrow and Pump House Farms were owned by him until shortly before 27 November 2002 when a disqualification order against him took effect. He claimed before the judge that he had made a gift of the cattle to his girlfriend, Allison Green, as evidenced by a manuscript document dated 7 November 2002 by which he certified that he had transferred ownership of his cattle to Ms. Green, and she signed a consent to having taken custody of animals and to their transfer. David Tongue also granted a series of tenancies to Ms. Green of each of Inkberrow and Emmerdale Farms. Each of the first two tenancies was for a term of one month and for a rent of £500. The rent was never paid. The third tenancy of each farm was for three months from 26 January 2003 and the fourth for five months from 27 April 2003. No rent was reserved by the third and fourth tenancies of each farm. A neighbouring farmer, Graham Hughes, agreed to purchase from Ms. Green 11 of the cattle at Inkberrow Farm. Six were transferred to Mr. Hughes for £4,185. Five remained at Inkberrow Farm. The judge found no other binding agreement for the sale of cattle to Mr. Hughes. On 10 January 2002 each of the Tongues was convicted at Bromsgrove and Redditch Magistrates Court, on the prosecution by the Council, of the offence, contrary to s. 1 of the Protection of Animals Act 1911 ("the 1911 Act"), of causing unnecessary suffering to four of their cattle. They were fined and in addition each was disqualified under s. 1 of the Protection of Animals (Amendment) Act 1954 ("the 1954 Act") from having custody of animals (other than cats and dogs) for the rest of his life, but that order was stayed pending the appeal. That appeal was dismissed by the Crown Court on 23 December 2003. On 30 October 2002, again on the prosecution of the Council, each of the Tongues was convicted at the same court of the offence of causing unnecessary suffering to between six and nine further cattle, and each received a disqualification order for life. That order was suspended but the suspension expired on 27 November 2002. Again the Tongues appealed. Again the Crown Court dismissed the appeal on 23 December 2003. Officers of the Council's Trading Standards Services have visited the Tongues' farms on a number of occasions since 27 November 2002. As a result of what they saw the Council commenced two sets of proceedings. By the first, the Tongues were brought back before the Magistrates Court for failing to comply with the disqualification orders. On 30 April 2003 each of the Tongues was convicted. David Tongue was imprisoned for 12 weeks, Stephen Tongue for six weeks and Lionel Tongue was given a suspended prison sentence of 12 weeks. By the second, the Council on 21 March 2003 commenced civil proceedings in the Chancery Division, Birmingham District Registry. The Council pleaded that it was responsible for maintaining the welfare of animals in Worcestershire, and it pleaded the convictions obtained on 10 January and 30 October 2002 and the disqualification orders. It also averred that the Tongues continued to keep animals and had refused to give up any of them and that many of the animals in the keeping of the Tongues were in such condition that they were suffering unnecessarily. The relief sought was an injunction to permit the Council to remove the animals from the care of the Tongues, together with such ancillary orders as might be necessary for that purpose. The Council applied for interlocutory relief until the disposal of the action. That without notice application came before Judge Norris on 27 March 2003. He made an order until 31 March 2003 which included that (1) the Council was permitted to enter onto the land of the Tongues for the purpose of removing livestock; (2) the Council was permitted to remove livestock from the land of the Tongues and to place that livestock with a competent owner; (3) the Tongues were forbidden from obstructing the removal of the livestock; and (4) the Tongues were forbidden from interfering with the keeping at a different location of livestock removed from their premises. There was a with notice hearing of the application on 31 March. The Tongues in effect conceded that the cattle at Crumpfields, White House and Boxnott Farms were in their custody in breach of the disqualification orders. There was produced to Judge Norris what Neuberger J. was to describe as cogent evidence that the cattle were in a sorry state. However the Tongues did not accept that the cattle at Emmerdale, Pump House and Inkberrow Farms were in their custody or ownership and so Judge Norris directed that the Council's claim in respect of those cattle should be heard at the trial. He made an order limited to those cattle in form similar to the order made on 27 March save that he included an injunction forbidding the Tongues from keeping or being involved in the keeping of any livestock at Inkberrow, Emmerdale or Pump House Farms. The action was tried by Neuberger J. with witnesses giving oral evidence. On 6 August 2003 he gave judgment. He held that the cattle at Emmerdale, Pump House and Inkberrow Farms were kept in breach of the disqualification orders, one or more of the Tongues having custody of the cattle. He also held that none of the cattle was truly transferred to Ms. Green and that the purported transfer was "a put-up job". But on the question whether the court had jurisdiction to make the order sought by the Council, the judge, after reviewing the authorities, held that the court had no jurisdiction. He said that he would have jurisdiction to grant an injunction restraining the Tongues from having custody of any animals and in particular the cattle the subject of the action. However, he continued (in para. 71 of his judgment): "Nevertheless, in this case the Council is seeking more than an order enjoining the defendants from having custody of animals. It is seeking an order entitling agents of the Council to go onto the defendants' land and remove their cattle. The fact that although the defendants may be committing an offence in that they are in breach of the order forbidding them to have custody of any animals, it remains the fact that the cattle are on the defendants' land and are the property of the defendants. In my view, in the absence of the Council having some sort of right in respect of the cattle, whether under the Animals Acts, the order of the Magistrates Court, or on some other basis, there is simply no power in this court to order the cattle, which are the property of the defendants and on their land, to be taken into possession of a third party, even if it is the Council." The judge also considered the Council's argument that as a result of general powers and duties as a local authority with regard to animals and in the light of the disqualification orders it had sufficient power and duty in relation to any cattle in the custody of the Tongues to justify its present claim. However, after reviewing the authorities, the judge said that the claimant had to establish some sort of right or duty in respect of or over the property sought to be made the subject of injunctive relief. In the present case, the judge was of the view that the Council's power as a prosecutor for an offence under the 1911 Act had to be governed by the statutory provisions. He rejected an argument for the Council that it could rely in this area on an implied right or duty to take in abandoned animals and to treat them appropriately. He did not think that a contention that an animal in the custody of a disqualified person should be treated as constructively abandoned could be justified without statutory authority. He said (in para. 82) about the Protection of Animals Acts: "Those Acts contain their own remedies, and provide for circumstances in which the prosecutor or anyone else can go onto the defendant's land and take possession of animals. If those remedies or circumstances are inadequate in some way, it is for the legislature to put right any deficiency, and not for the civil courts to do so. It is one thing to say that the powers of the civil courts can be invoked to enforce the criminal law. It is quite another to suggest that the powers of the civil courts can be invoked to make good gaps in the criminal law." The judge expressed the view that he should not order the return of the cattle removed by the order of Judge Norris as that would mean that the court would be sanctioning the commission of an offence while the disqualification order stood. However, he considered that Judge Norris was entitled to make the order which he did. In case he was wrong on the issue of jurisdiction, Neuberger J. considered the exercise of his discretion. He concluded that it would have been appropriate to exercise his discretion in favour of the Council, because (a) the Tongues continued to have the custody of the cattle at Crumpfields, White House and Boxnott Farms in plain breach of the disqualification orders, (b) the Tongues were determined to do all they could to retain custody of the cattle, (c) most of the cattle had suffered significantly in the past, and (d) by making the order sought the court would not be imposing any onerous liability on the Tongues. However, because of his conclusions on jurisdiction the judge dismissed the Council's claim. He gave permission to appeal. He also gave liberty to the Tongues to apply to the court for directions as to the disposition of the animals the subject of the order of Judge Norris in the event, so far as relevant, of any appeal being dismissed by this court and of this court making no order or directions as to the disposition of those animals. The statutory provisions It is convenient at this stage to consider the statutory provisions relevant to this case. S. 1 (1) of the 1911 Act provides what conduct constitutes an offence of cruelty, conviction for which can lead to a sentence of imprisonment not exceeding six months or to a fine not exceeding level 5 on the standard scale or both. That conduct includes: "If a person – (a) …. shall cause or procure …. or shall, by wantonly or unreasonably doing or omitting to do any act, or causing or procuring the commission or omission of any act, cause any unnecessary suffering or, being the owner, permit any unnecessary suffering to be so caused to any animal". The criminal court is given power by s. 2 to order the destruction of the animal whose owner is convicted of cruelty to the animal if certain conditions are satisfied, and by s. 3 to deprive a person, convicted of cruelty to the animal, of its ownership and to make such order as to its disposal as the court thinks fit. A significant extension of the powers of the criminal court, when an owner has been convicted of cruelty to any animal under the 1911 Act, was made by the 1954 Act. By s. 1 (1) it was provided that on such conviction the court might, in addition to or in substitution for any other punishment, order the owner to be disqualified for such period as it thinks fit from having custody of any animal, or any animal of a kind specified in the order. S 1 (3) provides for the removal of the disqualification on application to the court by the disqualified person. By s. 2 of the 1954 Act: "2 Breach of disqualification order If a person has custody of any animal in contravention of an order made under this Act, he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale or to imprisonment for a term not exceeding three months or to both such fine and imprisonment." A further significant extension of the powers of the criminal court has recently been effected by the Protection of Animals (Amendment) Act 2000 ("the 2000 Act"). By s. 1 (1) ss. 2 to 4 are to apply where a person mentioned in s. 1 (3) and referred to as "the prosecutor" has brought proceedings for an offence under s. 1 of the 1911 Act against the owner of the animals to which the offence relates and the proceedings are still current. S. 1 (3) includes among the potential prosecutors "(d) a local authority". By s. 2 (so far as is material): "Orders for the care, disposal or slaughter of animals (1) If, on the application of the prosecutor, it appears to the court from evidence given by a veterinary surgeon that it is necessary in the interests of the welfare of the animal in question for the prosecutor to do one or more of the things mentioned in subsection (2), the court may make an order authorising him to do so. (2) Those things are – (a) taking charge of the animals and caring for them, or causing or procuring them to be cared for, on the premises on which they are kept or some other place; (b) selling the animals at a fair price; (c) disposing of the animals otherwise than by way of sale; (d) slaughtering the animals, or causing or procuring them to be slaughtered. (3) In determining what to authorise by the order, the court must have regard to all the circumstances, including the desirability of protecting the owner's interest in the value of the animals and avoid increasing his costs." By s. 3: "Powers of entry, etc (1) Where – (a) the prosecutor has given notice to the court of his intention to apply for an order under section 2; and (b) he is of the opinion that the animals need to be marked for identification purposes, the prosecutor, or a person authorised by him, may enter the premises on which the animals are kept and mark them for those purposes. (2) Where an order is made under section 2, the prosecutor, or a person authorised by him, may – (a) enter the premises on which the animals are kept for the purpose of exercising the powers conferred by the order; (b) mark the animals (whether by the application of an ear tag or by any other means); and (c) in the case of an order making any provision mentioned in section 2(2)(a), make use for that purpose of any equipment on the premises. (3) Any person who obstructs the prosecutor, or a person authorised by him, in the exercise of powers conferred by subsection (1) or (2) or an order under section 2 is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale. (4) Nothing in this section authorises a person to enter a dwellinghouse. (5) A person entering any premises in the exercise of powers conferred on him by this section must, if so required by the owner or occupier or person in charge of the premises – a) produce to him some duly authenticated document showing that he is, or is a person authorised by, the prosecutor; and (b) state in writing his reasons for entering." Thus Parliament has laid down in some detail the circumstances and the manner in which a power of entry onto the land of the owner may be exercised. Local authorities are given further functions by the Agriculture (Miscellaneous Provisions) Act 1968 in relation to the welfare of livestock. S. 1 (1) of the Act makes it an offence for any person to cause unnecessary pain or distress to any livestock for the time being situated on agricultural land and under his control or to permit any such pain or distress of which he knows or may reasonably be expected to know. By s. 2 (1)(b) the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland are empowered to make regulations for ensuring (amongst other things) the provision of balanced diets for livestock. By s. 6 (2) a person duly authorised in writing by a local authority may at any reasonable time enter upon any land other than a dwellinghouse for the purpose of ascertaining whether an offence, consisting of a contravention of or failure to comply with provisions or regulations made pursuant to s. 2 (1)(b), has been committed on the land. We are told that local authorities frequently act as prosecutors in respect of offences under this Act. The power of a local authority to prosecute or defend legal proceedings is now contained in s. 222 of the Local Government Act 1972 ("the 1972 Act"). This provides (so far as material): "(1) Where a local authority consider it expedient for the promotion or protection of the interests of the inhabitants of their area – (a) they may prosecute or defend or appear in any legal proceedings and, in the case of civil proceedings, may institute them in their own name". Finally, I should refer to s. 37 of the Supreme Court Act 1981 ("the 1981 Act") which, so far as material, provides: "(1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so. (2) Any such order may be made either unconditionally or on such terms and conditions as the court thinks just." The arguments on this appeal Before this court Mr. Roger Henderson Q.C., who did not appear below, appears with Mr. David Watson, who did, for the Council. Lionel and Stephen Tongue appear in person. Mr. T. J. Clarke appears for David Tongue. Mr. Henderson submits that Neuberger J. was wrong to conclude that the court had no jurisdiction to grant the order sought. He argues that it has such jurisdiction by reason of the fact that s. 222 (1)(a) of the 1972 Act allows the Council, which considers it expedient for the promotion or protection of the interests of the inhabitants of its area, to bring these proceedings. Further, he argues that, quite apart from s. 222, the Council as a local authority with the duty of enforcing the law on animal welfare, has a sufficient right or interest to obtain relief from the civil courts to enforce compliance with the criminal law relating to the protection of animals. Under both heads he relies on the width of the language of s. 37 of the 1981 Act as to the relief which the court can grant. Mr. Clarke submits that Neuberger J. was right for the reasons which he gave. He says that it is not the role of the civil courts to do what a criminal court has not done. He points to the unprecedented width of the order sought, contrasting that with the negative injunctions which have previously been granted in the decided cases. Lionel and Stephen Tongue also addressed us. They supported what Mr. Clarke said, but they made clear their strong dissatisfaction with the orders made in the criminal proceedings and by Judge Norris as well as the decision of Neuberger J. on their custody of the cattle at Crumpfields, Boxnott and White House Farms. Lionel Tongue told us that he regarded the cattle as pets. They deny any cruelty to any of the cattle. I am afraid that much of what they had to say does not bear on any of the points which we have to decide. There is no appeal or cross-appeal from the factual findings of the judge. All that we are concerned with is the issue of jurisdiction. Discussion I start with the order sought. That is in the following form: "1. The Defendants and each of them permit the servants and agents of the Claimant, and such other persons as the Claimant shall authorise to do so, to enter upon and remain upon the land of the Defendants or any of them, for the purpose of removing livestock from the said land. 2. The Defendants and each of them be forbidden, whether by themselves or by instructing, permitting or encouraging others, from obstructing any servant or agent of, or person authorised by the Claimant from removing livestock from any land of the Defendants or any one of them. 3. The Claimant is permitted, whether by its servants, or agents or by any persons authorised by it, to remove any livestock from the land of the Defendants or any one of them, and to enter upon the land of the Defendants or any of them, for that purpose. 4. The Claimant is permitted to destroy such animals which, in the genuine belief of the Claimant's servants, agents or professional advisers, are unfit for transportation or those which cannot be transported on health and safety grounds. 5. The Claimant take any livestock removed in accordance with paragraph 3 of this order to a place where it is reasonably practicable that the welfare of that livestock should be assured. 6. The Claimant, whether by its servants, or agents or by any persons authorised by it, upon the removal of the livestock in accordance with paragraph of this order will have day to day care and custody of the livestock. 7. The Claimant is permitted to destroy such animals of the livestock removed in accordance with paragraph 3 of this order as, in the genuine belief of the Claimant's servants, agents or professional advisers, ought to be destroyed in order to prevent these animals' unnecessary suffering. 8. Upon taking custody of the animals the Claimant may: (a) sell the animals or any of them for a fair price (b) dispose of the animals or any of them otherwise than by way of sale (c) slaughter the animals or any of them in accordance in each case with reasonable farming practice." This is not the conventional form of an injunction in aid of the criminal law such as the courts used to grant to enforce compliance with the laws on Sunday trading contained in the Shops Act 1950. Such injunctions were to restrain trading in breach of that Act. The form of the order sought contains nothing comparable. True it is that it commences in para. 1 with a mandatory order requiring the Tongues to permit the Council entry on their land and in para. 2 an order prohibiting the Tongues obstructing the Council from removing livestock. But those paragraphs are ancillary to paragraph 3 which is intended to confer permission on the Council to effect the removal of the cattle and the remaining paragraphs are intended to allow the Council to deal with the cattle so removed. The orders sought borrow heavily from the provisions of ss. 2 and 3 of the 2000 Act, but go beyond what the criminal court may grant under those sections, because the orders sought are not limited to the animals cruelty to which has been found perpetrated by the owners in a successful prosecution under the 1911 Act (see Cornwall County Council v Baker [2003] 2 All ER 178, a decision of Toulson J., the correctness of which was accepted by Mr. Henderson). Thus despite the significant further extension of the powers of the criminal court in this area by the recent 2000 Act, he is asking a civil court to go well beyond what the criminal court is now authorised to do. Parliament in the 2000 Act did not extend the sanctions imposed by s. 3 of the 1954 Act for breach of a disqualification order. That is an unpromising background against which to ask the court to make the order, and there come to my mind the cautionary words of Hoffmann J. in Chief Constable of Leicestershire v M [1989] 1 WLR 20 ("Leicestershire") at p. 23 (referring to statutory provisions conferring powers on criminal courts in respect of suspected proceeds of crime): "The recent and detailed interventions of Parliament in this field suggest that the courts should not indulge in parallel creativity by the extension of general common law principles." For my part I readily accept that by s. 222 of the 1972 Act Parliament has given local authorities a special status to bring proceedings in their own name, thereby overcoming the difficulties which existed at common law in bringing civil proceedings in aid of public law. The Shops Act cases and in particular Stoke-on-Trent Council v B & Q Ltd. [1984] AC 754 confirm that that is so, although Lord Templeman emphasises at p. 776 the reluctance with which local authorities should seek, and the courts should grant, an injunction which if disobeyed may involve the infringer in sanctions more onerous than the penalty imposed for the offence. Lord Templeman, quoting the words of Lord Wilberforce in Gouriet v Union of Post Office Workers [1978] AC 435 at p. 481 on the exceptional nature of the power to invoke the assistance of the civil courts in aid of the criminal law, said that there must be something more than infringement before the assistance of civil proceedings can be invoked and accorded for the protection or promotion of the interests of the inhabitants of the area. Mr. Henderson rightly accepts that and points to the repeated criminal orders obtained and to the injunction granted by Judge Norris but not obeyed by the Tongues. Mr. Henderson also draws attention to the fact that s. 222 has been used by local authorities to obtain injunctions from civil courts in circumstances other than the flouting of the Sunday trading laws, for example, to restrain nuisance by noise, breaches of town and country planning laws and of a tree preservation order. I agree that there is jurisdiction for the civil courts to grant an injunction at the suit of a local authority acting pursuant to s. 222 to restrain a breach of the criminal law, but it does not follow that the court has jurisdiction to grant the local authority any order which is intended to prevent the continuation of a breach of the criminal law, even though the local authority brings the proceedings on the basis that it considers that to be expedient for the promotion or protection of the interests of the inhabitants of its area. That must depend on the terms of the order sought. An injunction restraining continuation of the breach is one thing. It is quite another to grant an order to remove cattle belonging to others from land belonging to others and to seek ancillary orders such as one requiring the owners to permit the Council entry on their land and to deal with cattle as the Council thinks appropriate. What confers on the Council such rights, when Parliament has allowed the criminal court to give the prosecutor many rights but not those sought in the present circumstances? Whilst accepting that a local authority has functions in the area of animal welfare, I do not accept that the functions, which are spelt out by statute, go as far as to cover what the Council now seeks from the court. Mr. Henderson submits that the question for the court is not one of jurisdiction but of discretion, and he relies on remarks made in this court in Broadmoor Special Hospital Authority v Robinson [2000] QB 775. In that case the defendant, who after conviction for manslaughter had been ordered to be detained in a special hospital, wrote a book in which he identified and wrote about other patients. The hospital authority obtained ex parte injunctions restraining the posting of the book to others with specific exceptions and requiring the delivery of the book. On the defendant's application the injunctions were discharged. On appeal by the hospital authority this court (Lord Woolf M.R. and Waller L.J., Morritt L.J. dissenting) held that it had jurisdiction, on the hospital authority's application, to grant an injunction to prevent interference with its performance of its public responsibilities, and that the court, exercising its power under s. 37 of the 1981 Act, should grant such an application when it appears to the court to be just and convenient so to do. However, this court unanimously found that the activity of the defendant did not amount to an interference with the performance of the hospital authority's public responsibilities and so the appeal was dismissed. A feature of the statutory regime relating to the functions of the hospital authority was the power in s. 134 Mental Health Act 1983 giving it specific power to seize postal packets addressed to any person by a detained patient if it considered the package likely to cause distress or danger, and Mr. Henderson drew our attention to the comment of Lord Woolf at p. 789, "I regard the existence of the power under s. 134 …. as being relevant to discretion and not jurisdiction." I am not able to derive assistance from the Broadmoor case for the resolution of the issue in the present case, so very different are the circumstances, including the statutory regime, of that case from those in the present case. There is no question, to my mind, of interference by the Tongues with the performance by the Council of its public responsibilities. They have not complied with the disqualification orders or with Judge Norris' injunction, but the Council has been able to perform its public responsibilities, even though the steps it has taken have not yet produced the desired result. The Council could have taken further measures, such as by taking the Tongues back to the civil court to obtain sanctions for the disobedience to the injunction of Judge Norris by contempt proceedings and by asking for sequestration, but it has chosen not to do so. In any event, unlike the relief sought in the Broadmoor case, the primary relief sought in the present case is not an injunction restraining the keeping of cattle by the Tongues but authority to permit the Council to remove cattle from the Tongues' land and accompanying directions. I conclude that Neuberger J. was right to hold that s. 222 does not confer jurisdiction on the court to grant the relief sought by the Council. I turn therefore to the alternative argument of Mr. Henderson that independently of s. 222 the Council has a sufficient right or interest to obtain the orders sought through its function of enforcing the law on animal welfare. He drew our attention to the celebrated remarks of Lord Diplock in The Siskina [1979] AC 210 at pp. 256, 7 that the applicant for an injunction must assert some legal or equitable right which he asks the court to protect. Mr. Henderson argued that that comment made in a case involving a private law dispute does not provide an exhaustive definition of the circumstances in which the court has jurisdiction to grant an injunction. He referred to South Carolina Insurance Co. v Assurantie NV [1987] AC 24 at pp. 39, 40 where Lord Brandon considered whether the circumstances of that case were such as to give the court power to grant an injunction at all, and stated certain basic principles governing the grant of an injunction. The first was that the power to grant an injunction was statutory (s. 37 of the 1981 Act). The third related to injunctions to restore proceedings in a foreign court, with which we are not concerned. The second was this: "The second basic principle is that, although the terms of section 37 (1) of the Act of 1981 and its predecessors are very wide, the power conferred by them has been circumscribed by judicial authority dating back many years. The nature of the limitations to which the power is subject has been considered in a number of recent cases in your Lordships' House: Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210; Castanho v. Brown & Root (U.K.) Ltd. [1981] A.C. 557; and British Airways Board v. Laker Airways Ltd. [1985] AC 58. The effect of these authorities, so far as material to the present case, can be summarised by saying that the power of the High Court to grant injunctions is, subject to two exceptions to which I shall refer shortly, limited to two situations. Situation (1) is when one party to an action can show that the other party has either invaded, or threatens to invade a legal or equitable right of the former for the enforcement of which the latter is amenable to the jurisdiction of the court. Situation (2) is where one party to an action has behaved, or threatens to behave, in a manner which is unconscionable." At p. 41 Lord Brandon refused to define unconscionable conduct but said that it included conduct which is oppressive or vexatious or which interferes with the due process of the court. As I read those remarks of Lord Brandon, he was supporting what Lord Diplock had said but extending the circumstances apt for the grant of an injunction to include unconscionable behaviour. Mr. Henderson made the bold submission that the Tongues by their behaviour were behaving unconscionably and that this gave the court jurisdiction to grant an injunction. I am afraid that I regard that submission as fanciful. I cannot believe that Lord Brandon was using the term unconscionable, which to equity lawyers has a connotation far removed from mere breaches of the criminal law, to cover the present circumstances. It appears from Lord Brandon's remarks at p. 41 that he had in mind some procedural misbehaviour by a party to proceedings. The real question under this head is whether the Council has a sufficient interest in the subject matter of the order sought such as would enable the court to have jurisdiction to grant the relief claimed. In this context we were referred to the decisions of this court in Chief Constable of Kent v V [1983] QB 34 ("Kent") and Chief Constable of Hampshire v A Ltd. [1985] QB 132 ("Hampshire"). The former case has caused difficulty because it was decided by a majority (Lord Denning M.R. and Donaldson L.J., Slade L.J. dissenting) and it is not easy to discern a single underlying ratio in the majority judgments. However the interpretation by Oliver L.J. in Hampshire of the earlier decision has won general acceptance. Oliver L.J. said at p. 137: "Both Lord Denning M.R. and Donaldson L.J. were, however, agreed to this extent, that jurisdiction to grant an injunction on the application of the Chief Constable in that case existed only if he could be found to have a sufficient interest in making the application, and they appear broadly to have been in agreement as to the foundation of the interest which they held to exist and to be sufficient. That was found to be in the duty of the Chief Constable to seize and detain goods stolen or unlawfully obtained and to restore them to their true owner, a similar duty being applied by analogy to intangible assets such as a credit in a bank account." Clearly Kent shows that a type of interest different from a legal or equitable right can be enough for an applicant to obtain an injunction. But courts subsequent to the Kent decision have not been prepared to extend the applicability of the principle which it decided more widely (consider, for example, Hampshire and Leicestershire). Further the relief granted in Kent was an injunction to restrain the disposal of the assets in question. I cannot see how this line of authority avails the Council in the present case. Whilst fully accepting that local authorities have powers and duties to enforce the law relating to animal welfare, the problem for the Council remains that it is not seeking mere injunctive relief to restrain the breach of the disqualification order but it is asking for authority to remove animals belonging to others from land belonging to others. Under the existing statutory provisions the Council does not have a sufficient interest to obtain that relief. Conclusion In truth what the Council is doing is to point to deficiencies in the present criminal law and to ask the court to make an order overcoming those deficiencies. I do not doubt that local authorities have real problems when disqualified defendants continue to keep custody of animals and I have sympathy with the Council, but I do not accept that this court has jurisdiction to make the order which it seeks. I prefer not to comment on whether the Council can invoke the assistance of the civil courts in other ways such as by seeking a receivership as was mentioned in argument. What is to happen to the cattle removed pursuant to Judge Norris' order is not a question raised on this appeal. I have already noted the liberty given to the Tongues in Neuberger J.'s order. I would be prepared to grant an injunction to restrain the Tongues from having custody of any livestock on the basis that this court does have jurisdiction to make such an order and that it is just and convenient to do so. Mr. Clarke indicated that David Tongue would accept the making of that order. But beyond that I would not go. For the reasons which I have endeavoured to express in this judgment I would dismiss the appeal. Lord Justice Chadwick : This is an appeal from the refusal of Mr Justice Neuberger to make an order in the form which is set out at paragraph 28 of the judgment of Lord Justice Peter Gibson. The judge held that he had no jurisdiction to make an order in that form. In my view he was correct to reach that conclusion, for the reasons which he gave and which Lord Justice Peter Gibson has expanded and endorsed. It follows that I, too, would dismiss this appeal. The respondents are each the subject of disqualification orders made under section 1(1) of the Protection of Animals (Amendment) Act 1954. The disqualification orders require that none of the respondents have custody of any animal (other than a cat or dog). I would accept – as the judge accepted (at paragraph 70 of his judgment) – that a civil court has power, in aid of the criminal law, to make an order by way of injunction in the same terms; that is to say, to grant an injunction restraining each defendant from having custody of cattle or other farm animals. I agree with Lord Justice Peter Gibson that this is a case in which it might well have been just and convenient to grant an injunction in those terms. But that is not the order which the appellant local authority has sought. It would have been open to the local authority, at a time when proceedings leading to the disqualification orders were pending, to seek orders under section 2 of the Protection of Animals (Amendment) Act 2000. As Lord Justice Peter Gibson has pointed out, orders under section 2 of that Act would have enabled the local authority to do – in relation to "the animals in question" – most, if not all, of what it seeks powers to do in the present proceedings. Paragraphs 5, 6 and 7 of the order sought in these proceedings are encompassed within section 2(2)(a) of the 2000 Act; and paragraph 8 of the order sought is in terms which are indistinguishable from those of section 2(2)(b) to (d) of that Act. And, for my part, I would accept that, if an order under section 2 of the 2000 Act had been made against the respondents, the civil court would have had power to grant an injunction in terms which enabled that order to be enforced by civil remedies. In those circumstances the civil court might well have made an order in the terms sought in the present case; but with one important qualification. An order under section 2 of the 2000 Act would be made, if at all, in relation to the "animals in question"; that is to say, in relation to the "animals to which the offence relates" – see section 1(1)(a) of that Act. In that context "the offence" is the offence in respect of which the proceedings leading to the disqualification orders were brought – see section 1 of the Protection of Animals Act 1911, section 1(1) of the 1954 Act and section 1(1)(a) of the 2000 Act. As Mr Justice Toulson pointed out in Cornwall County Council v Baker [2003] 2 All ER 178 – a decision which the appellant does not challenge – the only animals in relation to which an order can be made under section 2(2) of the 2000 Act are the animals which are said to have been treated cruelly in the context of proceedings under section 1 of the 1911 Act. It would not have been possible for the criminal court to make an order under section 2(2) of the 2000 Act in relation to "any livestock [on] the land of the Defendants or any of them" unless it had been established, to the standard of proof applicable in criminal proceedings, that all animals then on the defendants' lands had been treated cruelly within the meaning of section 1 of the 1911 Act. It appears that the local authority did seek and obtain orders under section 2(2) of the 2000 Act at the time when the proceedings leading to the disqualification orders made on 30 October 2002 were pending. But it must be assumed that, in order to obtain those orders, the local authority did not need to establish (and did not establish) that all animals then (or now) on the defendants' lands had been treated cruelly within the meaning of section 1 of the 1911 Act. What it needed to establish, for that purpose, was that there were grounds to think that the animals which were the subject of those proceedings had been treated cruelly. It must be open to doubt whether it could have established more. The order which Mr Justice Neuberger was asked to make is not an order in aid of the criminal law. It is an order which goes beyond what the criminal court was asked to do; and (as it seems to me) beyond what the criminal court could have been asked to do. And, given that proceedings under section 1 of the 1911 Act are no longer pending, it goes beyond what the criminal court could now be asked to do, without a further charge of cruelty being made. As the judge put it, at paragraph 82 of his judgment: "It is one thing to say that the powers of the civil courts can be invoked to enforce the civil law. It is quite another to suggest that the powers of the civil courts can be invoked to make good gaps in the criminal law." Although I am in no doubt that, in seeking the order which it now pursues, the local authority is asking the civil court to take a step too far, the defendants should not be encouraged to think that the disqualification orders made in 2002, and confirmed on appeal on 23 December 2003, can be flouted. They have already been convicted and sentenced to imprisonment, under section 2 of the 1954 Act, for failure to comply with those orders. It has not been suggested that further criminal proceedings could not be brought for further breaches of the disqualification orders. And, as Lord Justice Peter Gibson has pointed out, the local authority could seek an injunction from the civil court restraining the defendants from having custody of any animal in breach of those orders. I do not accept that, if such an injunction were granted, the civil court would be powerless to enforce it by appropriate sanctions, including committal and sequestration; nor that, if an order for sequestration were made, it might not confer on sequestrators the powers which the local authority now seeks. But, before a party is exposed to those sanctions, he is (save in exceptional cases) entitled to the protection of procedural safeguards. I reject the suggestion, implicit in the submissions made on behalf of the local authority that, if this appeal is dismissed, the Court will be condoning the continued ill-treatment of farm animals. I am satisfied that the civil court has powers to ensure compliance with disqualification orders made under section 1 of the 1954 Act. It is for the local authority to invoke those powers (if it thinks fit) in the manner for which the Civil Procedure Rules provide. It has not yet chosen to do so. Sir Martin Nourse: For the reasons given by Lords Justices Peter Gibson and Chadwick, I agree that the appeal should be dismissed. The essence of the matter is that the Council seek relief, not only in respect of "the animals in question" within section 2(1) of the Protection of Animals (Amendment) Act 2000, i.e. "the animals to which the offence [of cruelty under section 1 of the Protection of Animals Act 1911] relates" (see section 1(1)(a) of the 2000 Act), but also in respect of livestock on the defendants' land in relation to which no offence has been established in criminal proceedings. Livestock falling into that category cannot be made the subject of an order under section 2(2) of the 2000 Act. So the Council is seeking relief, not in aid of the criminal law, but, as Mr Justice Neuberger said, to make good gaps in that law. That is relief which no civil court can grant, and no authority cited is to the contrary.

AFTAB ALAM, J. This is the plaintiffs appeal arising from a suit for permanent injunction based on allegations of infringement of its registered trade mark. The appellant is a companypany incorporated and registered under the Companies Act. The case of the appellant is that from the year 1945 it is engaged in the business of manufacture and sale of high grade companyonut oil used for companyking as well as manufacturing of various toilet products under the distinctive trade mark Shalimar. The appellant claims to be the registered owner of the trade mark Shalimar in Class 03 in respect of companyonut hair oil and in Class 29 in respect of all edible oils included in that class. Alleging that the respondents were marketing their product in infringement of its registered trade mark, the appellant filed a suit OS No.1 of 1995 before the Third Additional Chief Judge, City Civil Court, Hyderabad, seeking permanent injunction restraining the defendants from marketing or offering for sale edible oil products bearing the name Shalimar on companytainers, labels or wrappers, or using any name identical or deceptively similar to the appellants trade mark. In companyrse of the trial, the appellant produced before the companyrt photocopies of registration certificates under Trade and Merchandise Marks Act, 1958 along with the related documents attached to the certificates. The photocopies submitted by the appellant were marked by the trial companyrt as Exs.A1-A5, subject to objection of proof and admissibility. At the companyclusion of the trial, the companyrt dismissed the suit of the appellant by judgment and order dated September 28, 1998 inter alia holding that the available evidence on record did number establish the case of the plaintiff and there was numberprima facie case in favour of the plaintiff number the balance of companyvenience was in favour of the plaintiff. The trial companyrt arrived at its findings mainly because the appellant did number file the trade mark registration certificates in their original. In that companynection, the trial companyrt made the following observations All the above documents i.e. Ex.A1-A5 are marked subject to objection of proof and admissible sic admissibility and also mention so in the deposition of PW1. PW1 is his crossexamination has admitted that all the above documents are xerox companyies. He has also admittedly number filed legal certificate for the same. Sec.31 of Trade and Merchandise Marks Act, 1958 specifically reads as follows Sec.31 1 In all legal proceedings relating to a trade mark registered under the Act, the original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be prima facie evidence of the validity thereof. Therefore the plaintiff has to file the original of the registration or the certified companyies thereof. Exs.A1-A4 are xerox companyies. It is well settled law that xerox companyies are number admissible in evidence. Once those documents are number held admissible, the plaintiff cannot be permitted to rely on it. These documents Ex.A1-A4 are basic documents of Trade Mark and Merchandise Act. Against the judgment and decree passed by the trial companyrt, the appellant filed appeal CCC Appeal No.17 of 1999 before the Andhra Pradesh High Court. In that appeal, the appellant also filed an application under Order 41, Rule 27 CMP No.2972 of 2000 for accepting the originals of the trade mark registration certificates and the allied documents of which Xerox companyies were filed before the trial companyrt as additional evidence. A learned single judge of the High Court took up the application for additional evidence along with the hearing of the appeal. He allowed the application and, together with it the appeal, setting aside the judgment and decree passed by the trial companyrt and allowing the appellants suit granting decree of permanent injunction against the defendants respondents. The respondents filed an intra-court appeal LPA No.111 of 2001 against the judgment and decree passed by the single judge. The division bench of the High Court took the view that there was numberoccasion or justification for admitting the original trade mark registration certificates at the appellate stage as additional evidence. Referring to the provisions of Order 41, Rule 27 of the Civil Procedure Code hereafter CPC , the division bench made the following observations In three circumstances production of additional evidence can be allowed by the Appellate Court. Firstly, the Trial Court had refused to admit evidence which ought to have been admitted. Secondly the party who wanted to produce additional evidence had exercised due diligence and such evidence was number within his knowledge or reach during the trial of the suit. Thirdly, the additional evidence can be ordered to be produced if the Court feels that a document was necessary for pronouncing of the judgment. Neither of these three companyditions were satisfied in this case. The original documents were all along in possession of the plaintiff. At numberstage the Trial Court had refused to admit them in evidence. Since the documents were all along in the possession of the plaintiff, therefore he companyld number fill up the lacuna by producing them in the Appellate Court. It may also be necessary to mention that production of these documents and allowing of the application under Order 41, Rule 27 of the Code while disposing of the appeal has also caused a prejudice to the defendants because when the cross-examination of P.W.1 which were number admissible in evidence. Once the original trade mark registration certificates were taken off the record of the case, the appellants suit was bound to be dismissed. And that is how the division bench dealt with the appeal. It allowed the appeal of the defendant-respondent by judgment dated April 25, 2003 setting aside the judgment of the learned single judge and restoring the judgment passed by the trial companyrt. The appellant has number brought this matter in appeal before this Court by grant of a special leave. Mr. P.P. Rao, learned senior advocate, appearing for the appellant assailed both, the procedure adopted by the trial companyrt and the view taken by the division bench of the High Court, on the basis of the provisions of Order 41, Rule 27. Mr. Rao submitted that if the trial companyrt was of the view that the Xerox companyies of the documents in question were number admissible in evidence, it ought to have returned the companyies at the time of their submission. In that event, the appellant would have substituted them by the original registration certificates and that would have been the end of the matter. But once the Xerox companyies submitted by the appellant were marked as exhibits, it had numbermeans to know that while pronouncing the judgment, the companyrt would keep those documents out of companysideration, thus, causing great prejudice to the appellant. Mr. Rao submitted that the provision of Order 13, Rule 4 of CPC provides for every document admitted in evidence in the suit being endorsed by or on behalf of the companyrt, and the endorsement signed or initialed by the judge amounts to admission of the document in evidence. An objection to the admissibility of the document can be raised before such endorsement is made and the companyrt is obliged to form its opinion on the question of admissibility and express the same on which opinion would depend, the document being endorsed admitted or number admitted in evidence. In support of the submission he relied upon a decision of this Court in R.V.E. Venkatachala Gounder vs. Arulmigu Viswesaraswami V.P. Temple and Another, 2003 8 SCC 752 paragraph 20 where it was observed as follows 20 The objections as to admissibility of documents in evidence may be classified into two classesi an objection that the document which is sought to be proved is itself inadmissible in evidence and ii where the objection does number dispute the admissibility of the document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient. In the first case, merely because a document has been marked as an exhibit, an objection as to its admissibility is number excluded and is available to be raised even at a later stage or even in appeal or revision. In the latter case, the objection should be taken when the evidence is tendered and once the document has been admitted in evidence and marked as an exhibit, the objection that it should number have been admitted in evidence or that the mode adopted for proving the document is irregular cannot be allowed to be raised at any stage subsequent to the marking of the document as an exhibit. The latter proposition is a rule of fair play. The crucial test is whether an objection, if taken at the appropriate point of time, would have enabled the party tendering the evidence to cure the defect and resort to such mode of proof as would be regular. The omission to object becomes fatal because by his failure the party entitled to object allows the party tendering the evidence to act on an assumption that the opposite party is number serious about the mode of proof. On the other hand, a prompt objection does number prejudice the party tendering the evidence, for two reasons firstly, it enables the Court to apply its mind and pronounce its decision on the question of admissibility then and there and secondly, in the event of finding of the Court on the mode of proof sought to be adopted going against the party tendering the evidence, the opportunity of seeking indulgence of the Court for permitting a regular mode or method of proof and thereby removing the objection raised by the opposite party, is available to the party leading the evidence. Such practice and procedure is fair to both the parties. Out of the two types of objections, referred to hereinabove in the latter case, failure to raise a prompt and timely objection amounts to waiver of the necessity for insisting on formal proof of a document, the document itself which is sought to be proved being admissible in evidence. In the first case, acquiescence would be numberbar to raising the objection in a superior Court. Learned companynsel companytended that since the procedure followed by the trial companyrt was companytrary to the procedure prescribed by Order 13, Rule 4, in appeal against the trial companyrt judgment, the learned single judge of the High Court was fully justified in accepting the originals of the documents companycerned in evidence and the division bench was number right in holding that the originals of the companycerned documents were wrongly taken in evidence. Mr. Rao submitted that while enumerating the circumstances in which production of additional evidence may be allowed, the division bench overlooked the words or for any other substantial reason at the end of clause b of rule 27 1 . He submitted that those words greatly enlarged the scope of the provision and were especially relevant for a case like the one in hand where the plaintiff had suffered great prejudice due to the incorrect procedure followed by the trial companyrt. In support of his submission he relied upon the decision of this Court in K. Venkataramiah vs. A. Seetharama Reddy Ors., 1964 2 SCR 35 at page 46 . Apart from this, it is well to remember that the appellate companyrt has the power to allow additional evidence number only if it requires such evidence to enable it to pronounce judgment but also for any other substantial cause. There may well be cases where even though the companyrt finds that it is able to pronounce judgment on the state of the record as it is, and so, it cannot strictly say that it requires additional evidence to enable it to pronounce judgment, it still companysiders that in the interest of justice something which remains obscure should be filled up so that it can pronounce its judgment in a more satisfactory manner. Such a case will be one for allowing additional evidence for any other substantial cause under Rule 27 1 b of the Code. Mr. Rao further submitted that the very narrow view of Order 41, Rule 27 taken by the division bench has only led to frustrate the ends of justice. In order to lend strength to his submission, Mr. Rao referred to the illuminating and perennially relevant passage from the judgment of Vivian Bose, J. in Sangram Singh vs. Election Tribunal, Kotah, Bhurey Lal Baya, 1955 2 SCR 1 at page 8 Now a companye of procedure must be regarded as such. It is procedure, something designed to facilitate justice and further its ends number a penal enactment for punishment and penalties number a thing designed to trip people up. Too technical a companystruction of sections that leaves numberroom for reasonable elasticity of interpretation should therefore be guarded against provided always that justice is done to both sides lest the very means designed for the furtherance of justice be used to frustrate it. Mr. P.S. Narasimha, learned senior advocate, appearing for the respondents submitted that in terms of section 31 of the Trade and Merchandise Marks Act, 1958 original registration certificate of the trade mark was the primary evidence in the case instituted by the appellant and in the absence of the original registration certificates brought on record, the only companyrse open to the trial companyrt was to dismiss the suit, which it rightly did. Mr. Narasimha further pointed out that the learned single judge after taking the originals on record, straightaway proceeded to pronounce the final judgment in the appeal even without allowing the defendants respondents an opportunity of rebuttal. The denial of any opportunity of rebuttal of the additional evidence taken by the appellate companyrt caused immense prejudice to the defendants respondents. To an extent Mr. Narasimha is justified in his submission. Having regard to the manner in which the proceedings took place before the trial companyrt, the learned single judge was number unjustified in taking the originals of the certificates of registration as additional documents but the error lay in the fact that the learned single judge allowed the application for taking additional evidence and at the same time proceeded to finally allow the appeal on the basis of the evidence taken by him on record. Alluding to this aspect of the matter, the division bench made the following criticism We have seen that the cross-examination of P.W.1 was very brief and it only related to the fact that the photo stat were being produced. Any good lawyer would do the same thing, but had the original documents been produced, which were admissible in evidence at the time of trial, the cross-examination perhaps would have companyered these documents as well. Once the learned single Judge, had decided to allow the plaintiff to produce the documents, then it was necessary also to provide an opportunity to the defendants to further cross-examine the witness who produced those documents. But we have seen from the judgment of the learned single Judge that the application under Order 41, Rule 27 of the Code was decided along with the appeals itself. On a careful companysideration of the whole matter, we feel that serious mistakes were companymitted in the case at all stages. The trial companyrt should number have marked as exhibits the Xerox companyies of the certificates of registration of trade mark in face of the objection raised by the defendants. It should have declined to take them on record as evidence and left the plaintiff to support its case by whatever means it proposed rather than leaving the issue of admissibility of those companyies open and hanging, by marking them as exhibits subject to objection of proof and admissibility The appellant, therefore, had a legitimate grievance in appeal about the way the trial proceeded. The learned single judge rightly allowed the appellants plea for production of the original certificates of registration of trade mark as additional evidence because that was simply in the interest of justice and there was sufficient statutory basis for that under clause b of Order 41, Rule 27. But then the single judge seriously erred in proceeding simultaneously to allow the appeal and number giving the defendants respondents an opportunity to lead evidence in rebuttal of the documents taken in as additional evidence. The division bench was again wrong in taking the view that in the facts of the case, the production of additional evidence was number permissible under Order 41, Rule 27. As shown above the additional documents produced by the appellant were liable to be taken on record as provided under Order 41, Rule 27 b in the interest of justice. But it was certainly right in holding that the way the learned single judge disposed of the appeal caused serious prejudice to the defendants respondents. In the facts and circumstances of the case, therefore, the proper companyrse for the division bench was to set aside the order of the learned single judge without disturbing it insofar as it took the originals of the certificates of registration produced by the appellant on record and to remand the matter to give opportunity to defendants respondents to produce evidence in rebuttal if they so desired.

JUDGE PURLE: This is an appeal from the refusal of Chief Registrar Baister to annul or rescind bankruptcy orders. The bankruptcy orders were made on 2 March 2012. There are two orders, one against David Webster and the other against his wife Christina Webster. The annulment applications were made on 19 February 2013. It is said that the bankruptcy orders ought never to have been made. The application was therefore made pursuant to section 282(1)(a) of the Insolvency Act 1986 ("the Act"), which reads as follows: "The court may annul a bankruptcy order if it at any time appears to the court- (a) that on any grounds existing at the time the order was made, the order ought not to have been made…" There is a separate ground not relied upon in this case in section 282(1)(b) of the Act, which reads as follows: "... that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court." The reason it is said the orders ought not to have been made is that in each case the petition debt was not, it is said, a liquidated debt and therefore Mr Mackay had no standing to petition. Section 267(2) of the Act provides that a creditor's petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented... "(b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor..." That, therefore, raises an issue as to the status of the petition debt. The petition debt was said in each case to arise out of a document described as a promissory note, which is not (for technical reasons which do not matter) strictly speaking a promissory note in point of law but which nonetheless plainly acknowledged a debt and promised to pay it. The document in question is dated 31 July 2006 and in material part reads as follows: "We David Webster and Christina Webster. Promise to pay to Rupert Mackay [I interpose to say that he was the petitioner and is the respondent to this appeal] (and then his address is given) the sum of £200,000 for value received with interest at the rate of 10 percent per annum on thirty first day of October 2011 (the payment date). You may require repayment in full of the said loan and interest thereon at the rate of 10 percent per annum prior to the repayment date by giving not less than one year's prior written notice to me requiring repayment which notice may be given at any time after the second anniversary of the promissory note. The additional terms attached form part of this agreement." There were attached a number of additional terms, one of which was to secure for Mr Mackay a profit share over and above the 10 percent should that be achieved. It was provided in that connection that no later than 90 days after completion of each accounting year the Websters should arrange for a firm of accountants to produce a set of trading accounts which would enable Mr Mackay's loan profit to be calculated. It is not disputed that the sum of £200,000 was in fact lent, as the document recorded. On 4 August 2008 Mr Mackay requested, in a relatively informal way but clearly enough, repayment under the terms of this document which meant that the debt fell due one year later. The request for repayment also produced a written acknowledgement from the Websters that repayment would be made, hopefully in stages before the repayment date, though the acknowledgement also recognised that market conditions were such that there might be some delay. By a letter dated 23 January 2009 Mr Mackay's solicitors purported to accept the Websters' repudiatory breach of the loan agreement, consisting of their failure to provide accounts. They did, however, also say at the end of the same letter that this was without prejudice to the right to repayment, in accordance with the notice that had already been given. There was a reply from Mr Webster denying breach, but saying "we will settle the promissory note in line with the terms of the agreement and had never had any intention of doing otherwise". There followed a brief correspondence in which the allegation of repudiatory breach was repeated and once more denied. It was reasserted again towards the end of February by Mr Mackay's solicitors and there the matter appeared to rest. The Chief Registrar in his judgment proceeded on the basis that it was strongly arguable that the effect of the petitioner's apparent acceptance of a repudiatory breach was to limit the petitioner to a claim in damages which could not be anything other than a claim for unliquidated damages, even though it was precisely calculable. That point had not been taken previously, when the bankruptcy order was made. On the contrary, Mr Webster on behalf of himself and his wife then clearly acknowledged that the debt was due and their counsel in his skeleton argument described Mr Mackay as being in a position of strength as he had a liquidated debt which was plainly due. In my judgment, there never was anything in the point that the loan agreement was repudiated by the failure to provide accounts. As is well known, not every breach operates as a repudiatory breach. I was referred in this connection to Federal Commerce & Navigation Co Ltd v Molena Alpha Inc [1979] AC 757, in particular the passages starting at 778 onwards in the speech of Lord Wilberforce. Those passages reaffirm in differing language from citations of various judges what is required. A 19th Century formulation was that an intention to abandon and altogether to refuse performance of the contract must be demonstrated. More recently, it has been said that the threatened breach must be such as to deprive the injured party of a substantial part of the benefit to which he is entitled under the contract. The reference there was to threatened breach, because an anticipatory breach was being considered, but the same approach applies in the case of any other breach of contract. The failure to provide accounts (assuming there had been such a failure) could be remedied, or enforced, and would not without more entitle the injured party to treat the contract as at an end. At the very least, a formal demand would be needed, requiring the omission to be remedied within a reasonable time. I need not decide whether even that would be sufficient to make time of the essence, as there was nothing of that sort here. The Websters' position was that no additional profit share was due, and that accounts were pointless. This was not a case where the Websters were refusing to pay an admitted profit share. In my judgment, the failure to provide accounts was obviously not a repudiatory breach in the circumstances. Moreover, the Websters did not accept that they had been guilty of a repudiatory breach, and both sides, after the spat of correspondence in January and February 2009, proceeded on the basis that the contract was on foot. In particular, there is a letter of 31 July 2009 acknowledging, as it was put, that the loan note was then due. In fact, the sums only fell due for payment a few days later, as perusal of the 31 July 2009 letter, which referred to the previous request of 4 August, effectively recognised. The statutory demands were subsequently made on 13 February 2010. By that date, there were plainly sums due and payable under the so-called promissory note. The Websters (then acting in person) applied to set aside the statutory demands. These applications were withdrawn and a costs order was made against them. Mr Mackay then presented petitions on 18 March 2011, which were opposed. £105,000 was paid by the Websters as admittedly due (including a sum which had been ordered to be paid on account of costs following the withdrawal of the statutory demands). The bankruptcy petitions came on before Registrar Derritt, who handed down a reserved judgment on 2 March 2012, when bankruptcy orders were made. It was not until almost a year later that the applications to annul were made. It appears that within seven days of the bankruptcy orders Mr Webster received an indication that finance to pay off his debts was available from an entity called Gulf Stream, but nothing came of that. The reason, I am told, was that the then intended strategy of seeking an annulment under section 282(1)(b) was frustrated by the activities of a Mr Davies, in circumstances I shall briefly relate. Mr Davies had a judgment against Mr Webster which had been reduced by consent on appeal to a sum just below £44,000 (with a proviso for set-off) and the costs that Mr Webster was ordered to pay. The sum of £100,000, the order recited, had already been paid to Mr Davies in May 2011. It was possible that nothing might on balance be owed. Yet Mr Davies claimed in the bankruptcy the maximum amount of his debt, before the reduction on appeal, and ignoring the set-off. Mr Davies also somehow managed to get himself appointed as trustee, though he resigned shortly afterwards in August 2012 under pressure from creditors, claiming to have run up costs recoupable from the bankruptcy of at least £60,000. Those were his own profit costs, and there were disbursements on top. This undermined the then strategy of the appellants to apply under section 282(1)(b) of the Act to annul the bankruptcy by paying off all the creditors, and costs, with the help of Gulf Stream. I am prepared to accept that this caused them real difficulties, but is irrelevant to the annulment application now made. I have found that there was no repudiation by the Websters of the loan agreement, from which it follows that Mr Mackay's claim was for a liquidated debt which remained substantially due, notwithstanding the payment of £105,000 between the issue of the statutory demand and the making of the petition. Further, even if there was (or was arguably) an accepted repudiation, that would not, on ordinary principles, affect vested rights. In my judgment, Mr Mackay had a vested right to payment at the expiry of 12 months by virtue of the service of his notice on 4 August 2008. A present right to future payment in not in my judgment transformed into a claim for damages upon acceptance of a repudiatory breach. Even if there had not been such a demand in August 2008, the vested right would have been for payment by (at the latest) the payment date of 31 October 2011 stipulated in the so-called promissory note. As the statutory demand pre-dated that date, it would not be appropriate to rely upon that vested right as a debt which could then be demanded. However, the note of 4 August 2008 was sufficient to trigger the right to payment one year later, so no repudiation in the meantime could take that right away. I asked the Websters' counsel if he could point to any case where repudiation had turned what was at inception a loan into a claim for damages and he could not. He merely referred me, quite properly, to statements of principle found in cases such as Moschi v Lep Air Services Ltd [1973] AC 331 and McGuiness v Norwich and Peterborough Building Society, [2012] 2 BCLC 233, both cases on guarantees. In my judgment a debt, including one payable at a future date, remains a debt following repudiation. This is not a case like Hope v Premierspace (Europe) Ltd [1999] BPIR 695, where the claim was a to compensate the aggrieved party for loss suffered by that party, which was characterised as unliquidated even though that loss could be precisely calculated down to the last penny. This is not and never was a compensation claim. It is and was a claim in debt. It follows that it cannot in my judgment be said that the bankruptcy orders should not have been made. The appeal must therefore be dismissed as the condition for the exercise of the power to annul under section 282(1)(a) was not met. This is not, as it happens, the basis upon which the Chief Registrar dealt with the case, though the point was raised by a respondent's notice. As I have said, he proceeded on the basis that it was strongly arguable that Mr Mackay's remedy was for damages only, meaning that the debt was unliquidated. He instead went on to reject the annulment applications on discretionary grounds. Although I have decided the annulment appeal on a different basis, the way in which the registrar exercised his discretion is still relevant to the alternative claim for rescission under section 375 of the Act. Section 375(1) provides as follows: "Every court having jurisdiction for the purposes of the Parts in this group may review, rescind or vary any order made by it in the exercise of that jurisdiction." There is no doubt that that enabled the Chief Registrar, if he thought fit, to revisit Registrar Derritt's previous orders and to rescind them, even though it could not be said that the orders should not have been made at the time. Although there is that formal discretion, it is a discretion which, as the Chief Registrar recognised, is to be exercised judicially. He cited extensively from the decision of Patten J (as he then was) in Ahmed v Mogul Eastern Foods [2007] BPIR 975, noting its extensive citation by Asplin J (as she now is) in Vaidya v Wijayardhana [2010] BPIR 1016. Amongst the cases considered in extenso by Patten J was the decision of Laddie J in Papanicola v Humphreys [2005] 2 AER 418, from which the following propositions emerged: "It seems to me that a number of propositions can be formulated in relation to s 375. Some of them are derived from the passages cited above. (1) The section gives the court a wide discretion to review vary or rescind any order made in the exercise of the bankruptcy jurisdiction. (2) The onus is on the applicant to demonstrate the existence of circumstances which justify exercise of the discretion in his favour. (3) Those circumstances must be exceptional. (4) The circumstances relied on must involve a material difference to what was before the court which made the original order. In other words there must be something new to justify the overturning of the original order. (5) There is no limit to the factors which may be taken into account. They can include for example changes which have occurred since the making of the original order and significant facts which, although in existence at the time of the original order, were not brought to the court's attention at that time. (6) Where the new circumstances relied on consist of or include new evidence which could have been made available at the original hearing, that, and any explanation the applicant gives for the failure to produce it then or any lack of such explanation, are factors which can be taken into account in the exercise of the discretion. The second and fourth of these propositions merit some expansion. Inherent in s 375 is the concept that something has changed so that it is appropriate for the court to reconsider its own earlier order. If there is no change in circumstances, the only way to challenge the order is by appeal. The court is not to review its order simply on the basis that the applicant wants to present essentially the same facts and the same arguments but more forcefully or attractively." It is thus apparent that the Chief Registrar properly directed himself as to the relevant matters informing his discretion under section 375(1). In paragraph 28 of his judgment, the Chief Registrar set out a number of factors which in his judgment militated against the exercise of the discretion to annul. The same factors are obviously relevant to the exercise of the discretion to rescind also. I need not repeat them in detail, but they included matters such as delay in taking the point, the change of position, the costs incurred by Mr Mackay, question marks over who would meet the trustees' costs and the fact that at the time the bankruptcy order was made the applicants were cash flow insolvent, despite gallant efforts they had made to demonstrate balance sheet solvency, upon which question he thought they might well be right. I should say that, were I wrong on the question of whether or not the debt was liquidated, it would be very difficult if not impossible to interfere with the exercise of the Chief Registrar's discretion on the annulment application. However, that point only now arises in the context of rescission. As to that, the Chief Registrar went on to say: "As to rescission, I would add that in my view the circumstances relied on by the applicants are not exceptional; they simply seek another bite of the cherry." It seems to me that the Registrar was clearly entitled to reach that conclusion in the light of the facts which I have summarised and which the Chief Registrar set out rather more fully in his judgment. It is said against that that there was a significant new factor which emerged, namely the offer of further finance from Gulf Stream within a week of the hearing which was effectively undermined, it is said, by Mr Davies's extravagant claims. It is also said that that offer is still in principle on the table. Be that as it may, no offer for immediate payment has been advanced. If that were the position, one would expect the application to be made under section 282(1)(b), which was for a long time the preferred strategy as some months were spent by the Websters negotiating with creditors, in some cases to reduce the amounts claimed in the event of annulment. That route having proved fruitless for whatever reason, this new route of challenging the liquidated character of the debt was pursued instead, no doubt as a result of entirely competent legal advice given in good faith. The Chief Registrar was right to treat this as another, albeit different, bite of the cherry, insufficient to engage the exceptional jurisdiction of section 375. The result is that the court can have no confidence, despite, as the Registrar put it, the gallant efforts of the Websters to demonstrate balance sheet solvency, that the undoubted substantial indebtedness owed both to Mr Mackay, and other creditors, much but not all of which is admitted, will be paid within any reasonable time frame. Given in addition that the bankruptcy was over a year old, it seems to me that the Registrar was entitled if not bound to dismiss the rescission claim too. In those circumstances, the appeal is dismissed.

S. Radhakrishnan, J. Appellant herein, accused No.1 A-1 along with his father, accused No.2 A-2 was charge-sheeted for the offences of murder of his wife under Sections 302, 498A read with Section 34 of the Indian Penal Code. A-1 and A-2 were found guilty and sentenced to suffer imprisonment for life, with a default sentence. Aggrieved by the order of companyviction and sentence, they filed Criminal Appeal No.11 of 2000 before the High Court of Bombay and the same was dismissed vide judgment dated 09.02.2004. A-2 later died and A-1, aggrieved by the judgment of the High Court has filed this appeal. The prosecution story is as under A-1 son and A-2 father returned to their house on 18.10.1998 at about 7.00 PM, fully drunk. On reaching home, they demanded Rs.200/- to Rs.300/- from the wife of A-1. On refusal, she was severely beaten up and asked to bring it from her parental house. A-2 then sprinkled kerosene from a plastic can over the body of the deceased and A-1 then lit a match-stick and set fire on the saree of the deceased. Deceased shouted for help and rolled down on the ground and ultimately succeeded in extinguishing the fire, but by the time she had suffered more than 80 per cent burns over the body. On getting information, parents of the deceased came to the spot and took her to the nearby Public Health Centre, Mayani. After first aid, the deceased was referred to the Civil Hospital, Satara and on 19.10.1998, at about 3.10 AM she was admitted there. Dr. Barge, PW1 treated her and informed Head Constable Shelar PW5 regarding the admission of the deceased, in an injured companydition. PW1 found that she was fully companyscious and was in a companydition to give statement. PW5, in the presence of PW1, recorded the dying declaration Ext.P26 . Later, Special Judicial Magistrate PW4 reached the Civil Hospital, Satara. Dr. Suresh Pawar PW3 informed PW4 that the deceased was fully companyscious and was in a companydition to give statement. PW4 recorded the second dying declaration Ext.P23 of the deceased, which was sealed in an envelope Ext.P24 and was deposited in the Court of the CJM, Satara. Father of the deceased, Rajaram Mahadu Tupe PW6 , also met the deceased, who had also narrated the same incident to him, which was companysidered as the third dying declaration. PW7, the investigating officer, came to the spot of the incident and prepared the spot panchnama. PW7 seized the plastic can, match stick and partly burnt cloths from the spot where the deceased extinguished the fire by rolling on the ground. The deceased succumbed to the burn injuries on 21.10.1998 and accused were charge-sheeted. Mr. Ranjan Mukherjee, learned amicus curiae, submitted that the evidence recorded is insufficient to warrant a companyviction in the absence of any direct evidence. Learned companynsel also pointed out that there are a lot of inconsistencies in the dying declarations recorded and a companyviction solely on those inconsistent versions cannot be sustained. Learned companynsel also submitted that unless there is companyroborative evidence, numberreliance companyld be placed on the inconsistent versions given by the deceased in the dying declarations. Learned companynsel also submitted that, in any view, the present case would number fall under Section 302, and, at best, it may fall either under Section 304 Part I or Section 304 Part II. Reference was made to exception 4 to Section 300 IPC and stated that since the accused was under the influence of liquor, it has to be perceived that there was numberintention to kill the deceased. Reference was made to the Judgments of this Court in Sukhbir Singh v. State of Haryana 2002 3 SCC 327 and Sandesh alias Sainath Kailash Abhang v. State of Maharashtra 2013 2 SCC 479. Mr. Shankar Chillarge, learned companynsel appearing for the respondent- State, submitted that the trial companyrt as well as the High Court has companyrectly appreciated the oral and documentary evidence adduced in this case, especially, the dying declarations. Learned companynsel pointed out that both the dying declarations have been properly recorded and the doctor had certified that the deceased was in a sound state of mind to give her version and the statements of the deceased were companyrectly recorded in the dying declarations. Learned companynsel submitted that the dying declaration made before the Executive Magistrate is companysistent with the earlier statement made before the police in the presence of the doctor, who had deposed that the deceased was in a companydition to give her version of the incident. We may indicate that in this case the companyviction was recorded on the basis of the dying declarations, Ext.P26 and Ext.P23 companyroborated by circumstantial evidence. The first dying declaration was recorded by PW5, the Head Constable on 19.10.1998 when the deceased was admitted to the Civil Hospital, Satara. PW1, who treated the deceased, informed PW5 that the deceased was fully companyscious and was in a companydition to give her statement. Ext.P26 was recorded by PW5, in the presence of PW1. Later, the Special Magistrate PW4 also reached the Civil Hospital. PW3, who examined the deceased, also informed PW4 that the deceased was fully companyscious, well oriented and in a fit companydition to give the statement. PW4, therefore, recorded the second dying declaration in the presence of PW3. We have gone through Ext.P26 and Ext.P23 and numbericed numberinconsistency in the statements made by the deceased to PW5 as well as to PW4. Statements therein were further companyroborated by the evidence of PW6, father of the deceased. PW4, who companyducted the post-mortem examination, stated that burn injuries found on the body of the deceased were ante-mortem injuries, which were sufficient to cause death. Dying declaration is undoubtedly admissible under Section 32 of the Indian Evidence Act, but due care has to be given by the persons who record the statement. Dying declaration is an exception to the hearsay rule when it is made by the declarant at the time when it is believed that the declarants death was near or certain. Dying declaration is based on the maxim, Nemo moriturus praesumitur mentire i.e. a man will number meet his maker with a lie in his mouth. Dying declaration is a statement made by a dying person as to the injuries culminated in his death or the circumstances under which the injuries were inflicted. Hearsay evidence is number accepted by the law of evidence because the person giving the evidence is number narrating his own experience or story, but rather he is presenting whatever he companyld gather from the statement of another person. That other person may number be available for cross-examination and, therefore, hearsay evidence is number accepted. Dying declaration is an exception to hearsay because, in many cases, it may be sole evidence and hence it becomes necessary to accept the same to meet the ends of justice. The Court has to carefully scrutinize the evidence while evaluating a dying declaration since it is number a statement made on oath and is number tested on the touchstone of cross-examination. In Harbans Singh another State of Punjab AIR 1962 SC 439 this Court held that it is neither a rule of law number of prudence that dying declaration requires to be companyroborated by other evidence before a companyviction can be based thereon. Reference may also be made to the decision of this Court in State of Uttar Pradesh v. Ram Sagar Yadav and others 1985 1 SCC 552. This Court in State of Uttar Pradesh v. Suresh alias Chhavan and others 1981 3 SCC 635 held that minor incoherence in the statement with regard to the facts and circumstances would number be sufficient ground for number relying upon statement, which was otherwise found to be genuine. Hence, as a rule of prudence, there is numberrequirement as to companyroboration of dying declaration before it is acted upon. Ext.P23, the first dying declaration in this case, as already stated, was recorded by PW5, the Head Constable, in the presence of PW1, the doctor who treated the deceased at the hospital. PW1 doctor had categorically deposed that the deceased was fully companyscious and was in a companydition to give the statement. Ext.P26, the second dying declaration was recorded by the Special Judicial Magistrate, PW4. The deceased at that time was examined by PW3, who had also deposed that the deceased was fully companyscious, well oriented and was in a companydition to give the statement. We have gone through Ext.P26 and Ext.P23 and find numberreason to discard the statements recorded in both the dying declarations, which, in our view, are companysistent and minor variations here and there would number be sufficient to discard the entire statement companysidering the fact that the victim was suffering from more than 80 burn injuries. Learned companynsel appearing for the accused-appellant submitted that since the accused was under the influence of liquor, he had numberintention to kill the deceased wife and, therefore, at best, the offence would fall either under Section 304 Part I or Section 304 Part II of the Indian Penal Code. We find it difficult to accept this companytention. Assuming that the accused was fully drunk, he was fully companyscious of the fact that if kerosene is poured and a match-stick lit and put on the body, a person might die due to burns. A fully drunk person is also sometimes aware of the companysequences of his action. It cannot, therefore, be said that since the accused was fully drunk and under the influence of liquor, he had numberintention to cause death of the deceased-wife. Learned companynsel for the Appellant made reference to Sandesh alias Sainath Kailash Abhang supra , wherein even though it was stated that companymitting the offence under the influence of liquor is a mitigating circumstance, but was later clarified in an order passed in Review Petition Crl. No.D8875 of 2013, filed in that case, stating as follows However our observations may number be companystrued to generally mean that drunkenness of an accused is a mitigating factor in the award of punishment. Intoxication, as such, is number a defence to a criminal charge. At times, it can be companysidered to be a mitigating circumstance if the accused is number a habitual drinker, otherwise, it has to be companysidered as an aggravating circumstance. The question, as to whether the drunkenness is a defence while determining sentence, came up for companysideration before this Court in Bablu alias Mubarik Hussain v. State of Rajasthan 2006 13 SCC 116, wherein this Court held that the defence of drunkenness can be availed of only when intoxication produces such a companydition as the accused loses the requisite intention for the offence and onus of proof about reason of intoxication, due to which the accused had become incapable of having particular knowledge in forming the particular intention, is on the accused. Examining Section 85 IPC, this Court held that the evidence of drunkenness which renders the accused incapable of forming the specific intent essential to companystitute the crime should be taken into account with the other facts proved in order to determine whether or number he had the intention. Court held that merely establishing that his mind was affected by drink so that he more readily gave way to some violent passion, does number rebut the presumption that a man intends the natural companysequences of his acts. This Court, in that case, rejected the plea of drunkenness after numbericing that the crime companymitted was a brutal and diabolic act. We find it difficult to accept the companytention of the companynsel that since the accused-Appellant was under the influence of liquor, the offence will fall under Section 304 Part I or Section 304 Part II. A-1 was presumed to know the companysequences of his action, of having lit the match stick and set fire on the saree of deceased, after A-2 sprinkled kerosene on her body. In our view, the accused was companyrectly charge-sheeted under Section 302 IPC and we find numberreason to interfere with the companyviction and sentence awarded by the trial companyrt and affirmed by the High Court. Learned companynsel appearing for the appellant-accused further submitted that the appellant has already served the sentence for more than 16 years without remission, he should be set free. Learned companynsel appearing for the State brought to our knowledge the guidelines for pre-mature release under the 14 Year Rule of Prisoners serving life sentence after 18th December, 1978. The Government Resolution No.RLP1006/CR621/PRS-3 dated 11.04.2008 issued by the Government of Maharashtra has made applicable the guidelines to companyvicts undergoing life imprisonment and those having good behavior while undergoing the sentence. Annexure 1 to the said Government Resolution refers to various categories of offences and the period of imprisonment to be undergone including set-off.

Order of the President of the Court of 24 September 1965. - SpA Arturo Mondini v High Authority of the ECSC. - Case 53-65 R. European Court reports French edition Page 00023 Dutch edition Page 00024 German edition Page 00024 Italian edition Page 00022 English special edition Page 00017 Parties Grounds Operative part Parties ++++ IN CASE 53/65 R SPA ARTURO MONDINI, HAVING ITS REGISTERED OFFICE AT DOMEGLIARA, VERONA, REPRESENTED BY ITS SOLE DIRECTOR, ARTURO MONDINI, ASSISTED BY ENRICO AVESANI, ADVOCATE OF THE VERONA BAR, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF GEORGES MARGUE, AVOCAT-AVOUE, 20 RUE PHILIPPE II, APPLICANT, V HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, GIUSEPPE MARCHESINI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ, DEFENDANT, Grounds WHEREAS BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 25 AUGUST 1965 THE APPLICANT MADE AN APPLICATION FOR THE ANNULMENT OF THE DECISION OF THE HIGH AUTHORITY OF 21 JULY 1965, NOTIFIED ON 29 JULY, ORDERING IT TO PAY A FINE OF 2 MILLION LIRE FOR INFRINGEMENT OF THE OBLIGATION TO PUBLISH PRICE LISTS LAID DOWN IN ARTICLE 60 OF THE TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL COMMUNITY; WHEREAS ON THE SAME DATE THE APPLICANT LODGED AN APPLICATION TO SUSPEND THE OPERATION OF THE DECISION CONTESTED IN THE MAIN APPLICATION; WHEREAS IN ITS OBSERVATIONS LODGED ON 14 SEPTEMBER 1965 THE DEFENDANT CONTENDED THAT THE APPLICATION TO SUSPEND THE OPERATION OF THE DECISION SHOULD BE DISMISSED AS INADMISSIBLE AND, AT ALL EVENTS, AS UNFOUNDED AND THAT THE DECISION AS TO COSTS SHOULD BE RESERVED FOR THE MAIN APPLICATION; WHEREAS THE REQUIREMENTS OF ARTICLE 83(1 ) AND ( 3 ) OF THE RULES OF PROCEDURE HAVE BEEN OBSERVED IN THIS CASE AND THE APPLICATION HAS BEEN PRESENTED IN DUE FORM; WHEREAS UNDER THE TERMS OF ARTICLE 83(2 ) OF THE RULES OF PROCEDURE OF THE COURT AN APPLICATION TO SUSPEND THE OPERATION OF ANY MEASURE ADOPTED BY AN INSTITUTION SHALL STATE THE CIRCUMSTANCES GIVING RISE TO URGENCY AND THE FACTUAL AND LEGAL GROUNDS ESTABLISHING A PRIMA FACIE CASE FOR THE INTERIM MEASURES APPLIED FOR; WHEREAS IN SUPPORT OF ITS APPLICATION, THE APPLICANT HAS MERELY STATED THAT, AS A RESULT OF CIRCUMSTACES AFFECTING IT IN PARTICULAR AND THE DIFFICULT POSITION OF THE ITALIAN IRON AND STEEL INDUSTRY IN GENERAL, IT HAS NEITHER LIQUID ASSETS NOR CAPITAL AVAILABLE TO PAY THE FINE AND THAT ENFORCEMENT OF THE DECISION COULD IRREPARABLY DAMAGE ITS SOLVENCY AND COMMERCIAL REPUTATION; WHEREAS IN THE ABSENCE OF ANY EVIDENCE OR OFFER OF EVIDENCE TO THIS EFFECT SUCH ASSERTIONS CANNOT BE REGARDED AS SUFFICIENT TO ESTABLISH A PRIMA FACIE CASE FOR THE SUSPENSION OF OPERATION APPLIED FOR; Operative part THE PRESIDENT OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES HEREBY ORDERS : 1 . THE APPLICATION IS DISMISSED; 2 . THE COSTS ARE RESERVED .

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 11 May 2006 (1) Case C-193/05 Commission of the European Communities v Grand Duchy of Luxembourg (Failure to fulfil obligations - Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained – Language testing – Prohibition on being a person authorised to accept service (domiciliataire) on behalf of companies – Requirement to produce each year the certificate from the home Member State) I – Introductory remarks 1. The present infringement proceedings concern access to the profession of lawyer in Luxembourg, as does the parallel reference for a preliminary ruling. (2) In particular, they concern the compatibility of the requirements laid down by Luxembourg law with Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained (3) (hereafter ‘the Directive’). II – Legal framework A – Community law 2. Article 1(1) of the Directive provides that the purpose of the Directive is to facilitate practice of the profession of lawyer on a permanent basis in a self-employed or salaried capacity in a Member State other than that in which the professional qualification was obtained. 3. Article 2(1) provides that any lawyer is to be entitled to pursue on a permanent basis, in any other Member State under his home-country professional title, the activities specified in Article 5. 4. Paragraphs 1, 2 and 4 of Article 3 of the Directive, which concerns registration with the competent authority, provide: ‘1. A lawyer who wishes to practise in a Member State other than that in which he obtained his professional qualification shall register with the competent authority in that State. 2. The competent authority in the host Member State shall register the lawyer upon presentation of a certificate attesting to his registration with the competent authority in the home Member State. It may require that, when presented by the competent authority of the home Member State, the certificate be not more than three months old. It shall inform the competent authority in the home Member State of the registration. … 4. Where the relevant competent authority in a host Member State publishes the names of lawyers registered with it, it shall also publish the names of lawyers registered pursuant to this Directive.’ 5. Article 5 of Directive 98/5, which concerns the area of activity, provides: ‘1. Subject to paragraphs 2 and 3, a lawyer practising under his home-country professional title carries on the same professional activities as a lawyer practising under the relevant professional title used in the host Member State and may, inter alia, give advice on the law of his home Member State, on Community law, on international law and on the law of the host Member State. He shall in any event comply with the rules of procedure applicable in the national courts. 2. Member States which authorise in their territory a prescribed category of lawyers to prepare deeds for obtaining title to administer estates of deceased persons and for creating or transferring interests in land which, in other Member States, are reserved for professions other than that of lawyer may exclude from such activities lawyers practising under a home-country professional title conferred in one of the latter Member States. 3. For the pursuit of activities relating to the representation or defence of a client in legal proceedings and insofar as the law of the host Member State reserves such activities to lawyers practising under the professional title of that State, the latter may require lawyers practising under their home-country professional titles to work in conjunction with a lawyer who practises before the judicial authority in question and who would, where necessary, be answerable to that authority or with an ‘avoué’ practising before it. Nevertheless, in order to ensure the smooth operation of the justice system, Member States may lay down specific rules for access to supreme courts, such as the use of specialist lawyers.’ 6. Article 7(2) of Directive 98/5 provides: ‘Before initiating disciplinary proceedings against a lawyer practising under his home-country professional title, the competent authority in the host Member State shall inform the competent authority in the home Member State as soon as possible, furnishing it with all the relevant details. The first subparagraph shall apply mutatis mutandis where disciplinary proceedings are initiated by the competent authority of the home Member State, which shall inform the competent authority of the host Member State(s) accordingly.’ B – National law 7. The relevant provisions of the language regime are in the Loi du 24 février 1984 sur le régime des langues (hereafter ‘the Law of 1984’). (4) 8. Article 2 thereof provides that statutes and their implementing provisions shall be in French. Other regulations may be in a different language. The language used is the authentic one. 9. Article 3 of the Law of 1984 provides that subject to special provisions one may use French, German or the Luxembourg language in administrative and in judicial matters. 10. Directive 98/5 was transposed into the law of the Grand Duchy of Luxembourg by a Law of 13 November 2002 (5) (hereafter ‘the Law of 2002’) amending certain provisions of Luxembourg law. (6) 11. The provisions concerning acting as person authorised to accept service (‘domiciliataire’) are in Article 1(1) of the Law of 31 May 1999 (7) as amended by Article 15 of the Law of 13 November 2002. It provides that only lawyers who are registered in List I within the meaning of Article 8(3) of the Law of 1991 may be authorised to accept service. 12. Article 8(3) of the Law of 1991, as amended by Article 14 of the Law of 2002, provides that there are four categories of lawyers: List I (lawyers who satisfy the requirements of Article 5, namely registration, and of Article 6, concerning the requirements for registration and an oath of allegiance, and who have passed the examination), List II (lawyers who satisfy the requirements of Articles 5 and 6), List III, and List IV (lawyers who practise the profession under their home-country professional title). 13. Further provisions of national law are in the Annex to my Opinion, also of today’s date, in Case C‑506/04. III – Facts, preliminary procedure and proceedings before the Court 14. In 2003 the Commission received a complaint claiming that obstacles existed to the practice of the profession of lawyer in Luxembourg under a home-country professional title. These obstacles were first, the language knowledge required by the Law of 2002, second, the prohibition on acting as a person authorised to accept service (domiciliataire), and third, the requirement to produce each year the certificate from the home Member State. 15. By letter of formal notice dated 17 October 2003 the Commission commenced infringement proceedings against Luxembourg under Article 226 EC. Following Luxembourg’s reply dated 23 December 2003, the Commission issued a reasoned opinion on 9 July 2004, to which Luxembourg replied by letter dated 23 September 2004. 16. On 29 April 2005 the Commission brought an action against the Grand Duchy of Luxembourg before the Court under Article 226 EC, seeking (1) a declaration that, by maintaining, for the purpose of establishment under the home-country professional title, language knowledge requirements, a prohibition on being a person authorised to accept service (domiciliataire) and the obligation to produce each year the certificate from the home Member State, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained, in particular Articles 2, 3 and 5 thereof, (2) an order that the Grand Duchy of Luxembourg pay the costs of the proceedings. IV – The first complaint: language knowledge requirements A – Submissions of the parties 1. The Commission 17. Requiring an examination of language knowledge as a condition for registration of a ‘European lawyer’ in the Bar Register is contrary to the general purpose of Directive 98/5 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained, and infringes in particular Article 3(2) of Directive 98/5, which provides that the host Member State is to register the lawyer simply “upon presentation of a certificate attesting to his registration with the competent authority in the home Member State”. 18. As is apparent from the judgment in Luxembourg v Parliament and Council, (8) the Community legislature chose, in preference to a system of prior testing of qualification in the national law of the host Member State, and certainly in preference to a system of prior testing of knowledge of the official languages of the host State, a plan of action combining consumer information, restrictions on the extent to which or the detailed rules under which certain activities of the profession could be practised, a number of applicable rules of professional conduct, compulsory insurance, and a system of discipline involving the competent authorities of both the home Member State and the host State. 19. Contrary to the submission of the Luxembourg Government, ‘European lawyers’ who wish to practise under their home-country professional title in the host State cannot be made subject to the same conditions – in particular language requirements – as lawyers who wish to practise their profession under that Member State’s professional title. 20. Closer consideration of the type of case usually handled by lawyers within the scope of application of Directive 98/5 (see in particular the fifth recital of Directive 98/5) makes it apparent that knowledge of the official languages of the host State is not absolutely necessary to carry them out. 21. Requiring a language examination as a condition of registration as a ‘European lawyer’ in the Bar Register is contrary to the general purpose of Directive 98/5 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained, and infringes in particular Article 3(2) of Directive 98/5, which provides that the host Member State is to register the lawyer simply ‘upon presentation of a certificate attesting to his registration with the competent authority in the home Member State’. 2. The Luxembourg Government 22. The language knowledge requirements apply without distinction to all lawyers who wish to be registered in one of the Bar Registers for the territory of Luxembourg. A lawyer cannot rely on his foreign professional title in order to address the Luxembourg authorities or the Luxembourg courts in a language other than the normal official languages of Luxembourg. 23. At this point it is necessary to refer to the judgment in Haim concerning the profession of dentist, the reasons for which are based on the need for reliable communication with clients, the authorities and professional associations, and which indicate that in the present case it is necessary for lawyers who wish to practise in Luxembourg under their home-country professional title to have certain language knowledge. 24. Since a lawyer who practises his profession under his home-country professional title may give advice also on Luxembourg law, requiring such a lawyer to have the language knowledge necessary to enable him to read and to understand Luxembourg legal texts is justified. 25. In addition, it is to be emphasised that penalty notices issued by the police following road traffic accidents are normally written in German, as are the Luxembourg tax laws, and this makes it necessary to consult case-law and commentaries written in German. 26. Moreover, a Luxembourg party who represents himself in court will normally use the Luxembourg language before the lower courts, where there is no obligation to be represented by a member of the Bar Association (avocat à la cour). Furthermore, many Luxembourg nationals speak exclusively in their native language when consulting a lawyer. 27. In addition, as is apparent from the rules of the Luxembourg Bar Associations, (9) the whole of the professional rules are written exclusively in French. B – Analysis 28. It must first be observed that the provision which is the subject of the dispute concerns a language examination for lawyers having a qualification from other Member States who wish to practice their profession on a permanent basis under their home-country professional title. 29. In that situation Article 3(1) of the Law of 2002 provides that in order to practise the profession of lawyer under their home-country professional titles ‘European lawyers’ must be registered in the Bar Register. Pursuant to paragraph 2 of that provision, registration occurs once an oral language test has been passed, which examines knowledge of the French, Luxembourg and German languages. 1. The wording of Directive 98/5 30. To determine whether such a requirement is compatible with the guarantees laid down by Directive 98/5, it is necessary to consider first the wording of the Directive. 31. Directive 98/5 does not contain any express provisions regarding language examinations. Accordingly, it is necessary to consider whether it is possible at least to infer from it whether and what language knowledge may be required. Article 2(1) of the Directive provides that any lawyer is to be entitled to pursue on a permanent basis, in any other Member State under his home-country professional title, the activities specified in Article 5. Article 3(1) of Directive 98/5 specifies that registration with the competent authority in that Member State is a precondition for this. Article 3(2) of the Directive provides that registration requires presentation of a certificate attesting to registration of the lawyer with the competent authority in the home Member State. 32. As regards requirements for registration, Directive 98/5 provides for complete harmonisation. 33. Presentation of such a certificate is the only condition for registration expressly laid down by Directive 98/5. This could lead to the conclusion that further conditions – for example, passing a language examination – were deliberately not provided for by the Community legislature and are therefore not permitted. This would accord also with the unconditional wording (10) of Article 2(1). 34. However, a different view would result if the only reason for not laying down any provisions concerning language tests was that the possibility of requiring them was already implicit in other provisions of Directive 98/5. Article 6(1) provides that a lawyer practising under his home-country professional title is to be subject to the rules of professional conduct of the host Member State. However, this does not allow the conclusion that a language examination required by the professional rules of the host State is automatically compatible with Directive 98/5; were it otherwise, the Member States could erect all sorts of obstacles to ‘European lawyers’ in their rules and thus thwart the aims of Directive 98/5. It follows that Article 6 cannot be interpreted as authorising the disputed examination. 35. Thus, the wording of Directive 98/5 indicates that a language test is not compatible therewith. 2. The purpose of Directive 98/5 36. Article 1(1) of Directive 98/5 provides that the purpose of the Directive is to realise freedom of movement as provided for in the Treaty for the profession of lawyer. 37. In that regard the first milestone in the legislative development was Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services (11) (hereafter ‘Directive 77/249’). The next step was made by the enactment of Council Directive 89/48/EEC of 21 December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three years’ duration (12) (hereafter ‘Directive 89/48’). 38. However, because Directive 89/48 applied to a number of regulated professions, it was not regarded as sufficient to realise the fundamental freedoms for lawyers. The special features of the legal profession required special provision, and this was enacted in Directive 98/5. Its purpose was to make it easier for a particular class of migrant lawyers, namely those who wish to practise under their home-country professional title, to exercise their fundamental freedom of establishment. (13) 39. The fifth recital of Directive 98/5 states that the need for special provision arises from the changing needs of consumers of legal services who, owing to the realisation of the internal market, seek advice when carrying out transactions in which international law, Community law and domestic laws often overlap. For this purpose Directive 98/5 was intended, when compared with the general system for the recognition of diplomas (Directive 89/48), inter alia to provide an ‘easier’ means of integration into the profession in a host Member State. 40. However, if a language test were required at national level this would make access to the profession of lawyer in another Member State subject to a similar hurdle as is allowed in the framework laid down by Directive 89/48: Article 4 of that Directive allows Member States to require an aptitude test for the profession of lawyer. Given that language and knowledge examinations have comparable effects, integration into the profession would hardly be ‘easier’ than if the general recognition provisions were applied. The purpose of Directive 98/5 to make a further step towards integration beyond Directive 89/48 would thus be endangered. 41. Finally, it is to be emphasised that language knowledge is of course important for profitable activity. That applies in particular to knowledge of the official language or languages. It may be essential in communicating with clients and with the authorities of the relevant Member State. Thus, if a lawyer does not have the necessary language knowledge himself, he must obtain assistance from a lawyer who does. On this view, limited or lack of language knowledge affects the substantive activity of the ‘European lawyer’ in question and restricts his field of activity. 42. In this connection reference should again be made to the fact that the issue in dispute in the present proceedings concerns the activities of lawyers practising under their home-country professional titles and not of so-called domestic lawyers, that is, those practising under the professional title of the host State. That is enough to require that ‘European lawyers’ cannot be subject to the same requirements as lawyers who wish to practise under the professional title of the host State. 3. The legislative history of Directive 98/5 43. That requiring a language test is unlawful is supported also by consideration of the legislative process. From the Commission’s first Proposal dated 30 March 1995 (14) to the final version of 16 February 1998 this was characterised by the number of amendments. For example, the Commission’s draft Article 2 provided that the practice of the profession of lawyer in another Member State under the home-country professional title was to be limited to a period of five years. 44. However, it is striking that right from the beginning registration against presentation of a certificate by the home Member State remained the only condition for practice of the profession. Thus, the Commission’s justification for Article 2 of its Proposal for Directive 98/5 even referred expressly to the ‘only condition’ for registration. It was only in the Opinion of the Economic and Social Committee (15) that any doubt was expressed about a solution which permitted advice to be given on the law of the host State without prior examination of (language) knowledge. However, these doubts were not taken up in the subsequent legislative procedure and were not repeated in the discussions of the European Parliament and of the Council. 45. One of the constants in the legislative history of Directive 98/5, characterised as it was by the large number of amendments, is that registration is dependent on nothing more than presentation of a certificate by the home State. 46. This indicates that all the organs which had any say in the legislative process proceeded on the basis that the Member States should not be allowed to lay down language requirements. 4. The Court’s case-law on the fundamental freedoms 47. The conclusions derived from the wording, purpose and legislative history of the provision are consistent with the general case-law of the Court on the relevant fundamental freedoms. 48. However, one might regard the judgments in Groener (16) and Haim (17) as deviating from this general line. There the Court held that although language requirements constituted an obstacle to the exercise of the freedoms guaranteed by the Treaty, they could be justified by overriding reasons based on the general interest. (18) These included reliability of communication with patients as well as administrative authorities and professional bodies. 49. Similar considerations might be relevant in the present proceedings, namely communication between lawyer and client, protection of the latter against advice which is incorrect because of the lawyer’s lack of language knowledge, and the guarantee of the proper administration of justice. If the aforementioned decisions were applicable by analogy to the present situation this would suggest that it was possible for Member States to require language tests. 50. In Groener the Court regarded an Irish provision making appointment to a permanent full-time post as a lecturer in public vocational education institutions conditional upon proof of an adequate knowledge of the Irish language as compatible with Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community. (19) 51. However, it based its decision on Article 3(1)(2) of Regulation (EEC) No 1612/68, which provided for an exception for language knowledge from the principle in the second indent of paragraph 1, according to which national laws, regulations or administrative actions or administrative practices of a Member State were not to apply where their aim or effect was to keep nationals of other Member States away from the employment offered. Directive 98/5 does not contain such an exception or enabling provision. 52. The reasoning of the Court was also based on the fact that through teaching and the privileged relationship which they had with their pupils, teachers had an essential role to play in the national policy of maintaining national identity and culture. Admittedly, the language situation in the Grand Duchy of Luxembourg is special in a way similar to that in the Republic of Ireland. (20) However, the profession of lawyer is not comparable with that of lecturer. It is not his task, nor is he in a position, to safeguard the language as an expression of national identity and culture. (21) 53. Because of those differences, the case of Groener cannot be relied on as an argument in favour of a national language test. 54. In its judgment in Haim the Court held that the competent authorities of a Member State could make the appointment, as a social security scheme dental practitioner, of a national of another Member State who was established in the first Member State and authorised to practise there conditional upon his having the linguistic knowledge necessary for the exercise of his profession in the Member State of establishment. 55. However, the provisions of Community law relevant in Haim differ materially from those of Directive 98/5. 56. Article 18(3) of Council Directive 78/686/EEC of 25 July 1978 concerning the mutual recognition of diplomas, certificates and other evidence of the formal qualifications of practitioners of dentistry, including measures to facilitate the effective exercise of the right of establishment and freedom to provide services (22) (hereafter ‘Directive 78/686’) provides that Member States shall see to it that the persons benefited by Directive 78/686 acquire, in the interest of their patients, the linguistic knowledge necessary in the host Member State. Directive 98/5 does not contain any comparable provision. 57. Directive 78/686 was not in fact applicable in Haim, because Mr Haim had obtained his dentistry qualification not in the European Union but in Turkey. However, the fact that the decision of the Court to permit language requirements was a consequence of the special provision in Article 18(3) of Directive 78/686 is demonstrated in the analysis by Advocate General Mischo (23) in that case. According to that, the language requirement imposed by the Directive on Community nationals who were holders of qualifications awarded by other Member States and were thus within the scope of application of Article 18(3) applied a fortiori to nationals of other Member States who were holders of qualifications from non-Member States. 58. Thus, because of the differences in the present case the judgment in Haim cannot serve as an argument justifying a language test in the context of Directive 98/5. 5. The Court’s case-law on Directive 98/5 59. There are further statements by the Court which indicate that a language test is not permitted, in the judgment in Luxembourg v Parliament and Council .(24) 60. In that case the Court had to determine an action brought by Luxembourg for annulment of Directive 98/5. Luxembourg challenged the validity of Directive 98/5 inter alia because it did not require prior testing of qualification in the national law of the host Member State for lawyers practising under their home-country professional title. This undermined the interests of consumers and the interest of the proper administration of justice as overriding reasons in the public interest. 61. However, in its judgment the Court rejected those arguments by Luxembourg. When adopting coordinating measures, the Community legislature was to have regard to the public interest pursued by the various Member States and to adopt a level of protection for that interest which seemed acceptable in the Community. (25) In paragraphs 34 to 43 the Court explained in detail that Articles 4, 5, 6 and 7 of the Directive already provided sufficient protection to guarantee the interests mentioned. 62. In that judgment the Court also stated that a lawyer practising under his home-country professional title is required, for example, to state his title also in the official language of his home State when providing information to consumers, to avoid any confusion with the professional titles of the host State. Furthermore, he is subject to certain restrictions on the extent to which and the detailed rules under which the profession may be practised, as well as the professional rules of the host State. In making such a choice of the method and level of consumer protection and of ensuring the proper administration of justice in preference to a system of prior testing of qualification in the national law, the Community legislature had not overstepped the limits of its discretion. 63. What must therefore be assessed is whether this analysis by the Court is to be regarded as meaning that the language test is incompatible with Directive 98/5. For that two conditions must be fulfilled. First, the Court’s statements relate to an examination of (substantive) knowledge of the law of the host State. The same must apply in relation to an examination of language knowledge. Second, the judgment was made in an action for annulment. From the fact that the Community legislature did not overstep its discretion it would also have to follow that the Member States were not permitted to provide for a different scheme of protection. 64. As regards the first condition, namely that an examination of legal knowledge must be comparable to a language test, it is to be pointed out that – as the Court explained – the legislature did not abolish the requirement to know the national law, but simply released the lawyer from the obligation to prove that knowledge in advance. Thus, the Court accepted that (legal) knowledge could be assimilated gradually through practice. 65. Linguistic knowledge too can be improved continuously by working daily in the host State. In addition the means of protection provided for in respect of legal knowledge operate also to protect against linguistic inadequacy. In that regard, too, making lawyers subject to the professional rules of the host State prevents prejudice to clients. The applicable rules of professional conduct entail, like Article 3.1.3 of the Code of Professional Conduct adopted by the Council of the Bars and Law Societies of the European Union (CCBE), an obligation, breach of which may incur disciplinary sanctions, not to handle matters which the lawyer concerned knows or ought to know he is not competent to handle. That is of course applicable to lack of linguistic knowledge. 66. If his language ability is not sufficient for him to analyse competently a set of facts under application of the relevant norms, a lawyer is required not to handle the matter, in exactly the same way as where he has inadequate knowledge of the law. 67. It follows that what the Court said as regards substantive knowledge may be applied to language requirements. 68. However, the second condition must also be fulfilled. At first blush it appears arguable that the fact that in laying down means of protection which did not include prior testing the Community legislature kept within the scope of its discretion does not automatically mean that other schemes are prohibited. In fact it may not be inferred from the Court’s discussion that a scheme of prior testing would not have been within the discretion of the Community legislature. 69. However, this question is not to be confused with the question as to what discretion remained to the Member States after the Community legislature had made its – lawful – choice of means of protection. Once the Community legislature has enacted a particular means, then subject to any express enabling provision it is not open to the Member States to deviate from it. 70. Accordingly, the second condition is fulfilled. It follows that what the Court said in Luxembourg v Parliament and Council concerning the annulment of Directive 98/5 is relevant also to the present proceedings. The conclusion arrived at from consideration of the wording and the legislative history that a language test is incompatible with Directive 98/5 is confirmed by the case-law of the Court. 6. The effect of Directive 2005/36 71. It may be that Directive 98/5 is to be interpreted in the light of the new Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (26) (hereafter ‘Directive 2005/36’). Article 53 thereof provides that persons benefiting from the recognition of professional qualifications must have ‘a knowledge of languages’ necessary for practising the profession in the host Member State. 72. By contrast, the present case concerns the practice of a profession in the host State under the home-country professional title. As the Court explained in Luxembourg v Parliament and Council with regard to the different treatment of the two categories of lawyer, (27) the two categories are not comparable with one another. (28) 73. This leads to the conclusion that the differences in the factual circumstances prevent arguments relating to practice under the professional title of the host State from being used in the area in which the dispute in the present case arises, namely practice of the profession of lawyer under one’s home-country professional title. It follows that Directive 98/5 is therefore not to be interpreted in the light of Directive 2005/36. The conclusion remains that the language test is incompatible with the former Directive. 7. Comparison with Directive 77/249 74. Finally, comparison with Directive 77/249 also suggests that a prior language test is not permitted. As appears from Luxembourg’s submissions in Luxembourg v Parliament and Council, (29) the Grand Duchy does not dispute the right conferred by Directive 77/249 on foreign lawyers practising in the host State under their home-country professional title to give advice on the law of the host State without having to prove their language knowledge in advance. 75. That being so, there is much in favour of the same being true in the context of Directive 98/5. This is because so far as the provisions relevant in the present case are concerned the Directives are broadly equivalent. The sole difference is that one falls within the law on freedom to provide services and the other in the field governed by Articles 43 EC ff. 76. However, one might argue that this was a material difference which justified a different approach. This is because a lawyer who merely provides services is present in the other Member State for only a short period and handles significantly fewer matters there than a lawyer who has established himself there. Thus, the risk to clients of inadequate legal advice could be far lower in the context of Directive 77/249 than within the context of Directive 98/5. 77. However, careful consideration shows that this is not the case. The conclusion to be drawn a contrario from Article 4(1), (2) and (4) and Article 7(2) of Directive 77/249 is that a lawyer who provides services is not subject to the host State’s professional rules and disciplinary procedures to the same extent as a ‘European lawyer’ who has established himself there. The lesser ‘deterrent effect’ could lead the former to engage in conduct which, having regard to his lack of language knowledge, involved greater risk. In addition, a lawyer who has established himself is fundamentally likely to be in a better position to give reliable advice, given his closer connection to the local legal system and language(s). (30) 78. Thus, the risks to clients and to the proper administration of justice on account of any lack of language knowledge on the part of a ‘European lawyer’ who has established himself are at least not greater than those arising where a lawyer merely provides services. 8. Interim conclusion 79. For all these reasons, the competent authorities of the host State may not make practice of the profession of lawyer under the home-country professional title in the host State, that is in a Member State other than that in which the qualification was obtained, conditional on passing a prior language test. 80. Even if the Court were of the view that a language test were in principle compatible with the guarantees laid down by Directive 98/5, the further question would arise as to whether the Directive authorised the language knowledge requirements in force in Luxembourg. 81. As stated above, the language test being challenged covers French, German and the Luxembourg language. 82. Article 3 of the Law of 1984 on the language regime (31) provides that all three languages may be used in the administrative authorities and in the courts in Luxembourg. However, in terms of proportionality this by no means requires a ‘European lawyer’ to have prior knowledge of all three languages. 83. Specifically, Article 2 of that Law provides that all Luxembourg laws and their implementing provisions are to be in French. According to the information provided by the Grand Duchy French is also the language in which the professional rules for lawyers are written. It is only parts of the general tax law which are written in German, namely the Tax Regulations taken over from the Federal Republic of Germany. 84. It follows that knowledge of at least the Luxembourg language – and probably also of German – is by no means necessary to ensure that legal advice is reliable in order to protect consumers and the proper administration of justice. 85. Thus, the first complaint is well founded. V – The second complaint: prohibition on being authorised to accept service (acting as a ‘domiciliataire’) A – Submissions of the parties 1. The Commission 86. Article 5(1) of Directive 98/5 provides that subject to certain exceptions provided for by paragraphs 2 and 3 of Article 5 of Directive 98/5, a lawyer practising under his home-country professional title has the right to carry on the same professional activities as a lawyer practising under the relevant professional title used in the host Member State. It follows that the Member States do not have the right to provide for further exceptions when transposing Directive 98/5. Therefore, the prohibition on being authorised to accept service infringes Article 5(1) of Directive 98/5. 87. Contrary to the argument of the Luxembourg Government a ‘European lawyer’ cannot be compared to a Luxembourg lawyer registered in List II of the Bar Register (trainee lawyer – avocat stagiaire), who is also prohibited from being authorised to accept service. Whereas that List is of lawyers who have been permitted to start a legal traineeship but whose final admission still depends on passing an examination at the end of that traineeship, a ‘European lawyer’ is already a fully qualified lawyer. 88. In addition, the requirement to know local law cannot justify any restriction on the activities of a lawyer practising under his home-country professional title. For the Luxembourg Government to be able to rely on any threat to public order as justification, there would have to be a real and sufficiently serious risk affecting a fundamental interest of society, but there is no such risk where a lawyer admitted in another Member State carries on the activity of accepting service. 89. In order to ensure the full effectiveness of Article 5(1) of Directive 98/5, Article 6(3) of Directive 98/5 allows the Member States to require a lawyer practising under his home-country professional title either to take out professional indemnity insurance or to become a member of a professional guarantee fund. 2. The Luxembourg Government 90. The Luxembourg Government intended that for the protection of public order the Law of 1999 should reserve the activity of accepting service on behalf of companies to lawyers familiar with local law and local practice, in order to counter certain abuses connected with fictitious addresses for service which damage the Luxembourg market. 91. In so far as a person accepting service must verify that the company satisfies the legal requirements relating to access to the [commercial] profession and local provisions concerning registration for social security purposes and calling general meetings, carrying on the activity of accepting service requires professional experience and a good knowledge of company law, and for that reason the Luxembourg Government decided to exclude lawyers registered in List II (trainee lawyers – avocats stagiaires) and ‘European lawyers’ from this activity. 92. Where a lawyer practises his profession under his home-country professional title, although fully qualified in his home State he is not in the same position as a lawyer qualified in the host State. However, Directive 98/5 (in particular the fourth recital) makes it possible for them to become integrated into the profession in the host State after the period necessary for acquiring professional experience and subject to the conditions laid down in Article 10 of Directive 98/5. During that period Article 5(4) of the Law of 2002 permits ‘European lawyers’ to act only in conjunction with a lawyer who is a member of the Bar (avocat à la cour) who is answerable in law for documents and proceedings reserved by law and by regulations to such a lawyer, the same applying to trainee lawyers (avocats stagiaires). B – Analysis 93. It must first be observed that the Luxembourg provision that only lawyers registered in List I may be authorised to accept service excludes other lawyers from this activity. Specifically, these are lawyers registered in Lists II to IV. 94. Thus, these ‘excluded’ lawyers are not able to carry on the same professional activities as lawyers practising under the professional title of the host State. 95. The effect of the provision in dispute in the present case is the negation of the fundamental right Article 5(1) of Directive 98/5 confers on lawyers practising under their home-country professional titles to carry on the same professional activities. 96. Article 5(1) of Directive 98/5 allows Member States to provide for certain exceptions from this fundamental right, but the provision in dispute in the present case does not correspond to any of the situations laid down by paragraphs (2) and (3) in that regard. 97. It is no answer to say that certain Luxembourg lawyers, namely ‘avocats stagiaires’ registered in List II, may not be authorised to accept service. This category is not comparable to ‘European lawyers’ because the latter are lawyers who have a full professional qualification. The two categories are thus too different to allow them to be made subject to the same legal rules in this regard. 98. Nor can such a difference in treatment be justified by the fact that the tasks involved in accepting service require professional experience and a particular familiarity with the law (specifically company law) and local practice. Legal practice always requires a certain degree of care and familiarity with the law, and this not only for reasons of liability. 99. Moreover, company law is an area of law in which there is a relatively high degree of harmonisation at Community law level. It is therefore likely that in broad areas similar rules apply in the European lawyer’s home State. 100. Whether the obligation in dispute in the present case may be regarded as a requirement of the ‘ordre public’ need not be considered in great detail, given the strict criteria the Court has laid down in that regard. (32) In the present case it is impossible to determine even which fundamental interest of society the disputed provision is intended to protect, and why it is thought that there is a real and present risk to such an interest. 101. Thus, the second complaint too, is well founded. VI – The third complaint – requirement to produce each year the certificate from the home Member State A – Submissions of the parties 1. The Commission 102. The Commission is of the view that in its reply to the reasoned opinion the Luxembourg Government stated that it had taken due note of the Commission’s argument that the requirement to produce each year the certificate of registration with the competent authorities of the home Member State constituted an unjustified administrative burden having regard to the provisions of Directive 98/5. 103. However, the Commission points out that, contrary to the terms of Directive 98/5, for the reasons stated in the reasoned opinion, at the present time that requirement remains in the text of the Law transposing Directive 98/5 into Luxembourg law. 2. The Luxembourg Government 104. On this point the Luxembourg Government refers to its answer to the reasoned opinion. There it took note of the Commission’s argument that the disputed obligation constituted an unjustified administrative burden. B – Analysis 105. As regards the requirement in Article 3(2) of the Law of 2002 to produce each year the certificate from the home Member State, it is first to be observed that the Luxembourg Government appears to accept that this infringes its obligations under the Treaty. 106. It must be said in fact that this requirement of Luxembourg law is an obligation which is not expressly provided for in Directive 98/5. The lawfulness of such a requirement cannot be otherwise inferred from the Directive. Such a requirement is incompatible with the purposes pursued by the Directive and the mechanisms it lays down. 107. For example, Directive 98/5 requires the home State to cooperate with the host State. This is shown in particular by the obligation laid down in Article 7(2)(2) of the Directive to inform the competent authority of the host Member State(s) of the initiation of disciplinary proceedings. 108. It is in particular the annual nature of the obligation imposed by Luxembourg law which constitutes an administrative burden, which in any event does not comply with the principle of proportionality. 109. Thus, the third complaint is also well founded. VII – Costs 110. Article 69(2) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. The Grand Duchy of Luxembourg having been unsuccessful in its submissions, it is to be ordered to pay the costs of the proceedings. VIII – Conclusion 111. For the foregoing reasons I propose that the Court (1) declare that, by maintaining, for the purpose of establishment under the home-country professional title, a language test, a prohibition on being a person authorised to accept service (domiciliataire) and the obligation to produce each year the certificate from the home Member State, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained, (2) order that the Grand Duchy of Luxembourg pay the costs. 1 – Original language: German. 2 – Case C-506/04 Wilson v Conseil de l’Ordre des Avocats du Barreau de Luxembourg; see my Opinion in that case of today’s date (11 May 2006). 3 – OJ 1998 L 77, p. 36. 4 – Mémorial A, no 16, of 27 February 1984, p. 196. 5 – Mémorial A, no 140, of 17 December 2002, p. 3202. 6 – The Law of 10 August 1991 concerning the profession of lawyer (Mémorial A, no 58, of 27 August 1991, p. 1110) and the Law of 31 May 1999. 7 – Mémorial A, no 77, of 21 June 1999, p. 1681. 8 – Case C-168/98 [2000] ECR I-9131, paragraphs 33 to 43. 9 – Mémorial A, no 53, of 20 April 2005. 10 – To this effect, see also Jacques Pertek: ‘Le Communauté peut instituer un système de reconnaissance mutuelles des autorisations nationales d’exercice permettant de pratiquer toutes les activités typiques de l’avocat dans un État d’acceuil’, in La Semaine juridique – édition générale, 2001 II 10637, p. 2258, at p. 2260. 11 – OJ 1977 L 78, p. 17. 12 – OJ 1989 L 19, p. 16. 13 – Luxembourg v Parliament and Council (cited above, footnote 8), paragraph 43. 14 – OJ 1995 C 128, p 6. 15 – OJ 1995 C 256, p. 14. 16 – Case 379/87 Groener [1989] ECR 3967, paragraphs 17 to 20. 17 – Case C-424/97 Haim [2000] ECR I-5123, paragraphs 52 to 61. 18 – See Case C-281/98 Angonese [2000] ECR I-4139, paragraphs 42 to 44, and Case C-473/93 Commission v Luxembourg [1996] ECR I‑3207, paragraph 35. 19 – Council Regulation of 15 October 1968, OJ English Special Edition 1968 (II), p. 475. 20 – Commission v Luxembourg (cited above, footnote 18), paragraph 35. 21 – See Bryan McMahon, in Common Market Law Review (1990) p. 136, at p. 137. 22 – OJ 1978 L 233, p. 1. 23 – Opinion of Advocate General Mischo in Haim (cited above, footnote 17), paragraphs 89 to 91. 24 – Cited above, footnote 8, paragraphs 32 to 44. 25 – Luxembourg v Parliament and Council (cited above, footnote 8), paragraph 32, and Case C‑233/94 Germany v Parliament and Council [1997] ECR I-2405, paragraph 17. 26 – OJ 2005 L 255, p. 22. 27 – Luxembourg v Parliament and Council (cited above, footnote 8), paragraphs 20 to 29. 28 – For criticism of the Court’s approach, see Pedro Cabal, in Common Market Law Review (2002), pp. 140 to 143, albeit in agreement with the result. 29 – Cited above, footnote 8, paragraphs 20 and 21; to the same effect see also Georges Friden, Cour de justice des communautés européennes, Annales du droit luxembourgeois (2000), p. 283, at p. 284. 30 – Opinion of Advocate General Ruiz-Jarabo Colomer in Luxembourg v Parliament and Council (cited above, footnote 8), paragraphs 43 f. 31 – Mémorial A (cited in footnote 4), p. 196 et seq. 32 – Case 79/85 Segers [1986] ECR 2375, Case C 114/97 Commission v Spain [1998] ECR I-6717, and Case C-355/98 Commission v Belgium [2000] ECR I-1221.

Heard Mr. Amit George, learned companynsel in support of this appeal, Mr. Ram Naresh Yadav, learned companynsel for the State of Rajasthan and Mr. Rishabh Sancheti, learned companynsel appearing for the companytesting respondent No.3. Leave granted. The appellant herein has grievance against respondent No.3 who is the Sarpanch of Village Dhanin, District Rajsamand in the State of Rajasthan. It is the case of the appellant that her restaurant was demolished by respondent No.3 and her husband the second respondent herein. Therefore, she initiated necessary proceedings before the Magistrates Court. Respondent Nos.2 3 filed a petition under Section 482 of the Code of Criminal Procedure before the Rajasthan High Court being Criminal Miscellaneous Petition No.758 of 2007, for quashing the proceedings initiated before the Magistrates Court, companytending that as far as respondent No.3 is companycerned, the demolition was in discharge of the official duties of respondent No.3 as a public servant and prior sanction of the State Government was to be obtained and therefore she companyld number be prosecuted. The High Court quashed the proceedings as against respondent No.3. The High Court, however, held that the matter will proceed against respondent No.2, husband of respondent No.3. Being aggrieved by that order passed by the High Court, this appeal has been filed. Learned companynsel for the appellant pointed out that protection under Section 197 of Cr.P.C. is number available against illegal acts. It is available only to the public servant who cannot be removed from the office except with prior sanction of the State Government. The respondent No.3 would number fall under this category. Learned companynsel appearing for respondent No.3 companytended that under the State Amendment to Section 21 of the Indian Penal Code, a Sarpanch is to be companysidered as a public servant. Counsel for the appellant on the other hand, pointed out that the removal of respondent No.3 can be done by passing a resolution in the Panchayat under Section 37 of the Rajasthan Panchayats Act. That being so, in our view, the High Court erred in passing the order.

FOURTH SECTION CASE OF VENERA-NORD-VEST BORTA A.G. v. MOLDOVA (Application no. 31535/03) JUDGMENT STRASBOURG 13 February 2007 FINAL 13/05/2007 This judgment will become final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Venera-Nord-Vest Borta A.G. v. Moldova, The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of: SirNicolas Bratza, President,MrJ. Casadevall,MrG. Bonello,MrK. Traja,MrS. Pavlovschi,MrJ. Šikuta,MrsP. Hirvelä, judges,and Mr T.L. Early, Section Registrar, Having deliberated in private on 23 January 2007, Delivers the following judgment, which was adopted on that date: PROCEDURE 1. The case originated in an application (no. 31535/03) against the Republic of Moldova lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 16 June 2003 by Venera-Nord-Vest Borta A.G., a company incorporated in Moldova (“the applicant”). 2. The applicant was represented before the Court by Mr Mihai Gheorghiţă, a lawyer practising in Chişinău. The Moldovan Government (“the Government”) were represented by their Agent, Mr Vitalie Pârlog. 3. The applicant alleged that its rights to a fair hearing and to the peaceful enjoyment of its possessions had been breached as a result of the quashing of a final judgment in its favour. 4. On 25 June 2004 the Court communicated the application to the Government. Under the provisions of Article 29 § 3 of the Convention, it decided to examine the merits of the application at the same time as its admissibility. 5. The applicant and the Government each filed further written observations (Rule 59 § 1). 6. The Government submitted two unilateral declarations and invited the Court to strike out the application, in accordance with Article 37 of the Convention. THE FACTS I. THE CIRCUMSTANCES OF THE CASE 7. On 1 May 1999 the applicant concluded a contract with another private company. According to the contract, the applicant would locate assets belonging to the debtors of the second company in exchange for a commission. Since the second company failed to comply with the contract, the applicant brought an action against it seeking damages for breach of the contract. 8. On 8 May 2001 the Chişinău Economic Court found in favour of the applicant and awarded it 244,939 Moldovan lei (MDL) (the equivalent of 21,050.46 euros (EUR) at that time). 9. On 30 January and 9 October 2002 the Economic Court of the Republic of Moldova and the Supreme Court of Justice respectively dismissed the second company’s appeals and upheld the judgment of the first-instance court, which thus became final. 10. On 24 December 2002 the Prosecutor General lodged with the Plenary of the Supreme Court of Justice a request for annulment of the judgment in favour of the applicant. 11. On 27 January 2003 the Plenary of the Supreme Court of Justice upheld the Prosecutor General’s request for annulment and quashed the judgment. It adopted a new judgment dismissing the applicant’s action. 12. Following the communication of the case by the Court, the Government Agent asked the Prosecutor General to lodge a request with the Plenary of the Supreme Court of Justice in order to quash its judgment of 27 January 2003 and to discontinue the request for annulment proceedings. He considered that the quashing of a final judgment in favour of the applicant following the annulment proceedings had breached the applicant’s rights under the Convention. 13. On 2 November 2004 the Prosecutor General complied with the Government Agent’s request. He lodged a revision request relying on section 449 § 1 (j) of the Code of Civil Procedure (the “CCP”, see paragraph 16 below) and indicated that the applicant and the Government intended to conclude a friendly settlement agreement. 14. By a judgment of 21 February 2005 the Plenary of the Supreme Court of Justice dismissed the Prosecutor’s request for revision on the ground that the parties had not submitted any evidence of the alleged friendly settlement. II. RELEVANT DOMESTIC LAW AND PRACTICE A. Domestic law 15. The relevant domestic law concerning the quashing of a final judgment was set out in Roşca v. Moldova, no. 6267/02, § 16, 22 March 2005. 16. The Code of Civil Procedure of 12 June 2003, insofar as relevant, reads as follows: Section 449 Grounds for revision Revision may be requested: ... j) When the Government of the Republic of Moldova, represented by the Government Agent, or the European Court of Human Rights has started a procedure of friendly settlement in a pending case against the Republic of Moldova, and the Government consider that by a final decision of a court a fundamental right guaranteed by the Constitution of the Republic of Moldova or by the European Convention for the Protection of Human Rights and Fundamental Freedoms has been breached. k) When the European Court of Human Rights has found a violation of fundamental rights and liberties, as well as when it has found that the interested person could obtain, in accordance with domestic law, at least partial reparation by way of annulment of a judgment pronounced by a domestic court. B. Relevant domestic practice 17. In Ungureanu v. the Sângerei Local Council on 25 January 2006 the Supreme Court of Justice upheld the Prosecutor’s request for revision lodged in accordance with section 449 § 1 (j) following the Government’s Agent request. It discontinued the annulment proceedings, acknowledged the violation of the applicant’s rights under Article 6 § 1 of the Convention and awarded her compensation in respect of pecuniary and non-pecuniary damage and for costs and expenses. 18. In Dumitru Grosu v. the Ministry of Finance on 22 March 2006 the Supreme Court of Justice upheld the Prosecutor’s request for revision lodged on 6 May 2004 in accordance with section 449 § 1 (j) following the Government’s Agent request. It discontinued the annulment proceedings, acknowledged the violation of the applicant’s rights under Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention and awarded him compensation in respect of pecuniary and non-pecuniary damage and for costs and expenses. 19. In Enachi v. the Ministry of Finance on 15 March 2006 the Supreme Court of Justice upheld the applicant’s action following the re-opening of the proceedings upon the Prosecutor’s request for revision lodged in accordance with section 449 § 1 (j). It acknowledged the violation of the applicant’s rights under Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention and awarded him compensation in respect of pecuniary and non-pecuniary damage and for costs and expenses. 20. In The Ministry of Industry of the Republic of Moldova v. JSC Hidromasina[1] on 29 June 2006 the Supreme Court of Justice dismissed the Prosecutor’s request for revision lodged in accordance with section 449 § 1 (j) following the Government’s Agent request. It found that the Government had failed to submit any evidence of the violation of the applicant company’s rights under the Convention. The Supreme Court also stated it could not re-open the case until the Court had adopted a judgment on the merits of the case. THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 § 1 AND ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION 21. The applicant complained under Article 6 § 1 of the Convention about the quashing on 27 January 2003 of a final judgment in its favour. The relevant part of Article 6 § 1 reads as follows: “In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. ...” 22. It further complained that the judgment of the Plenary of the Supreme Court of Justice of 27 January 2003 had had the effect of infringing its right to the peaceful enjoyment of its possessions as secured by Article 1 of Protocol No. 1, which provides: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.” 23. The Government, in their initial observations of 1 September 2005, denied that there had been a violation of the applicant’s rights under the Convention. However, in subsequent observations, including unilateral observations (see paragraph 24 below), they admitted the breach of the provisions of the Convention in respect of the applicant. II. THE GOVERNMENT’S REQUEST TO STRIKE OUT THE APPLICATION UNDER ARTICLE 37 OF THE CONVENTION 24. In their additional observations of 7 December 2005 the Government submitted a unilateral declaration similar to that in the case Tahsin Acar v. Turkey ((preliminary objection) [GC], no. 26307/95, ECHR 2003‑VI). They informed the Court that they were ready to accept that there had been a violation of the applicant’s rights under Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention as a result of the quashing of the final judgment in its favour. In respect of pecuniary damage, the Government proposed to reinstate the applicant in the position in which it had been prior to the quashing of the judgment of the Supreme Court of Justice of 9 October 2002, by lodging a revision request with the Plenary of the Supreme Court of Justice in accordance with section 449 (k) of CCP (see paragraph 16 above), after the Court had struck the application out of its list of cases. In respect of non-pecuniary damage, the Government proposed to award the applicant the equivalent in MDL of EUR 2,000. They also proposed to award it EUR 300 in compensation for legal costs before the Court. 25. In their second unilateral declaration of 28 March 2006 the Government submitted that the applicant should seek compensation for the breach of its rights under the Convention with the domestic courts. They mentioned several cases in which the domestic courts had acknowledged the breach of an applicant’s rights and had awarded substantial amounts of compensation (see paragraphs 17-19 above). 26. In both unilateral declarations the Government invited the Court to strike out the application in accordance with Article 37 of the Convention. 27. The applicant did not object to a possible review of the judgment after a strike-out decision of the Court. It stated, however, that even if the judgment were to be revised so as to reinstate it in the position prior to the quashing of the final judgment, it would still be entitled to compensation for pecuniary damage arising from the impossibility of using the money during the intervening period. The applicant agreed with the amount of compensation for non-pecuniary damage and considered that the costs and expenses should reflect the time spent by the representative on the case. 28. The Court observes, as it has previously stated in Tahsin Acar (cited above, § 74), that a distinction must be drawn between, on the one hand, declarations made in the context of strictly confidential friendly-settlement proceedings and, on the other, unilateral declarations – such as the present declarations – made by a respondent Government in public and adversarial proceedings before the Court. In accordance with Article 38 § 2 of the Convention and Rule 62 § 2 of the Rules of Court, the Court will proceed on the basis of the Government’s unilateral declarations and the parties’ observations submitted outside the framework of friendly-settlement negotiations, and will disregard the parties’ statements made in the context of exploring the possibilities for a friendly settlement of the case and the reasons why the parties were unable to agree on the terms of a friendly settlement. 29. The Court considers that, under certain circumstances, it may be appropriate to strike out an application under Article 37 § 1 (c) of the Convention on the basis of a unilateral declaration by the respondent Government even if the applicant wishes the examination of the case to be continued. It will, however, depend on the particular circumstances whether the unilateral declaration offers a sufficient basis for finding that respect for human rights as defined in the Convention does not require the Court to continue its examination of the case (see Tahsin Acar, cited above, § 75). 30. Relevant factors in this respect include the nature of the complaints made, whether the issues raised are comparable to issues already determined by the Court in previous cases, the nature and scope of any measures taken by the respondent Government in the context of the execution of judgments delivered by the Court in any such previous cases, and the impact of these measures on the case at issue (see Tahsin Acar, cited above, § 76). 31. The foregoing list is not intended to be exhaustive. Depending on the particular circumstances of each case, it is conceivable that further considerations may come into play in the assessment of a unilateral declaration for the purposes of Article 37 § 1 (c) of the Convention (see Tahsin Acar, cited above, § 77). 32. As to whether it would be appropriate to strike out the present application on the basis of the unilateral declarations made by the Government, the Court notes in the first place that on 21 February 2005 the Plenary of the Supreme Court of Justice already dismissed an attempt to initiate revision proceedings. It therefore considers that the striking out of the present application by the Court would not guarantee a successful outcome to the second attempt to review a judgment. Moreover, it is to be noted that the provisions of section 449 (k) (see paragraph 16 above) do not provide as a ground for revision a decision of the Court to strike the application out of its list of cases. 33. In any event, and more fundamentally, the Court considers that it would be too onerous in a case where the applicant is complaining about the quashing of a final judgment through annulment proceedings to require him to initiate another round of domestic proceedings for compensation. Such a proposal therefore cannot be considered appropriate redress or as a basis on which to strike an application out of the list of cases (see Brumărescu v. Romania [GC], no. 28342/95, § 50, ECHR 1999‑VII and Macovei and Others v. Moldova, nos. 19253/03, 17667/03, 31960/03, 19263/03, 17695/03 and 31761/03, § 36 and 37, 25 April 2006). 34. Finally, although the Government accepted in their unilateral declarations that the upholding by the Supreme Court of Justice of the Prosecutor General’s request for annulment and the quashing of the judgment in favour of the applicant constituted violations of Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention, they did not offer any redress in respect of pecuniary damage for its inability to use the money during the intervening period. 35. On the facts and for the reasons set out above, the Court finds that the Government have failed to submit a statement offering a sufficient basis for finding that respect for human rights as defined in the Convention does not require the Court to continue its examination of the case (see, by contrast, Akman v. Turkey (striking out), no. 37453/97, §§ 23-24, ECHR 2001‑VI). 36. This being so, the Court rejects the Government’s request to strike the application out under Article 37 of the Convention and will accordingly pursue its examination of the admissibility and merits of the case. III. ADMISSIBILITY OF THE COMPLAINTS 37. The applicant complained that its rights under Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention were violated by the fact that the Plenary of the Supreme Court of Justice upheld the Prosecutor General’s request for annulment and quashed a final judgment in its favour. 38. The Government, in their initial observations of 1 September 2005, denied that there had been a violation of the applicant’s rights under the Convention. 39. The Court considers that the applicant’s complaints under Article 6 § 1 and Article 1 of Protocol No. 1 to the Convention raise questions of law which are sufficiently serious that their determination should depend on an examination of the merits and no other grounds for declaring them inadmissible have been established. 40. The Court therefore declares these complaints admissible. In accordance with its decision to apply Article 29 § 3 of the Convention (see paragraph 4 above), the Court will immediately consider the merits of these complaints. IV. MERITS 41. The Court has found violations of Article 6 § 1 of the Convention and Article 1 of Protocol No. 1 to the Convention in numerous cases raising issues similar to those in the present case (see, among other authorities, Brumărescu v. Romania, cited above, §§ 61 and 74 and Roşca, cited above §§ 29 and 32). 42. Having examined the material submitted to it, the Court notes that the Government have not put forward any fact or argument capable of persuading it to reach a different conclusion in the present case. 43. Having regard to its case-law on the subject, the Court finds that by quashing the final judgment in favour of the applicant, the Plenary of the Supreme Court of Justice breached the applicant’s right to a fair hearing under Article 6 § 1 of the Convention and its right to the peaceful enjoyment of possessions under Article 1 of Protocol No. 1 to the Convention. 44. There has accordingly been a violation of Article 6 § 1 of the Convention and of Article 1 of Protocol No. 1 to the Convention in respect of the applicant. V. APPLICATION OF ARTICLE 41 OF THE CONVENTION 45. Article 41 of the Convention provides: “If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.” A. Pecuniary damage 46. The applicant claimed MDL 244,939 (EUR 21,050.46 at the time) as awarded by the Supreme Court of Justice in its final judgment of 9 October 2002. It also asked for EUR 50,064 in compensation for pecuniary damage suffered as a result of its inability to use its money since 27 January 2003, when the violation occurred. 47. The Government considered that the applicant was not entitled to receive compensation in respect of pecuniary damage and that it should seek compensation before the domestic courts (see paragraph 25 above). 48. The Court considers that the applicant must have suffered pecuniary damage as a result of the quashing of the final judgment favourable to the applicant and as a result of the impossibility to use and enjoy the money awarded to it for a period of approximately forty-six months (see Prodan v. Moldova, no. 49806/99, § 71, ECHR 2004‑III (extracts)). Taking into account the line of approach in the Prodan case, and the circumstances of the case under consideration, the Court awards the applicant the total sum of EUR 28,333 for pecuniary damage. This amount includes the sum awarded to the applicant by virtue of the judgment of 9 October 2002 and the lost interest. B. Non-pecuniary damage 49. The Court notes that the applicant was satisfied with the amount proposed by the Government (see paragraph 24 above), which corresponds to amounts awarded by the Court in similar cases (see, for example, Roşca, cited above, § 41). It therefore awards the applicant EUR 2,000 in compensation for non-pecuniary damage. C. Costs and expenses 50. The applicant claimed EUR 2,630 in respect of costs and expenses incurred before the Court. The fees of the representative who presented the case before the Court amounted to EUR 935.17 and those of the representative who presented the case before the domestic courts amounted to EUR 1,595.87. The applicant presented two receipts which showed that the representatives had been paid these fees. Other costs incurred for the representation before the Court amounted to EUR 50. 51. The Government disagreed with the amounts claimed by the applicant and stated that they were too high in the light of the average monthly wage in Moldova. 52. The Court recalls that in order for costs and expenses to be included in an award under Article 41, it must be established that they were actually and necessarily incurred and were reasonable as to quantum (see, for example, Amihalachioaie v. Moldova, no. 60115/00, § 47, ECHR 2004‑III). 53. In the present case, regard being had to the receipts submitted by the applicant, the above criteria and the complexity of the case, the Court considers an award of EUR 985 should be made for the Convention proceedings. D. Default interest 54. The Court considers it appropriate that the default interest should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points. FOR THESE REASONS, THE COURT UNANIMOUSLY 1. Rejects the Government’s request to strike the application out of the list; 2. Declares the application admissible; 3. Holds that there has been a violation of Article 6 § 1 of the Convention; 4. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention; 6. Holds (a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the following amounts, to be converted into the national currency of the respondent State at the rate applicable at the date of settlement, plus any tax that may be chargeable; (i) EUR 28,333 (twenty eight thousand three hundred and thirty three euros) in respect of pecuniary damage; (ii) EUR 2,000 (two thousand euros) in respect of non-pecuniary damage; (iii) EUR 985 (nine hundred and eighty five euros) in respect of costs and expenses; (b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points; 7. Dismisses the remainder of the applicant’s claim for just satisfaction. Done in English, and notified in writing on 13 February 2007, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court. T.L. EarlyNicolas BratzaRegistrarPresident [1] The application Moldovahidromaş v. Moldova, no. 30475/03 was declared partially admissible by the Court on 4 April 2006. The applicant company complained about a breach of principle of legal certainty, since in 2002 the Supreme Court of Justice had quashed a judgment of 1992, by which the JSC Hidrotehnica's constitution as an independent company from JSC Moldovahidromaş had been declared unlawful.

Mr Justice Langstaff: On 10 November 2010 the justices from the county of West Yorkshire sitting at Dewsbury acquitted the respondent, Angus Heron Limited, of five informations that alleged failures to comply with enforcement notices which had been respectively served on 13 August 2007 and 15 September 2009. The magistrates stated a case for determination by this court on 9 February 2011 at the request of the prosecutor, Kirklees Council. The Law An enforcement notice may be issued under the Town and Country Planning Act 1990 to enforce planning control. Section 179 of the Act provides that where an enforcement notice is not complied with that constitutes an offence. By Section 285, headed "Validity of Enforcement Notices and Similar Notices", the following, so far as material, is provided: "(1) the validity of an enforcement notice shall not, except by way of an appeal under Part VII, be questioned in any proceedings whatsoever on any of the grounds on which such an appeal may be brought." There are then provisions which do not apply to the present case. It is thus plain that the validity of an enforcement notice may not be challenged before a magistrates' court or a crown court hearing an allegation that enforcement notice has not been provided if and insofar as it was open to the person subject to the notice to appeal against it under Part VII. The material provision in Part VII is Section 174, headed "Appeal against enforcement notice". It provides, so far as material, as follows: "1) A person having an interest in the land to which an enforcement notice relates or a relevant occupier may appeal to the Secretary of State against the notice, whether or not a copy of it has been served on him. (2) An appeal may be brought on any of the following grounds: (a) that, in respect of any breach of planning control which may be constituted by the matters stated in the notice, planning permission ought to be granted or, as the case may be, the condition or limitation concerned ought to be discharged; (b) that those matters have not occurred; (c) that those matters (if they occurred) do not constitute a breach of planning control; (d) that, at the date when the notice was issued, no enforcement action could be taken in respect of any breach of planning control which may be constituted by those matters; (e) that copies of the enforcement notice were not served as required by section 172; (f) that the steps required by the notice to be taken, or the activities required by the notice to cease, exceed what is necessary to remedy any breach of planning control which may be constituted by those matters or, as the case may be, to remedy any injury to amenity which has been caused by any such breach; (g) that any period specified in the notice in accordance with section 173(9) falls short of what should reasonably be allowed." It is common ground that no issue arises here as to the formal validity of the enforcement notices. Section 174 does not deal with formal validity in the sense that there may be occasions when enforcement notice is fraudulently procured or has not been properly made by the body otherwise entitled to make it. None of those issues arise here, though they are open to challenge before a magistrates' court if there is a proper ground for challenging them. Here the first enforcement notice was dated 13 August 2007. It alleged a breach of planning control as follows: "Without planning permission: The material change of use of the land from an industrial estate, primarily General Industrial (B2) to use for the storage of scrap, un-roadworthy vehicles, old tyres, disused engines and parts of vehicles." By Section 5 of the notice it required the respondent to: "(i) Cease the use of the land for storage of scrap vehicles, plant and machinery, and for the parking of un-roadworthy vehicles (ii) Remove from the land all scrap vehicles, plant and machinery and old tyres, disused engine parts and parts of old vehicles (iii) Remove from the land all unroadworthy vehicles" Three months was given for compliance. As to that notice, an appeal was entered by the respondent, but negotiations followed, essentially as to providing a timetable for compliance. That having been agreed, the appeal was withdrawn, and so it is common ground that the notice stands as it is. On 15 September 2009 a second notice was issued. This again affected land at Hillside Works, Whitehall Road, Unsworth, Heaton in West Yorkshire, but in this case a different part of that land from the part which had been referred to in the first notice. The wording was similar but not identical. It alleged a breach of planning control in that there had been a material change of use from general industrial use [B2] to a mixed use for the storage of operational vehicles, plant and equipment, and for the storage and dismantling of scrap and disused vehicles and the storage of old tyres. Under Part 5 it required the respondent within three months to cease the use of the land for the storage and dismantling of scrap and of disused vehicles and the storage of old tyres and to remove from the land all scrap and disused vehicles and all old tyres being stored on the land. There was an appeal on this occasion which was heard by a planning inspector appointed by the Secretary of State for that purpose. He gave his decision in a letter of 28 January 2010. He rejected the appeal and upheld the enforcement notice. He explained his reasoning in a little over one page of text. He recorded there that there had been an appeal on ground C that the matters did not constitute a breach of planning control. He founded part of his dismissal of that appeal on the basis that the respondents operate a plant hire business from Hillside Works. He took the view that a plant hire use did not fall within any class of use permitted by Class B2 of the Town and Country Planning (Use Classes) Order 1987 and therefore thought it unnecessary to enquire as to whether the storage and dismantling of scrap and tyres was incidental to that use. He appeared to think that it was that use which the respondents were contending was the use for which they had bought the land. He also dealt with an appeal which was on the question of the time and saw no reason why the full requirements of the notice should not be complied with within three months. There was no further appeal from his decision, as there might have been to this court under Section 289 of the Act. Accordingly, at the conclusion of any time for appealing the enforcement notices were and remain valid. In the informations which were laid before the magistrates it was alleged that the terms of those notices had been broken. Thus the issue for the magistrates was, as Mr Owen who appears for the respondents accepts, the issue of whether the respondents were doing on the land that which the enforcement notices prohibited them from doing within their terms, or/and had failed to do that which the notices required them to do. In practical terms that means that the magistrates should have looked to see whether, in respect of the land the subject of the first enforcement notice, it had been proved so they were sure, this being a criminal case, that the land was being used for the storage of scrap vehicles, plant and machinery for the parking of unroadworthy vehicles, and whether the council had proved that the respondent had not removed from the land all the scrap vehicles, plant and machinery and all old tyres, disused engine parts and parts of old vehicles and all unroadworthy vehicles; and likewise, in respect of the second enforcement notice, whether the respondents had ceased use of the land for the storage and dismantling of scrap and disused vehicles and the storage of old tyres and whether they had been satisfied, so that they were sure, that the defendants had remove d from the land all the scrap and disused vehicles and all tyres being stored on the land. The issue was simple. As Lord Hoffman said in the case of Reg v Wicks [1998] AC 92 at page 121: "The duty of the landowner is perfectly clear: if the enforcement notice has not been quashed, he must obey it". At page 122, between letters C and D, he said this: "…the offence is to disobey an enforcement notice which has not been quashed and the fact that the decision to issue it or not to quash it involved the exercise of discretion is irrelevant… " Between letters F and G on the same page: "All these reasons lead me to conclude that "enforcement notice" in section 179(1) means a notice issued by a planning authority which on its face complies with the requirements of the Act and has not been quashed on appeal or by judicial review." There was in that particular case no dispute that Mr Wicks had failed to comply with such an enforcement notice and he was therefore guilty of the offence. He had commented earlier (see page 120 between letters A and B) in respect of the Act of 1960, which was the Act he considered, that: "… the planning merits of the enforcement notice were unsuitable for decision by a magistrates' court. [The Act] not only transferred the right of appeal to the minister (now the Secretary of State) but excluded challenge on most such grounds in any other proceedings. The present position is that no challenge is possible on any ground which can form the subject-matter of an appeal." That was in the context (see 119 of G to H) that over the years there had been a consistent policy progressively restricting the kind of issues which a person served with an enforcement notice could raise when he prosecuted for failing to comply. The reasons for that policy restriction were, said Lord Hoffman, clear: "…they relate, first, to the unsuitability of the subject-matter for decision by the criminal court; secondly, to the need for the validity of the notice to be conclusively determined quickly enough to enable planning control to be effective and to allow the timetable for service of such notices in the Act to be operated; and thirdly, to the fact that the criminal proceedings are part of the mechanism for securing the enforcement of planning control in the public interest." Those observations, derived as they are from the statutory predecessor of the statute with which I am concerned here, indicated clearly to the magistrates the task which they had to fulfil. I turn, after that introduction, to the case as stated. The case set out the procedural and factual background in respect of which there was no contention, but found as facts at paragraphs 2(k) and (l) as follows: "(k) The respondent owns and operates a number of vehicles, plant machinery and equipment, all of which are of a specialist nature and of high value. The respondent has facilities for carrying out maintenance, repairs and refurbishment in four garages, three with pits and employs mechanics and fitters for this purpose. (l) When vehicles, plant machinery and equipment are no longer operational and it is not economic to repair them for use, they are kept on site for some time, so the specialist parts may be reused on the respondent's operational fleet. Once the vehicles etc have been cannibalised the remains are scrapped. The respondent disposes of scrap or waste every six to eight months. The respondents do not buy in scrap from others nor do they supply scrap to third parties." The appellant's contentions, as prosecutor before the court, were simplicity itself. The enforcement notice meant what it said but it had not been complied with. The respondent set out arguments which were represented by the justices as follows, at paragraph 4: "It was contended by the respondent that: The acts complained of in the enforcement notices are ancillary to the respondent's main use, so the enforcement notices are still valid, however they cannot apply to ancillary use. It is stated in the Town and Country Planning Encyclopaedia of Planning by Sweet and Maxwell under the heading 'Construing enforcement notices in criminal proceedings' that at paragraph (3) 'an enforcement notice may not take away the defendant's lawful use rights. Although the Secretary of State on an enforcement appeal may, under s176, vary an enforcement notice so as to protect such rights, there is no obligation upon him to do so in the case where such rights have an independent existence, such as ancillary use rights, or permitted development rights. It follows that the court must, if the matter is put in issue, examine the extent to which an alleged failure to comply with a valid notice consists of the carrying on of an activity which the defendant is otherwise entitled to carry on without further planning permission, and to pursue the notice for not extending to that activity." It was agreed that the permitted use of the land fell within use Class B2. The findings in paragraph 5 were that the respondent's business was to provide services to local authorities and other businesses in clearing and gritting roads, removing spillages on roads, clearing drains and gullies, et cetera. All those services were provided by the supply of vehicles, plant machinery and equipment with the provision of drivers and operators. The bench found the use of the land at Hillside Works was for the storage, maintenance and repair of the respondent's operational vehicles, plant machinery and equipment. They then said this: "We are of the opinion that this primary use falls within the classification 'general industrial Class B2 use' for the carrying on an industrial process as defined in the Town and Country Planning (use classes) Order 1987. We have considered the appeal decision of PS Rogers, the Inspector appointed by the Secretary of State for the Local Government given on 28 January 2010. However, from the evidence we have considered we do not find that the use of the land detailed in the enforcement notice served on 15 September 2009 as 'a plant hire use' as found by the Inspector. Neither do we find that this particular piece of land has been used as a 'business for the hire of motor vehicles'. We find the vehicles, plant machinery equipment and respondents operational fleet are specialist items for which parts are not obtainable and not readily available. We find the storage of the non-operational vehicles etc, so their specialist parts may be used to repair the respondent's operational fleet, is an ancillary use of the respondent's primary use of the land outlined in the enforcement notices. We consider the enforcement notices cannot prevent the respondent from carrying on their lawful ancillary use rights. Accordingly, we find the respondent not guilty and dismiss all five allegations." The magistrates posed three questions. The terms of the questions are, in my view, important in understanding what the magistrates thought that they were doing in coming to the decisions they did: "1) In acquitting the Respondent, were the Justices entitled to go behind the said enforcement notices and the Appeal Decision of Mr B. S. Rogers, Inspector, appointed by the Secretary of State for Communities and Local Government, dated 28 January 2010, and find that storage within the site was lawfully ancillary to the Respondent's primary business? The justices are invited to take into account, inter alia, Section 285 of the Town and Country Planning Act 1990 and the Mansi doctrine as stated in Mansi v Elstree Rural District Council [1964] 16 P7CR 153, wherein, in relation to ancillary use, there must be lawful use of the said land, and the Inspector found there was not a lawful use within the classification 'general industrial use B2', as defined in the Town and Country Planning (Use Classes) Order 1987? 2) Given that the land in question was classified for general industrial use B2, were the activities complained of at the trial and set out in the said Enforcement Notices, within the general industrial use B2 classification, notwithstanding the decision of the Inspector Mr Rogers, dated 28 January 2010? 3) Following the Inspector's Decision, dated 28 January 2010, were the Justices entitled, in law, to conclude that the Respondent's use as set out was lawful?" These observations arise. First, it is plain that the justices thought that they were "going behind" the enforcement notices. It is plain that in using the expression "were the activities complained of at trial and set out in the said enforcement notices…" the justices were indicating, on paper at any rate, that the activities which were set out in the enforcement notices as those which had to stop were matters which they could consider in order to determine whether they were or were not within general industrial use B2. It is plain from the third question that the magistrates thought that they were departing materially from the view and approach which the planning inspector had taken. It is accepted by Mr Owen that justices are not entitled to go behind enforcement notices; that is the effect of the provision of Section 285, at least insofar as that is relevant to this case. There was no dispute here that the council had a power to issue enforcement notices; there is no challenge to their formal validity. If the justices thought they were going behind the enforcement notices it must, it would appear, have been on some basis which they thought justified them taking a view that the enforcement notices should not be applied as they stood to the actions of which they had evidence before them. It is accepted by Mr Owen that insofar as question number 2 detailed activities complained of at trial "and as set out in the said enforcement notices" [emphasis supplied] it was in error if it is suggested that the magistrates were not obliged to take the enforcement notice at face value, though open to proper construction, and it seems to me that he was right so to accept. He does submit, however, that the law is not quite as simple and as straightforward in its application in this case, as Mr Holroyd's arguments for the council would suggest. Thus he develops his argument by reminding me of the decision in Mansi to which the magistrates were referred and to which they referred in their questions. Mansi was a case in which the matter which came before a divisional court in 1964 arose under the Town and Country Planning Act 1962. Counsel have not suggested that there is any material difference in the legislationthen applicable to that with which this hearing is concerned, but it is plain that the appeal which the divisional court considered was an appeal against the notice itself. The court was not considering the question of enforcement action based upon the enforcement notice, once held valid and once any appeal route was excluded. The factual situation was that land occupied by the appellant had been used for many years as a plant nursery for which on part of the land some retail sales of nursery produce and other articles took place. In 1959, however, the use for retail sales intensified until the glass house concerned became primarily a shop. An enforcement notice was served reciting that there had been a change of use from use for agricultural purposes to use for the sale of goods, requiring the appellant to discontinue the latter use. The appeal, first to the Minister which was dismissed but then to the divisional court, was eventually allowed in part. The relevant passage in the judgment of Widgery J, as he was, was this: "Counsel for the appellant's other point of course was on very much stronger ground. Indeed it seems to me quite unanswerable when he alleges that the notice and the form in which it was served went too far. On Minister's own finding there was a very old established use affecting these premises for the sale of goods by retail. True, that use is a limited and restricted one, but nevertheless the planning Act gave no power to the local planning authority to restrict or remove that use, such as it was. It seems to me that when this matter went before the Minister, the Minister should have recognised that a notice requiring discontinuance of all sale of goods went too far and that he ought to have amended the notice under the powers given to him so as to make it perfectly clear that the notice did not prevent the appellant from using the premises for the sale of goods by retail, provided that such sale was on this scale and in the manner to which it was entitled in 1959 as the Minister himself had found. True, that use was a subsidiary one, but nevertheless it should be protected, and in my judgment this appeal should be allowed to the extent that the decision in question should be sent back to the Minister with a direction that he ought to amend the notice so as to safeguard the appellant's established right as found by the Minister to carry on retail trade in the manner and to the extent to which the Minister has found it was carried on in 1959." That authority, in my view, is of no direct assistance in construing an enforcement notice in respect of which there is no further appeal. It does not say that provisions within an enforcement notice should not be observed, and it does not permit those provisions to be sidestepped. The planning encyclopaedia to which the magistrates were referred under a passage headed "construing enforcement notices in criminal proceedings P179.17" says: "The practical implications of the Mansi doctrine [as it is called] appear to be: […] (3) an enforcement notice may not take away the defendant's lawful use rights. Although the Secretary of State on an enforcement appeal may, under s.176, vary an enforcement notice so as to protect such rights, there is no obligation upon him to do so in cases where such rights have an independent existence, such as ancillary use rights, or permitted development rights. It follows that the court must, if the matter is put in issue, examine the extent to which an alleged failure to provide the valid notice consists of the carrying on of an activity which the defendant is otherwise entitled to carry on without further planning permission, and to construe the notice if not extending to that activity." It gives an example as where the breach to which notice is directed is the repair of motor vehicles in a commercial basis from a private garage. A requirement to cease using the garage for motor vehicle repairs may be construed as not extending to the maintenance of the defendant's own vehicle; plainly, anyone normally would be entitled to repair their own vehicle in their own garage, not on a commercial scale and that would not be precluded. It is commented that that approach has been confirmed by the Court of Appeal in the case of Duguid v Secretary of State for the Environment of Transport and the Regions [2001] 82 Planning and Compensation Reports 6. In that case the appellant owned part of a disused airfield where he held Sunday markets and car boot sales. He was served with an enforcement notice requiring him, amongst other things, to cease using the land for the purposes of markets and/or car boot sales. The enforcement notice was upheld, but it was not amended so as to safeguard what were permitted use rights under the Town and Country Planning General Community Development Order 1995 which permitted temporary use of the land for the holding of markets for not more than 14 days in total in any calendar year. When the matter came before the Court of Appeal the court dismissed the appeal, again in respect of the terms of the notice, under what is effectively Section 176. It was not necessary to amend expressly an enforcement notice in order to safeguard an occupier's lawful use rights. The purpose of the Act was to define the activity which was to cease - the activity which constituted a breach of the planning permission - and not to encompass any activity which could lawfully be carried on. An occupier is entitled to use an enforcement site for permitted development purposes once he has indicated that he has ceased to use it for and has in fact discontinued the permanent purposes prohibited by the enforcement notice. As Ward LJ observed, paragraph 33: "The appellant is entitled to use his land for GPDO purposes once he has indicated that he has ceased to use it for and has in fact discontinued the permanent purposes prohibited by the enforcement notice. The enforcement notice is clear and certain and requires no amendment." What is argued by Mr Owen is that the prosecution, who had the burden of proof, did not here prove that the respondents had broken the terms of the enforcement notice properly construed. Properly construed, those notices would not prohibit use which was lawfully ancillary to Class B2 use and that, as a matter of fact, was what the magistrates found had been carried on. Accordingly, he submits that the questions, despite their infelicities, which he accepts to exist, should be answered in each case by "yes". Discussion As Lord Hoffman observed, the purpose of an enforcement notice is to provide clarity as to what is required in order to comply with planning control. If an enforcement notice is not amended or appealed within the detailed statutory provisions permitted, then it stands in its terms and it cannot be attacked on any basis in respect of which an appeal under Section 174 would run. Any argument, therefore, to the effect that what the respondents were doing on the site at Hillside Works affected by the enforcement notice of 13 August 2007 and on that other part of the site affected by the notice of 2009 could be said not to constitute a breach of planning control by the magistrates must fail, if that is what the enforcement notice itself said. Thus the magistrates were bound to accept the terms of the enforcement notice, in the first case that the change of use had occurred, and the description of the use to which the enforcement notice related. It was open to the respondent to show that it had ceased the use of the land for the storage of scrap vehicles et cetera and it would be open to the respondent to show that if there was a scrap vehicle or unroadworthy vehicle on the land that its presence, and what the respondent did with or to it, was of a different order from the acts which were prohibited by the enforcement notice, such that it was in fact an ancillary use which was lawful, as in the case of the private garage owner and as in the case of the land owner who was permitted on a few occasions to use his land for the temporary market purposes which the GPDO permitted. Upon a construction of the enforcement notice, however, the starting point is the terms of the notice. What the prosecution had to prove was that the land was still being used for storage of scrap vehicles plant and machinery, and whether the respondents had removed all the scrap vehicles plant and machinery, and all unroadworthy vehicles, (subject only to the point as to ancillary use to which the cases refer) was that which the magistrates had to investigate What the magistrates court did, however, was make no findings as to whether or not there had been compliance with the enforcement notice. It made no findings in the terms of Duguid that the respondent had ceased to use the land for the prescribed purpose and had discontinued the permanent purposes prohibited by the enforcement notice but was now using it for the purposes for which he had always been entitled to use it lawfully. It made no finding as to whether the respondent had complied with the clear terms of the enforcement notice. It appears that the justices were influenced by a passage in the Town and Country Planning Encyclopaedia into thinking that they were entitled to make findings for themselves as to whether the matters which had been prohibited by the enforcement notice were matters which could nonetheless lawfully have been carried out within the planning law. It is not for the justices to consider planning issues; that is for other parties in the system provided for by the Town and Country Planning Act: in the first place for the Secretary of State through his inspector, and in the second place for this court if there should be any appeal about it. The justices appear to think in question number 1 that they were "going behind" the enforcement notice. They had no right to do so. If that is what they were doing then the decision was flawed. I accept Mr Owen's submission that the justices were entitled to disregard the reasoning of the inspector as being the opinion of another person in respect of the facts placed before him, but they could not go behind his decision, which was to hold the enforcement notice valid. The form of the questions suggests that here the justices thought that they might not comment directly as to the validity of an enforcement notice but could disregard effectively what it required. It should be clear from the law which I have recited that they could not do so and that that was an error of law. In my view, therefore, the answer to the first question was no. The answer to the second question -- were the activities complained of at the trial and set out in the said enforcement notices within general industrial use B2 classification notwithstanding the decision of the inspector? -- would be unexceptional if it omitted the words "and set out in said enforcement notices", but it does not. The question effectively asks whether what was set out as prohibited by the enforcement notice was actually within general industrial use B2? That was not a question which the magistrates had any right to ask. They could ask whether the respondents had complied with the enforcement notice; they could ask, having complied with it, whether what still might appear to be a breach, in the sense that there were unroadworthy vehicles or tyres on the site, was in truth use ancillary to what, it was common ground, was a general industrial use. But they did not analyse the case in that way, and therefore it follows that the second question also must be answered no. As to the third matter, the justices were entitled to conclude that the respondent's use of the land was lawful in general terms, but it would be a question which would be, in this context, meaningless. Again the problem arises from the first four words of the third question. The magistrates drew a link between their decision and the inspector's and thought, or appeared to think, that their decision was contrary to the decision which the inspector had reached. If so, it was contrary to a decision that the enforcement notice was valid; the justices were not entitled to conclude the opposite. I am not convinced that the third question requires an answer given the answers to the first two questions, but, insofar as it does, I would answer the question no; the premise is wrong. The findings to which this court has come are that the magistrates proceeded on a wrong footing in the law; they had the wrong focus; they did not ask themselves the right factual questions. As I have observed in their determination in the case the magistrates do not appear to have answered whether there was or was not compliance in fact with the enforcement notices, and although there is a heavy hint that the enforcement notices had not been complied with this is, in my view, insufficient in any criminal case to justify this court in exercising its powers to remit the case with a direction to convict. It follows that what I have said thus far is that this appeal must be allowed and I shall hear counsel as to any consequential orders which need to be made. MR HOLROYD: My Lord, given your decision, and I accept it is quite proper, that this court cannot direct conviction, the matter must, in my submission, be remitted back to the magistrates for them to answer properly the issue of whether, on the face of the enforcement notices, what is not allowed and what is required to be done has in fact been done. Those are the matters the magistrates' court need to address. I accept your Lordship says there is a hint there that these matters have not been addressed and complied with but the magistrates have to answer that question. MR JUSTICE LANGSTAFF: Well, it's a criminal case and therefore a court has to be satisfied on the appropriate standard that the prosecution has proved the facts. Because the approach appears to have been cockeyed in law they have to address those questions. It would seem, as I have already said, wrong of this court to invite them to convict on the basis of findings which are incomplete and misdirected. MR HOLROYD: Indeed my Lord. So I … my submission is it should be remitted to the magistrates court for them to address the issues that your Lordship has referred to this morning, namely without planning permission these matters have occurred, it cannot be challenged, and what is required is within three months the various requirements that are set out in both enforcement notices have to be complied with, and if the magistrates find they have not then of course they should convict on these matters. MR JUSTICE LANGSTAFF: Mr Owen, what do you say? MR OWEN: My Lord, I agree with respect that the appropriate order would be to remit to the justices for further consideration in the light of your Lordship's judgment. That would suffice in my submission. MR JUSTICE LANGSTAFF: Yes, I think so. So be it. So it follows that I am going to quash the determination MR HOLROYD: Yes. MR JUSTICE LANGSTAFF: So, quash the determination and remit to the magistrates for consideration in the light of the judgment. MR HOLROYD: My Lord, the question of costs today… MR JUSTICE LANGSTAFF: Yes. MR HOLROYD: I don't know whether your Lordship has received a copy of the claimant's schedule of costs. MR JUSTICE LANGSTAFF: I did. I confess I haven't looked at it. Do you have a spare copy? MR HOLROYD: I do, my Lord. MR JUSTICE LANGSTAFF: Mr Owen, what do you say? MR OWEN: My Lord, there is one other matter I would wish to add to this. I suspect my fees should be subject to VAT, that VAT should be added to that. My instructing solicitors say that that figure of £4,800 is exclusive of VAT and that would add another £960 to the … MR JUSTICE LANGSTAFF: And is there an appropriate certificate which should accompany that at this claim for VAT? MR OWEN: There is no certificate I am informed, my Lord MR JUSTICE LANGSTAFF: In which case I cannot add VAT, can I? MR OWEN: I think that is probably correct. I think as well because a similar costs schedule from the defendants, if the matter had come to a different conclusion, had added VAT, but perhaps you have a certificate, I have no certificate MR JUSTICE LANGSTAFF: Mr Holroyd, what do you want to say MR HOLROYD: My Lord, so far as the detail of the claim is concerned, it is rather difficult for me to say anything other than perhaps the amount of time is perhaps longer than it might have been, but a more substantive point I seek to make is this, and I proceed to ask your Lordship to consider in terms of costs the question of discretion so far as an order my client is concerned in the circumstances where the justices have not addressed the issues in the way in which they should have been addressed. I appreciate of course that we were before the court and my instructing solicitor is taking submissions to the court, but so was the prosecution. Is it right in these circumstances, given that there is no direction for this court (inaudible) to the justices to convict, and there is a decision that requires them to reconsider in a way in which they should have been, is it right and appropriate in those circumstances for my client to bear the cost? MR JUSTICE LANGSTAFF: Well, I would have perhaps more sympathy with that submission had it … had there been some evidence that those instructing you had proposed to the defendants that this court be invited to consider the case stated and to remit for a rehearing, particularly given the terms of the questions which I (inaudible). But they didn't; that is their entitlement, but it comes at a cost to the claimant, the appellant. So for that reason, I mean in principle, I am against that submission. MR OWEN: (?) Would your Lordship consider a percentage rather than… MR JUSTICE LANGSTAFF: Well, it does occur to me that there was no order… I have not been invited to make any order in respect of the costs awarded below. The order of the magistrates has been quashed, but plainly you are entitled to (inaudible) acquitted at the next hearing to say, well, the hearing has effectively gone on not only today and this part of the hearing but before the previous bench, and they did not address the matter properly. That is not your client's fault; and so the appropriate time (inaudible) would be at that stage and you say, look, therefore either we shouldn't have to pay those costs to the bench rehearing the matter, or if you succeed we should get all our costs… MR OWEN: Yes MR JUSTICE LANGSTAFF: I don't think it is appropriate to deal with that issue on this appeal for those reasons. So I will award the costs against your client the question now is the amount. MR OWEN: Well, I have … this is a (inaudible) my Lord in the circumstances I make the one point which I can reasonably make and that is as to quantum of the time, but (inaudible) there is nothing (inaudible) realistically have. MR JUSTICE LANGSTAFF: Yes, the approach I have to take is first standing back and looking to see whether some looks proportionate or disproportionate, and if it is plainly disproportionate then one looks more carefully and scrupulously at each individual item. That is the correct approach, isn't it? MR OWEN: I agree. MR JUSTICE LANGSTAFF: £6,730 on a case stated schedule (inaudible) may be a little bit less, but it is not on the face of it disproportionate, is it? MR OWEN: I have said what I have to say, my Lord. MR JUSTICE LANGSTAFF: So I will hear what has to be said as to the hours, there is plainly a challenge on the rates per hour, they are very modest. Mr Holroyd, there is very nearly a week's work, in fact there is exactly a week's work, 40 hours, a 40 hour week on the documents. That is a lot? MR HOLROYD: My Lord, yes, but that presumably would include right from the outset have been involved what is required of the appellant to get this matter before the court by way of case stated. It is not simply preparing the documents for this particular hearing today; there was a draft case stated produced that would have to be commented on, and in my submission the hours that are put forward are not disproportionate. I do have, my Lord, if your Lordship wished to see this, a detailed breakdown of the hours. MR JUSTICE LANGSTAFF: Well, perhaps you would pass that over to Mr Own to see if any point arises which he wants to take on that. MR OWEN: All we can do, my Lord, with this document detailed consideration, is to point (inaudible) 10 March two hours is claimed considering the skeleton (inaudible) case law and amending the skeleton. There is a separate fee for that … MR JUSTICE LANGSTAFF: Would this assist? At the moment I can see there may be points to be made about the documents. Do you want some time to do so, it is now 1.00pm. I am quite happy to come back at 2.00pm and hear any submissions the parties may wish to make. You may feel that putting your head together with Mr Holroyd in the light of my observations that the hours are a little (inaudible), and if that matter… I am not sure how far (inaudible) incur fees, but whether six hours (inaudible) is actually (inaudible) I don't know but you would … those with local knowledge would know a bit better than I do. (inaudible) I can see the (inaudible). So … On that (inaudible) agree some modest diminution in the total, but shall I retire and let you have five minutes to chat and come back into court and see where we have got to? MR OWEN: Certainly.

OPINION OF MR ADVOCATE-GENERAL WARNER DELIVERED ON 7 NOVEMBER 1973 My Lords, Your Lordships will remember that in 1962 the Council adopted a series of Regulations having as their object the gradual establishment in the then Member States of a common organization of the markets for certain agricultural products, with a view to the eventual creation of a single Community market for each of those products. In the present four cases (Cases 119, 124, 125 and 126/73) the Court is concerned with two of those Regulations, namely No 19 of 4th April 1962, which related to cereals, and No 22 of the same date, which related to poultry meat. More particularly it is concerned with the provisions of those Regulations which instituted a system of ‘levies’ in place of the divers measures theretofore taken by the Member States individually to protect their respective agricultures. Under that system of levies each Member State was enabled to continue to protect its own agriculture against imports both from other Member States and from third countries, though to a lesser extent in the case of the former than in the case of the latter. In 1967 Regulations No 19 and No 22 were superseded by, respectively, Regulation No 120/67/EEC of the Council and Regulation No 123/67/EEC of the Council, which established the common organization of the Community markets in cereals and in poultry meat, involving the removal of all protective barriers as between Member States. These four cases thus belong to a transitional period which is long since past. That is not to say that the questions they raise are wholly irrelevant to the interpretation of the Regulations now in force. Of these four cases, two (119 and 124/73) come to the Court by way of references for preliminary rulings by the Hessisches Finanzgericht, the other two (125 and 126/73) by way of similar references by the Finanzgericht Hamburg. In each case the plaintiff is a German importer of agricultural products. In the first two cases the Defendant is the Einfuhr- und Vorratsstelle fur Getreide und Futtermittel, in the third it is the Hauptzollamt Hamburg-Waltershof and in the fourth the Hauptzollamt Hamburg-Ericus. In each case the plaintiff contends that it has been subjected to excessive levy on importations into the Federal Republic effected between 1962 and 1967. The importations in question in the first case (119/73) were from third countries (the Court is not told which) and were of two different products, namely durum wheat and maize. In relation to each of these a different question is raised. The question in relation to durum wheat (as posed by the Hessisches Finanzgericht) is whether the German turnover equalization tax should have been taken into account in calculating the levy. Your Lordships will have it in mind that, over the years, a number of cases have come before the Court about this tax. Its essential feature, for present purposes, was that, although it was charged on imports, it was not a customs duty or a charge having an effect equivalent thereto. It formed part of the internal taxation system of the Federal Republic, designed as it was to correspond in the case of imports to the turnover tax imposed on home-produced goods. The question asked by the Hessisches Finanzgericht in relation to maize is, shortly, whether its ‘threshold price’ should have been fixed at the same figure as that for barley or whether those responsible for fixing it had some (and, if so, what) discretion in the matter. The importations in question in the second and third cases (124 and 125/73) were of denatured tapioca flour. In Case 124/73 the Court is not told the provenance of the importations, though they probably came from a third country, since the plant from which tapioca is derived (cassava) is not grown in the Community. In Case 125/73 the provenance was Thailand. In each of these two cases the Court is in effect asked whether the turnover equalization tax should have been deducted in calculating the levy. In one of them (124/73) it is also asked whether the cost of denaturing the tapioca flour (by the addition of colouring material) should have been deducted. The first three cases thus turn, in the main, upon the interpretation of Regulation No 19. The importations in question in the fourth case (126/73) were of frozen broiler chickens from the USA so that the regulation principally in point in that case is Regulation No 22. Here again the question is whether the turnover equalization tax should have been deducted from the levy. My Lords, although the various regulations to which I have referred all had the same essential object, they did not set out to achieve it in precisely the same way in relation to each product. This was because the relevant market considerations, and in particular the state of supply and of demand in the Member States, were not the same in relation to each product. I start with Regulation No 19. In the case of common wheat and of barley, and also of maize and of rye in those Member States producing them in significant quantities, Articles 2 to 6 of Regulation No 19 instituted the complex system which the Court had to consider in Case 76/70 Ludwig Wünsche & Co. v Hauptzollamt Ludwigshafen/Rhein (Rec. 1971, p. 393) and more recently in Case 11/73 Getreide-Import-Gesellschaft v Einfuhr- und Vorratsstelle fur Getreide und Futtermittel (not yet reported). Under that system, Your Lordships will remember, each Member State fixed annually, within limits laid down by the Council, ‘target prices’ for each of those cereals. These were the prices that that State wished to see ruling at the stage of purchase in the wholesale market in a key area, being the area within its territory with the greatest deficit of that cereal. Each Member State then fixed, again annually, corresponding ‘threshold prices’, being the prices at which the cereal in question would have to be imported into that State for it to reach its target price in the key area. Lastly, the Commission fixed (i) in respect of imports from other Member States, ‘free-at-frontier prices’, based on the prices ruling on the most appropriate market of each exporting State, and (ii) in respect of imports from third countries, ‘c.i.f. prices’, based on world market prices. Each Member State was then entitled to charge on its imports a levy equal to the difference between the relevant f.a.f. or c.i.f. price and the relevant threshold prices, subject in the case of imports from other Member States to a discount designed to give preference to such imports over those from third countries. In order to render some of the citations that I shall make more readily intelligible, I should mention that this discount was provided for by Article 2 (1) of the Regulation. The questions that arose in Cases 76/70 and 11/73 related to the method to be adopted by a Member State in fixing its threshold prices for the cereals to which that system applied, the cereal in question in the first of those cases being barley and in the second common wheat. In Case 76/70 the actual question was whether the Federal Republic, in fixing its threshold prices for barley should have made an allowance for the turnover equalization tax. That was essentially a question of interpretation of Article 4 of Regulation No 19, that being the Article which laid down the principle on which threshold prices for the cereals in question should be computed. It provided so far as relevant (there being of course no authentic English text of Regulation No 19, I read the French) ‘En ce qui concerne le blé tendre et l'orge, ainsi que le maïs et le seigle dans les États membres ayant une production notable de ces céréales, le prix de seuil est fixé annuellement par les États membres pour un standard de qualité identique, de façon que sur le marché du centre de commercialisation de la zone la plus déficitaire le prix de vente du produit importé se situe, compte tenu du montant forfaitaire prévu à Particle 2 paragraphe 1…, au niveau du prix indicatif de base prévu à Particle 5.’ Not surprisingly the Court interpreted this as meaning that the calculation of threshold prices from target prices involved the deduction from the latter of all costs that an importer must inevitably incur between the point of purchase by him from the foreign supplier and the point at which the target prices were applicable, i.e. the point of assumed sale by the importer on the wholesale market in the key area. Those costs would include such imposts as the German turnover equalization tax. This interpretation gave effect to the intention evinced by Article 4 when read in its context that the threshold price should be the price at which the importer would have had to buy from foreign supplier in order to be precluded, commercially, from undercutting the target price in the key area. It was reaffirmed and to some extent clarified in Case 11/73, which was about other costs. It is important, I think, to bear in mind that strictly, under the system instituted by Articles 2 to 6 of Regulation No 19, the relevant costs were to be deducted from the target prices in fixing the threshold prices, not from the threshold prices in calculating the levy. The calculation of the levy (under Article 2) was an automatic process. The Court did however indicate in Case 76/70 that, where a Member State had failed, in fixing threshold prices, to make an appropriate deduction, it was open to the Courts of that State to put matters right by ordering a corresponding deduction from the levy. This distinction becomes important when one comes to consider the provisions of Regulation No 19 that were applicable to cereals other than those to which Article 4 applied. As can be seen from a perusal of Regulation No 19 in the light of its preamble, the cereals to which Article 4 applied were those which the authors of the Regulation regarded as being of the greatest economic importance in the Community, and the purpose of fixing target prices for them was twofold. First it was to ensure, for those cereals, prices that would be predictable and stable, as well as reasonable, so as to afford to the farming community not only what was considered to be a fair standard of living but also the ability to plan their crops ahead. This result was to be achieved on the one hand by protection against imports and on the other by the system of intervention with which Your Lordships are familiar. Target prices served as the basis for the fixing both of threshold prices and of intervention prices. The second purpose was to achieve, by the gradual narrowing during the transitional period of the target prices for the cereals in question in the different Member States, a situation in which there would be a single target price for each of those cereals and it would thus be possible to establish a single Community market for each of them. The authors of the Regulation did not consider that the whole of that complex system was called for in the case of other cereals. Durum wheat, to take the first of them with which the Court is concerned in these cases, was scarce in the Community, whose requirements had largely to be met by imports from third countries. It could, for climatic reasons, be grown in the Community only in France and in Italy, and it was more expensive to grow than common wheat. Special provisions were therefore required for it and these were contained in Article 11 of Regulation No 19. I will not take up Your Lordships' time with a detailed analysis of this Article. Suffice it to say that it provided for target prices to be fixed only by France and by Italy, and then only for the purpose of determining intervention prices. As regards imports, Article 11, by its paragraphs (1) and (2), preserved the basic pattern of a levy equal to the difference between a threshold price and an f.a.f. or c.i.f. price, but it did not relate threshold prices to target prices. So far as the fixing of threshold prices was concerned, it provided only, by its paragraph (4): ‘Le prix de seuil du blé dur est fixé par les États membres, pour un standard de qualité identique, à un niveau supérieur d'au moins 5 % à celui du blé tendre.’ So a Member State, in fixing its threshold price for durum wheat, had a discretion either to fix it at 105 % of its threshold price for common wheat or to fix it at a higher level. Manifestly, in exercising that discretion a Member State must have regard to the effect on prices ruling in its home market of the costs which an importer of durum wheat would be bound to incur, including such taxes as the German turnover equalization tax. But that is very far from saying, as the plaintiff in Case 119/73 would have this Court say, that once the threshold price had been fixed in accordance with paragraph (4) there must be deducted from it an amount corresponding to that of any such tax. Indeed, to say this would be, as the Commission and the Federal Government point out, to contradict the express terms of paragraph (4), at all events in a case where the deduction would have caused the effective threshold price to be less than 105 % of that for common wheat. The argument put forward on behalf of the plaintiff in that case boils down, I think, to saying that the decision of this Court in Case 76/70 established a general principle not confined to the fixing of threshold prices under Article 4 of Regulation No 19 and that, unless Article 11 (4) is to be interpreted as having also incorporated that principle, its provisions were incompatible both with Article 39 and with Articles 9 and 12 of the EEC Treaty. The argument based on Article 39 turns on the fact that that Article includes among the objectives of the common agricultural policy ‘(e) to ensure that supplies reach consumers at reasonable prices’. My Lords, I do not doubt that that provision bound the Member States and precluded them, when fixing threshold prices under Article 11 (4), from fixing them unreasonably high. This is one reason for saying, as I have said, that a Member State could not properly fix its threshold prices for durum wheat at more than 105 % of its threshold prices for common wheat without having regard to the costs falling on importers of durum wheat. But I can find nothing in the papers before the Court or in the submissions that were made at the hearing that leads to the conclusion that, unless the gloss for which this Plaintiff contends is put upon Article 11, durum wheat must reach the consumer at an unreasonable price. The argument based on Articles 9 and 12 of the Treaty (and reinforced by reference to Articles 18 and 20 of Regulation No 19 itself) starts from the fact that the threshold prices fixed under Article 11 (4) of Regulation No 19 applied as well in relation to imports from other Member States as in relation to imports from third countries. The argument, as I understand it, is that, whilst neither the levy imposed by Article 11 nor the German turnover equalization tax was, by itself, a charge having an effect equivalent to a customs duty, cumulation of the two would amount to such a charge. My Lords, to my mind, the argument only has to be stated to be rejected. Two whites cannot make a black. In my opinion, the correct view is that the decisions of this Court in Cases 76/70 and 11/73 were essentially decisions on the interpretation of Article 4 of Regulation No 19. They were concerned with the method of fixing threshold prices by reference to target prices for cereals to which that Article applied — and also, as a corollary, with the method of giving effect to Article 2, dealing with the calculation of the levy on such cereals, in a case where a Member State had failed to give full effect to the requirements of Article 4. In my opinion those decisions are not really germane to the interpretation of other Articles of Regulation No 19, such as Article 11 (4), which prescribed different methods of fixing threshold prices for cereals to which Article 4 did not apply. The question referred to the Court by the Hessisches Finanzgericht in relation to durum wheat is worded as follows: ‘Is Article 11 of Regulation No 19/62 of the Council of the European Economic Community (Official Journal of the European Communities 933/62) to be interpreted in such a way that in the calculation of the levy on durum wheat the turnover equalization tax payable on imports should have been taken into account, or was this not required?’ My Lords, it seems to me that, if the Court were to answer that question simply ‘Yes’ or ‘No’, its answer would be open to two criticisms, first, that it was ambiguous and, second, that it involved applying the provisions of Article 11 rather than just interpreting them. I am therefore of the opinion that the question should be answered as follows: ‘Article 11 of Regulation No 19/62 of the Council of the European Economic Community is to be interpreted as having implied that a Member State, in exercising the discretion conferred on it by paragraph (4) of that Article, should treat as factors to be taken into account the estimated costs to be incurred by an importer of durum wheat, including any such taxes as the German turnover equalization tax, but that, once the threshold price had been fixed in conformity with that paragraph, no deduction for any such tax was to be made in the calculation of the levy pursuant to paragraph (1) or paragraph (2) of that Article.’ I turn to the second question raised in Case 119/73, which relates to maize. Your Lordships will remember that Article 4 of Regulation No 19 applied to this cereal only in the Member States having a significant production of it. It is common ground that the Federal Republic was not such a State. That being so, the relevant Article of Regulation No 19 was Article 8 (1). This applied to all cereals other than those to which Article 4 applied and than durum wheat. It provided that, as regards such cereals ‘… le prix de seuil est fixé pour chaque produit de façon telle que puisse être atteint, compte tenu du montant forfaitaire prévu à l'article 2 paragraphe 1, le niveau des prix indicatifs fixes pour les céréales indigènes visées à l'article 4, à savoir: — pour les céréales considerées comme céréales panifiables, le niveau des prix indicatifs des céréales panifiables; — pour les autres céréales, le niveau des autres prix indicatifs; Le prix de seuil est fixé annuellement par les États membres pour un standard de qualité identique …’ It is common ground that in the Federal Republic maize was not considered to be ‘panifiable’, so that it was the second subparagraph of Article 8 (1) that applied to it, and that the reference in that subparagraph to ‘le niveau des autres prix indicatifs’ was effectively a reference to the level of the target price for barley. It is not difficult to discern that the object of Article 8 (1) was to prevent undue competition by imported products with home-grown products, in this particular case undue competition by imported maize with barley in the market for animal feeds. It appears that for the year 1962/63 the Federal Republic fixed its threshold prices for maize slightly higher than its threshold prices for barley, but that for all subsequent years during the currency of Regulation No 19, it fixed the same-threshold prices for maize as for barley. The complaint of the plaintiff in Case 119/73 is as to the threshold prices for maize fixed by the Federal Republic for 1962/63. There is a hint in the observations of the Commission of the reason why the Federal Republic changed course as from 1963/64: it seems that as from that year there was, by means of decisions of the representatives of Member States at the Council, a move towards the harmonization of the methods adopted by the Member States for fixing threshold prices for feed grains by reference to those for barley. Be that as it may, the controversy between the parties in Case 119/73 is as to the scope of the discretion conferred on Member States by Article 8 (1), for neither party suggests that that Article simply required a Member State to fix the threshold prices for maize at the same figure as those for barley. The contention of the plaintiff is that the Article required a Member State to compute the threshold price for maize by deducting from the target price for barley the costs that an importer of maize would incur — in other words to carry out in relation to maize a calculation analogous to that required by Article 4 in relation to the cereals to which it applied, but using as the starting point of that calculation the target price for barley. This would produce for maize a threshold price differing from that for barley if, but only if, the costs estimated to fall on an importer of maize differed from those estimated to fall on an importer of barley. The contention of the Government of the Federal Republic is that the discretion given to Member States was wider and enabled them to take into account such factors as the relative nutritive values of the cereals in question and any special uses to which they might respectively be put by industry. The contention of the Commission goes even wider and amounts to saying that a Member State was free to fix its threshold price for maize at whatever level it thought necessary in order to ensure that imports of maize did not prevent barley from attaining its target price. The question is of course one of interpretation of Article 8 (1). Does it mean, as the Plaintiff would have it, that a Member State in the position of the Federal Republic was to fix its threshold price for maize at such a figure as to ensure that maize should reach the wholesale market in that State at the same price as the target price for barley? Or does it mean, as is implicit in the argument of the Federal Government and of the Commission, that such a State was to fix its threshold price for maize at such a figure as to ensure that barley should reach its target price? I have, after some hesitation, come to the conclusion that the latter is the correct interpretation. Not only does it fit the actual wording of Article 8 (1) better, but it makes better sense when that provision is to be applied in relation to a cereal which competes with two home grown ones. For example, assume that France was a country having a significant production of maize, so that in France Articles 4 and 5 applied to both barley and maize. Assume further that France, as it was entitled to do under Article 5, fixed different target prices for barley and for maize. What, on the Plaintiff's interpretation of Article 8 (1), was France to do when it came to apply that provision to, say, oats? Was it to make a calculation of which the starting point was the target price for barley or one of which the starting point was that for maize? On the Commission's interpretation this difficulty does not arise: France was to fix a threshold price for oats sufficient to ensure that competition from oats did not prevent either barley or maize from reaching their target prices. The question asked by the Hessisches Finanzgericht about maize is in the following terms: ‘Is Article 8 (1) of Regulation No 19/62 EEC to be interpreted in such a way that the threshold price for maize in Member States in which there is no significant production was to be fixed in such a way that it corresponded to the threshold price for barley, or was there a certain measure of discretion in respect of particular types of cereals according to their value as fodder, etc.?’ For the reasons that I have expressed I am of the opinion that that question should be answered as follows: ‘Article 8 (1) of Regulation No 19/62 EEC is to be interpreted as meaning that the threshold price for maize in a Member State in which there was no significant production of that cereal was to be fixed in such a way that (due account being taken of the discount provided for by Article 2 (1) barley should be able to reach its target price in that State.’ As I mentioned to Your Lordships, the product in question in Cases 124 and 125/73 is denatured tapioca flour. This formed part of a group of processed products identified by the combined effect of Article 1 (d) and of the Annex to Regulation No 19 which were dealt with by Article 14 of that Regulation and by a later implementing Regulation, namely Regulation No 55 of the Council of 30 June 1962. Under those provisions there were to be for those products no target prices or threshold prices. The levies on imports of them by a Member State, whether from other Member States or from third countries, were to consist of a variable component and of a fixed component. The purpose of the variable component was, in the case of products processed from basic products to which Regulation No 19 applied, to correspond to the levies on those basic products (see paragraph (1) (A) (a) of Article 14) and, in the case of other products, of which tapioca flour was one, to correspond to the levies on competing products (see paragraph (1) (A) (b) of the same Article). The purpose of the fixed component was to protect the processing industry in each Member State (see paragraph (1) (B) of Article 14). Among the products dealt with by Article 14 and by Regulation No 55 were those within heading No 11.06 of the common customs tariff, of which tapioca flour was one. The amounts of the variable and fixed components for these were prescribed by Article 7 of Regulation No 55. So far as material this Article provided, by reference to Article 9 of the same Regulation, that the variable component in the case of 100 kg of any of the products in question should be equal to the levy on 161 kg of maize, subject to a proviso, contained in paragraph (2) of Article 7, that, if the product had been denatured, the variable component applicable to 100 kg of it should be equal to the levy on 40 kg of barley. By paragraph (3) of Article 7 the fixed component was to be 1.70 u.a. where the product had not been denatured and nil where it had. It is contended on behalf of the plaintiffs in Cases 124 and 125/73 that, in the case of imports that were subject to a tax such as the German turnover equalization tax, the amount of that tax should be deducted from the levy computed in accordance with Article 7. The arguments put forward in support of that contention are substantially the same as those put forward on behalf of the plaintiff in Case 119/73 in relation to imports of durum wheat. In my opinion, my Lords, there is even less reason why they should prevail in the case of denatured tapioca flour, the provisions relating to which left no discretion of any sort to Member States, than in the case of durum wheat. A different conclusion was reached by the Bundesfinanzhof in two cases that it decided last year relating to importations of denatured tapioca flour (VII R 91/69 and VII R 118/69), but it appears from its judgments in those cases that the Bundesfinanzhof decided them as it did only because it felt bound to do so by the decision of this Court in Case 76/70. I hope that I shall be acquitted of any discourtesy to the Bundesfinanzhof if I do not repeat the reasons that have led me to the view that the decision of this Court in Case 76/70 is in point only where Article 4 of Regulation No 19 applies. I mentioned to Your Lordships that in Case 124/73 the Court is also asked by the Hessisches Finanzgericht whether the costs of denaturing the tapioca flour — to be specific the costs of adding colouring material to it — should have been deducted from the levy. The plaintiff in that case contends that they should. Its argument in support of that contention is short. It is essentially that the same reasoning applies to these costs as to the turnover equalization tax. My Lords, on this question I think I need say only that, even if I had thought that the plaintiff was right about the turnover equalization tax, I would still have thought it wrong about the costs of denaturing. These formed part of the costs of producing the goods to which the levy attached and as such could not conceivably, in my opinion, enter into the computation of the levy. On this, I observe, that my conclusion accords with that reached by the Bundesfinanzhof in the two cases I have mentioned, where indeed the Bundesfinanzhof followed an earlier decision of its own on the same point. My Lords, the questions referred to this Court by the Hessisches Finanzgericht in Case 124/73 are worded as follows ‘1. Is Article 14 (1) (A) (b) of Regulation No 19 of the Council of the European Economic Community of 4 April 1962 on the gradual establishment of a common organization of the markets for cereals (Official Journal of the European Communities, page 933), in conjunction with Article 7 (2) of Regulation No 55 of the Council of the European Economic Community of 30 June 1962 on the system for processed products based on cereals (Official Journal of the European Communities, page 1583), to be interpreted in such a way that, from the levy for denatured tapioca flour within heading No 11.06 of the Common Customs Tariff, the amount of the turnover equalization tax levied on imports of denatured tapioca flour and the costs of adding colouring material are to be deducted? If so: 2. Under what provisions, in what form and in what amount would the turnover equalization tax taken into account in determining the threshold price for barley then have to be brought into the calculation, when the levy for denatured tapioca flour, under Article 7 (2) of Regulation No 55, has been calculated on the basis of the threshold price for barley?’ My Lords, on the view I take, the question numbered 2 does not arise, but I have thought it right to read it because it exposes one of the difficulties to which acceptance of the plaintiff's argument on question 1 would lead. For the reasons I have expressed I am of the opinion that question 1 should be answered as follows: ‘Neither Article 14 of Regulation No 19 of the Council of the European Economic Community of 4 April 1962 nor Article 7 of Regulation No 55 of the same Council of 30 June 1962 is to be interpreted as meaning that any deduction is to be made from the levy on denatured tapioca flour either in respect of any such tax as the German turnover equalization tax or in respect of the costs of adding colouring material to such flour.’ In Case 125/73 the question referred to the Court by the Finanzgericht Hamburg is worded thus: ‘Must Article 14 of Regulation No 19/62 and Article 7 of Regulation No 55/62, which are material for the calculation of the amounts of the levy for processed products (Article 1 (d) in conjunction with the Annex to Regulation No 19/62), be interpreted, having regard to the judgment of the European Court in Case 76/70 of 12 May 1971, whereby in the calculation of the threshold price for cereals under Article 4 of Regulation No 19/62 a fixed sum corresponding to the effect of the internal taxes levied on imports — such as turnover equalization tax — is to be deducted from the target price, as meaning that the amount of turnover equalization tax charged in the particular case must be deducted from the levy?’ I am of the opinion that that question should be answered as follows: ‘Neither Article 14 of Regulation No 19/62 nor Article 7 of Regulation No 55/62 is to be interpreted as meaning that any deduction is to be made from the levy on denatured tapioca flour in respect of any such tax as the German turnover equalization tax.’ I turn to the last case, Case 126/73, where, your Lordships remember, the essential question is whether, on the proper interpretation of Regulation No 22 of the Council, the levy on importations of slaughtered poultry into the Federal Republic should have been reduced by an amount corresponding to that of the turnover equalization tax. Regulation No 22 did not provide for the fixing of target prices or of threshold prices for slaughtered poultry. By Article 3 (1) it provided that, in the case of imports from one Member State into another, the levy should consist of two components. The first was designed to reflect the incidence on feeding costs of the difference between the prices of feed grains ruling in the importing State and those ruling in the exporting State. The precise method of fixing the amount of this component was prescribed by Article 3 (4). As one would expect it did not involve any computation of the kind with which Case 76/70 was concerned. The second component was to be equal to the mean of the customs duties levied by the importing State on imports from the other Member States in 1961. By way of proviso, Article 3 (2) allowed an alternative method of computing the levy in the case of a Member State which, at the time of the entry into force of Regulation No 22, protected its own production of poultry meat by means of quantitative restrictions or of measures having an effect equivalent thereto. This alternative method involved a comparison between the mean prices for slaughtered poultry ruling in the importing State and those ruling in the exporting State in the years 1960 and 1961. Putting it shortly (and I hope without excessive sacrifice of accuracy) the amount of the levy was to be the amount of the difference evinced by that comparison ‘modifié afin de tenir compte des frais de transports et des impositions intérieures que supportent les produits en cause’. So here was a provision requiring a computation, not identical with that with which Case 76/70 was concerned, but similar to it. For completeness, I ought, I think, to say that, by virtue of Article 9 of Regulation No 22, the levies on trade between Member States were to be progressively reduced over the years. The method of calculating the levies on imports of slaughtered poultry from third countries was laid down by Article 4 of Regulation No 22. For each Member State the levy was to consist of three components. The first was to reflect the incidence on feeding costs of the difference between prices for feed grains ruling in the importing State and those ruling on world markets. Here again a precise method of calculating this component was laid down, and here again it did not involve any computation of the kind with which Case 76/70 was concerned. The second component was to be the same as the second component fixed under Article 3 (1), except in the case of a Member State to which Article 3 (2) applied. In such a case the second component was to be calculated by reference to the provisions of Article 3 (2). I need not, I think, burden Your Lordships with a detailed analysis of how this calculation was to be made. The significant point is that it rendered relevant for the purposes of Article 4 of Regulation No 22 the computation made under Article 3 (2) which took account of transport costs and of internal taxes. The third component was to be a percentage of, generally speaking, the appropriate ‘sluice-gate price’ fixed under Article 6 of Regulation No 22, to which I shall come. By Article 5 of Regulation No 22 the Commission was empowered, at the request of a Member State, to authorize it to charge, subject to certain conditions, lower levies than those prescribed by Articles 3 and 4. Reliance is placed on this Article by the Plaintiff in Case 126/73. My Lords, I do not find it possible to summarize the relevant provisions of Article 6. They were as follows: ‘1. Afin d'éviter des perturbations dues à des offres en provenance des pays tiers faites à des prix anormaux, le Conseil, statuant sur proposition de la Commission… fixe pour la volaille abattue, différenciée par espèce, un prix d'écluse uniforme pour la Communauté, en tenant compte des prix de céréales fourragères sur le marché mondial et d'un coefficient de transformation représentatif pour les pays tiers exportateurs.’ … ‘3. Dans le cas où les prix d'offre franco frontière à l'importation tombent au-dessous du prix d'écluse, le montant des prélèvements déterminés conformément aux dispositions de l'article 4 et diminués le cas échéant conformément aux dispositions de l'article 5 est augmente, dans chaque État membre, d'un montant égal à la différence entre le prix d'offre franco frontière et le prix d'écluse.’ That is the origin of the additional levies mentioned in the questions referred to the Court by the Finanzgericht Hamburg. Those questions are in the following terms: ‘1. Are Articles 4 and 6 of Regulation No 22/62 of the Council to be so interpreted that the standard levy or the additional levy imposed on imports of slaughtered poultry or of poultry meat from third countries is to be reduced by a fixed amount equivalent to the turnover equalization tax levied on such imports? 2. If the answer to question 1 is in the affirmative, are Regulations Nos 91/65 of the Commission of 29 June 1965 and 124/65 of the Commission of 22 September 1965 invalid insofar as they fix levies or additional levies for poultry within tariff heading No 02.02?’ I should, I think, explain, with regard to the second question, that tariff heading No 02.02 was that which comprised slaughtered poultry. Regulations No 91/65 and 124/65 of the Commission were implementing regulations adopted in pursuance of, inter alia, Articles 4 and 6 of Regulation No 22. I enter into no more detail about them because if, as I think, the first question posed by the Finanzgericht Hamburg is to be answered in the negative, the second question posed by that Court does not arise. The argument put forward on behalf of the Plaintiff in Case 126/73, though elaborated at great length and with much learning, is, as I understand it, basically the same as that put forward on behalf of the Plaintiffs in Cases 119, 124 and 125/73 in relation to durum wheat and to denatured tapioca flour. It is however carried further. Not only is it said that the decision of the Court in Case 76/70 established a general principle not confined to cases where Article 4 of Regulation No 19 applied. It is said that Regulation No 19 was itself the ‘spearhead’ of the series of Regulations to which I referred at the outset and that it must be taken as having implicitly stamped with that principle all the Regulations in that series, including Regulation No 22. Were it otherwise, so the argument runs, all these Regulations would be in breach of Article 39 and of Article 12 of the EEC Treaty. The conclusion drawn by the Plaintiff is that the Federal Republic ought to have applied to the Commission for authority under Article 5 of Regulation No 22 to reduce its levies by the amount of its turnover equalization tax. My Lords, that argument was, in my opinion, rightly described by Counsel for the Commission as imaginative but as failing to keep its feet on the ground. I have no doubt that it ought to be rejected. It proceeds, to my mind, from a false premise (as to the scope of the decision of this Court in Case 76/70) through a succession of non-sequiturs (for instance as to the effect of Article 39) to a conclusion that is inconsistent with the plain meaning of Regulation No 22 — a regulation that laid down with particularity how the levies on poultry-meat should be fixed and which envisaged a computation taking into account internal taxes only in the cases to which Article 3 (2) applied either directly or referentially. I am therefore of the opinion that the first question asked by the Finanzgericht Hamburg in Case 126/73 should be answered as follows: ‘Neither Article 4 nor Article 6 of Regulation No 22/62 of the Council is to be interpreted as meaning that any deduction is to be made from the levies on slaughtered poultry or on poultry meat in respect of any such tax as the German turnover equalization tax.’ As I have already said, on that view the second question posed by that Court does not arise.

Mr Justice Pumfrey Introduction The appellants, to whom I shall refer as 'the Deakins', appeal with the permission of HHJ Weeks QC sitting as a judge of the Chancery Division against his judgment delivered on 17 October 2001, setting aside the sale by the third Respondent ('the Halifax') as mortgagee in possession of Yew Tree Farm, Sand, Wedmore, Somerset to them. The claimants, to whom I shall refer as 'the Corbetts', allege that the sale was fraudulent or at an undervalue. The learned judge ordered the Register to be rectified to reflect his order, and made an order for possession of Yew Tree Farm in favour of the Halifax and for immediate sale. Although the judge's finding that the sale to the Corbetts was at an undervalue was challenged in the grounds of appeal and in the appellants' skeleton argument, Mr Jefferies, recognising the difficulties confronting him in pursuing a challenge to the judge's finding of fact, did not pursue the point with any enthusiasm, and it is now accepted that the judge's finding that the sale took place at an undervalue must stand. With that introduction, I turn to the facts of the case. The judge sets out the events fully and with great care, and I will only set out so much of the facts here as make this judgment comprehensible. The Corbetts purchased Yew Tree Farm in 1983. It then consisted of a site of about 1.5 acres fronting a quiet country lane, with (1) a 250-year-old farmhouse abutting the lane (2) a barn and outbuildings behind the farmhouse, later converted by the Corbetts to a house called Little Sneyd; and (3) a paddock of about 1 acre, which the Corbetts still own. Yew Tree Farm, Little Sneyd and an adjoining property share access over a single shared drive from the lane. Until 1992, the Corbetts lived in Yew Tree Farm and ran a bed and breakfast business. Mr Corbett also ran a printing business from a caravan parked on the property. In 1987, the greater part of the property excluding the outbuildings was mortgaged to Western Trust and Savings Limited to secure a loan of £75,125, which was used to finance the conversion of Little Sneyd. Mr and Mrs Corbett appear to have run into difficulties almost immediately, since in February 1989 they put the whole property, except the paddock and another strip providing access to the paddock from the lane on the market. They found no takers, and ultimately they raised the funds to discharge the loan by remortgaging the farmhouse and a small garden to the Halifax. The loan proposal was countersigned by Mr Deakin, then an employee of the Halifax at its branch in Weston-super-Mare and the transaction was completed on 23 March 1990. The loan secured was £160,000, of which £82,163 went to redeem the existing mortgage. The interest rate was 13.5% per annum over the first two years, and the monthly repayment rate was £1,995. The rest of the money was used for Little Sneyd, and a further advance of £25,000 on the same security was obtained on 20 August 1990, raising the total indebtedness to £185,000 less the capital element of the repayments which the Corbetts made from March 1990. The repayment rate was then set at £2,286 per month, which the Corbetts knew they could not meet out of income. In January 1991 they borrowed a further £18,000 from Consumer Loans Co, and executed a further mortgage over 'Yew Tree Farm, Sand, Wedmore' on 13 February 1991 in favour of Consumer Loans Co. They applied £4,564 of the loan obtained from Consumer Loans in paying the December 1990 and January 1991 instalments of the principal loan, and then defaulted. By the following January the total indebtedness was £210,025.13. The Halifax's Mortgage Conditions then current were the 1988 edition, and the express power of sale is contained clauses 12 and 13: '12. The Redemption Money shall become immediately payable to the Society (a) if there is a default in the payment of any two Monthly Payments or for two months in the payment of any moneys payable under the Mortgage these Conditions or the Rules… 13. At any time after the Redemption Money has become immediately payable the Society may without any previous notice to or concurrence on the part of the Borrower: (a) take possession of the Property (b) exercise all the powers conferred on mortgagees by the Law of Property Act 1925 with all the incidences of such powers but so that the power of sale may be exercised whether the Society shall be in possession or not and without the restrictions imposed by Section 103 of that Act (c) … 18. The Society's powers contained in the Mortgage or these Conditions are in addition and without prejudice to and not in substitution for all other powers and remedies of the Society under the Rules or by statute.' By 6 September 1991 it was clear to the Corbetts that possession proceedings were imminent, and their solicitor secured the agreement of the Halifax to postpone action for six months to enable the Corbetts to try to sell the property themselves. They failed to obtain a sale and ultimately the order for possession was made in the Weston-super-Mare County Court on 23 June 1992, possession to be given by 21 July. Their agents, Borough Mall, had by then reduced the asking price to £195,000. The Halifax did not take steps to execute the order until late in the year, by which time a single tentative offer of £150,000 had been obtained. The warrant for possession was obtained and was enforceable on 19 January 1993. Possession was obtained on 19 January 1993, and the Halifax formally instructed another firm of agents, Michael Gillett, as selling agents, having informally approached them some days earlier. The Halifax's standard terms of engagement including a provision that 'under no circumstances may staff of the Halifax group of companies or agent's staff or their families purchase a property in possession'. Two valuations of the property were obtained at this stage. The first, from Mr Dunscombe, a partner in Michael Gillett, was for a value after necessary repairs of £133,000 and an asking price in present condition of £137,000. The second, from Mr Hawthorne (an in-house valuer employed by the Halifax) valued the property at £142,000 with an asking price of £149,950. The Halifax's South East Property Unit (referred to as 'SEPU') considered the valuations and decided that the asking price should be £145,000 and the minimum price £135,000. On the 9 February 1993 the Halifax gave instructions to Michael Gillett to start marketing the property. Particulars were prepared by Mrs Balson, the Wedmore manager of Michael Gillett. The amount outstanding was now about £236,000. During this period, the Corbetts decided to put Little Sneyd, which appears to have been unencumbered apart from the mortgage to Consumer Loans Co, on the market with a view to paying off the Halifax loan with the proceeds and retaining Yew Tree Farm. They found a potential purchaser, but the matter proceeded slowly because of uncertainty over the boundaries of Little Sneyd and the extent of the Halifax's charge. The Deakins had been on Michael Gillett's books since 1992. I take the account of what then happened from the judgment: 'Michael Gillett had kept a file on Mr Deakin with his address and telephone number in Wedmore and a work number, which was stated on the file to be a Halifax number. He had viewed several properties and made an offer on one called The Coach House, which did not proceed, in the previous year. On 2 February 1992 he was recorded as still looking, and on 8 February he went to view a house in Theale. His limit was recorded as £160,000 on the file. On 11 February 1992 Mrs Balson took Mr Deakin and his wife and mother to see Yew Tree Farm. Mr Deakin has given different versions of the subsequent events on different occasions and I am not able to accept his evidence except where independently verified. Where it conflicts with that of Mrs Balson or Mr Gillett I prefer the latter. There is, however, no particular reason why Mr Deakin should have remembered Mr and Mrs Corbett's mortgage application in 1990 or been aware at this stage that the property was a Halifax repossession. It was immediately apparent to Mrs Balson that the Deakins liked the property very much. She says they 'fell in love with it', although that is not the phrase they say they would have used. Mr Deakin said he made an immediate offer for £140,000 in writing. Mrs Balson cannot recall seeing such an offer and no copy of the document has been produced. She agrees, however, that the Deakins offered £140,000 straight away. She did not realise that Mr Deakin worked for the Halifax. … I find that Stephanie Balson told Michael Gillett that Mr Deakin had offered £140,000 for Yew Tree Farm. Mr Gillett was on nodding terms with Mr Deakin and knew that he worked for the Halifax. He told Stephanie Balson that Mr Deakin, as a Halifax employee, should not be purchasing a property repossessed by the Halifax. They agreed that one of them should speak to him. Either Mr Gillett or Mrs Balson did so, and Mr Deakin withdrew his offer. He was, however, quite determined to buy the property and over the weekend he devised a plan to buy it in his uncle's name. His uncle, Mr Marples, lived in Sheffield … …on 15 February 1993, Mr Deakin, or someone at his instigation, rang Stephanie Balson and made an offer for the property. Her note of 15 February says that "Mr A Marples offered £140,000", and gives his address and phone number in Sheffield. Mrs Balson was not stupid and knew that Mr Marples had not seen the property. She suspected, or realised, that Mr Deakin was using Mr Marples's name to circumvent the Halifax Rules.' The judge found that the matter was raised with Mr Deakin again by Michael Gillett, who was told by Mr Deakin that the latter had his line manager's approval for the purchase. There were further complications in the sale of Little Sneyd, which did not have the benefit of any easement permitting access over the land which appeared to form part of the Halifax's security and whose boundary was in any case uncertain. The SEPU (which is located in Southampton) recommended a sale to Mr Deakin at the offer price having regard to the uncertainty in boundaries, and at the same time appears to have taken steps to make the sale of Little Sneyd difficult, so that the problems of boundaries and access could be overcome while it remained the Corbetts' property. A rival purchaser for Yew Tree Farm, Mr Shell, had also appeared on the scene, who consistently offered £145,000 but whose offer was never accepted, largely it would seem in consequence of Mrs Balson's failure to recommend it. The Halifax had a rule that an offer had to be 5% better to displace an existing firm offer, and the Shells were never told that if they wished their offer to be considered it would have to be £147,000 or above. By 20 July 1993, when contracts were exchanged in respect of Yew Tree Farm, the Shells had walked away because their offer of £145,000 had not been accepted. The intending purchaser of Little Sneyd had also abandoned the transaction, and the question of boundaries had finally been resolved. The price was £140,000 and the purchaser was Mr Marples. In a back-to-back transaction, that took place on the same day, Mr Marples sold to Mr Deakin. Mr Deakin paid two lots of stamp duty on the transaction. On 12 November 1993, the Deakins were registered as first proprietors of Yew Tree Farm subject to a first charge in favour of the Abbey National under title number ST103445. The Deakins did not go into occupation immediately, preferring to stay at their old home in Wedmore until certain works were done. The Corbetts stayed in Little Sneyd. Mrs Corbett got hold of a MIRAS form sent to Mr Deakin at Yew Tree Farm, and showed it to her mortgage broker, who complained to the Halifax. The allegation, as advanced by the Corbetts' adviser, a licensed conveyancer called Mr Stait, was as follows, as reported by the Halifax: '…we have sold the …property as mortgagee at an under-value to an employee of the Society. There is also an allegation that the Society frustrated the sale of an adjoining property (not in the mortgage) thereby preventing the borrowers from clearing off the arrears and avoiding a sale of our mortgaged property. Mr Stait says that the property was sold to a Mr Alan John Deakin who works at one of our Bristol offices. He has in his possession a copy of an Abbey National completion letter addressed to the property and a copy of Mr Deakin's MIRAS form. He also says that local workmen confirmed that they were carrying out work at the property for Mr Deakin. Mr Stait does not have a copy of the statutory post-mortgagee in possession notice which we will have served on the borrowers. We have been in correspondence with Dibb Lupton, who acted in the sale, who say that the buyer was Mr Alan Marples. The property was sold by some local agents, Gilletts of Wedmore, who he knows refused a higher offer for the property after the sale by the Society at £140,000 had been agreed. The sale was completed, apparently on 10 August.' Thus the battle lines between the Deakins and the Corbetts, now close neighbours, were drawn. After an investigation, Mr Deakin was punished by the Halifax for his actions, but was not dismissed. The Halifax took no steps to set the sale to him aside. In 1993 and 1994 the Deakins carried out certain works on Yew Tree Farm. They were unsuccessful in selling their old house in Wedmore, and contemplated selling Yew Tree Farm. On 13 October 1994 a letter before action was sent to the Halifax by the Corbetts' then solicitors. The Halifax's response was found by the judge not to be frank, but it seems to me that this is immaterial. A Writ was eventually issued on 29 May 1996, followed by a Statement of Claim on 13 March 1997. The Defence was served by the Deakins and a Defence and Counterclaim served by the Halifax in November. Neither the Corbetts nor the Deakins have sold their respective properties, with the consequence that over the whole period of this dispute they have remained neighbours. The judgment below Before the judge, the Corbetts did not pursue their claim against the Halifax in respect of Little Sneyd (the sale of which was alleged to have been impeded by the Halifax) and advanced their claim against the Deakins and the Halifax on two bases, fraud and sale at an undervalue. The material findings of the learned judge may be summarised as follows: i) Mr Deakin, an employee of the Halifax, deceived the Halifax into selling to him, by interposing Mr Marples, as a nominee purchaser. If the Halifax had known of Mr Deakin's involvement, it would not have sold to him. ii) Mr Deakin was not employed by the Halifax in any manner connected with the sale, and thus the sale could not be set aside on the basis of Farrar v Farrars Ltd (1888) 40 Ch D 395. iii) The decision to accept the offer made by Mr Deakin acting through Mr Marples was made by the employees of the Halifax in total ignorance of Mr Deakin's involvement. iv) The Halifax's local agents (Michael Gillett and Stephanie Balson) were aware that Deakin was involved and that he would not be entitled to purchase according to the Halifax's own rules but they accepted his story that he had cleared the purchase with his management. They acted without dishonesty or improper motive. v) The best price reasonably attainable for Yew Tree Farm was its open market value, which was £160,000 at the relevant time. vi) If the Halifax had sold to the disappointed would-be purchasers (the Shells) for £145,000 there would have been no undervalue since the margin on the valuation was ±10%. vii) The Deakins were not purchasers 'in good faith' within the meaning of the definition of 'purchaser' in s 205(1)(xxi) of the Law of Property Act 1925, and could not, therefore, take the benefit of section 104 LPA. The judge rejected a submission that he was bound by the decision of the Court of Appeal in Property & Bloodstock Limited v Emerton [1968] 1 Ch 94 to hold that damages was the only remedy for a mortgagor in the Corbetts' position, but that 'the remedies should be adjusted to fit the circumstances of the case'. He therefore set aside the sale to the Deakins. His reasoning was as follows. 'In the present case, the mortgagee sold at an under-value in breach of its duty. It does not, I think, make any difference whether the duty was statutory or equitable. The under-value was small, but the size of the under-value is significant only as an indicator of the presence or absence of bad faith on the part of the vendor. There was therefore a breach, on any view, and the power was wrongly exercised.' Having quoted a passage from the then current edition of Emmett on Title (a passage which no longer appears) the judge assimilated the rights of a purchaser from a mortgagee in possession selling pursuant to his statutory power under section 101 LPA 1925 to that of a mortgagee in possession selling pursuant to an express power contained in the mortgage: 'In principle, a purchaser from any vendor who wrongly exercises a power of sale will get a good title if he is a bona fide purchaser for value without notice of the breach. The sale to Mr Marples was made under an extension of the statutory power. Whether or not that qualifies as an exercise of an express or a statutory power, the rights of Mr Marples and Mr Deakin cannot, I think, be any greater than those conferred by section 104 of the Law of Property Act 1925…' The judge referred to the protection conferred on purchasers by section 104, and turned to the statutory definition of 'purchaser' contained in section 205(1)(xxi) of the 1925 Act. Having considered the well-known observations of Lord Wilberforce in Midland Bank v Green [1981] AC 513 on the meaning of the words 'bona fide' or 'good faith' in this context, he continued: 'Mr Deakin was a purchaser for valuable consideration. In my judgment, he was not a purchaser in good faith. He acquired title by deceiving the vendor into believing that another person was the true purchaser and he knew the vendor would not have sold to him if he had disclosed the true facts. It is true that the Corbetts will gain more from setting aside than they have lost by the undervalue. But this arises from the increase in house prices since 1990. As between the Deakins and the Corbetts, I think it is fair that this increase should accrue to those who bought the house legitimately in 1983 rather than those who bought it dishonestly in 1993. In those circumstances, in my view, the justice of the case requires that the sale be set aside on terms.' The principal question which arises on this appeal is thus whether the sale to the Deakins was liable to be set aside, not because the Deakins or the Halifax knew or should have known of the undervalue, but because the Deakins had deceived the Halifax in selling to them rather than to somebody else. I shall consider the judge's reasons summarised above in more detail in considering this question. The powers and duties of the mortgagee It is convenient to start with the statutory power of sale and the provisions contained in section 104 for the protection of the purchaser, as the express powers of sale in this case are drafted by reference to them. By section 101 of the Law of Property Act 1925 '101 Powers incident to estate or interest of mortgage (1) A mortgagee, where the mortgage is made by deed, shall, by virtue of this Act, have the following powers, to the like extent as if they had been in terms conferred by the mortgage deed, but not further (namely):— (i) A power, when the mortgage money has become due, to sell, or to concur with any other person in selling, the mortgaged property, or any part thereof, either subject to prior charges or not, and either together or in lots, by public auction or by private contract, subject to such conditions respecting title, or evidence of title, or other matter, as the mortgagee thinks fit, with power to vary any contract for sale, and to buy in at an auction, or to rescind any contract for sale, and to re-sell, without being answerable for any loss occasioned thereby; …' Section 104 provides protection for a purchaser from a mortgagee: '(1) A mortgagee exercising the power of sale conferred by this Act shall have power, by deed, to convey the property sold, for such estate and interest therein as he is by this Act authorised to sell or convey or may be the subject of the mortgage, freed from all estates, interest, and rights to which the mortgage has priority, but subject to all estates, interests, and rights which have priority to the mortgage. (2) Where a conveyance is made in exercise of the power of sale conferred by this Act, or any enactment replaced by this Act, the title of the purchaser shall not be impeachable on the ground— (a) that no case had arisen to authorise the sale; or (b) that due notice was not given; or (c) where the mortgage is made after the commencement of this Act, that leave of the court, when so required, was not obtained; or (d) whether the mortgage was made before or after such commencement, that the power was otherwise improperly or irregularly exercised; and a purchaser is not, either before or on conveyance, concerned to see or inquire whether a case has arisen to authorise the sale, or due notice has been given, or the power is otherwise properly and regularly exercised; but any person damnified by an unauthorised, or improper, or irregular exercise of the power shall have his remedy in damages against the person exercising the power. (3) A conveyance on sale by a mortgagee, made after the commencement of this Act, shall be deemed to have been made in exercise of the power of sale conferred by this Act unless a contrary intention appears. ' The mortgagee is not a trustee of his power of sale (Kennedy v. De Trafford [1897] AC 180, H.L.).. The purpose of the power of sale is to enable the mortgagee to realise his security in the event of a default by the borrower. The scope of the power was described (as the judge rightly said) by Robert Walker LJ in Yorkshire Bank v Hall [1999] 1 WLR 1713 at page 1728: '…the bank relied on principles stated by the Privy Council in the well known cases of China and South Sea Bank Ltd. v. Tan Soon Gin (alias George Tan) [1990] 1 AC 536 and Downsview Nominees Ltd. v. First City Corporation Ltd. [1993] AC 295 and by the House of Lords in National Bank of Greece S.A. v. Pinios Shipping Co. No. 1 [1990] 1 A.C. 637. Those cases together establish or reaffirm that a mortgagee's duty to the mortgagor or to a surety depend partly on the express terms on which the transaction was agreed and partly on duties (some general and some particular) which equity imposes for the protection of the mortgagor and the surety. The mortgagee's duty is not a duty imposed under the tort of negligence, nor are contractual duties to be implied. The general duty (owed both to subsequent encumbrancers and to the mortgagor) is for the mortgagee to use his powers only for proper purposes, and to act in good faith: see the Downsview case, at p. 317. The specific duties arise if the mortgagee exercises his express or statutory powers: see the Downsview case, at p. 315. If he exercises his power to take possession, he becomes liable to account on a strict basis (which is why mortgagees and debenture holders operate by appointing receivers whenever they can). If he exercises his power of sale, he must take reasonable care to obtain a proper price.' At the time the sale to Mr Marples and to the Deakins took place, an express duty was placed on building societies by the Building Societies Act 1986 by virtue of section 13(7) and the Fourth Schedule: '1.—(1) Where any land has been mortgaged to a building society as security for an advance and a person sells the land in the exercise of a power (whether statutory or express) exercisable by virtue of the mortgage, it shall be his duty— (a) in exercising that power, to take reasonable care to ensure that the price at which the land is sold is the best price that can reasonably be obtained…' This provision has now been repealed but it is not suggested that the scope of the duty has changed. Between contract and completion, the position is described in Waring v London & Manchester Assurance Co [1935] Ch 310, where in a passage subsequently approved by the Court of Appeal in Property & Bloodstock Limited v Emerson [1968] 1 Ch 94, Crossman J said this: 'The only effect of the conveyance is to put the legal estate entirely in the purchaser: that follows from s. 104, sub-s. 1, of the Law of Property Act, 1925, which provides that a mortgagee shall have power to convey the legal estate; and the whole legal estate can be conveyed free from all estates, interests, and rights to which the mortgage has priority. Sect. 104, sub-s. 2, upon which also counsel for the plaintiff relied, does not seem to me to affect the question at all. Its purpose is simply to protect the purchaser and to make it unnecessary for him, pending completion and during investigation of title, to ascertain whether the power of sale has become exercisable. Of course, if the purchaser becomes aware, during that period, of any facts showing that the power of sale is not exercisable, or that there is some impropriety in the sale, then, in my judgment, he gets no good title on taking the conveyance. The result in the present case is, in my judgment, that the sale effected by the contract, assuming, for the moment, that there is no objection to it on any other ground, binds the plaintiff, and that it is too late after the sale for him to tender the mortgage money and become entitled to have the property reconveyed to him. A second point taken by counsel for the plaintiff is that the sale, considered as a pending sale, cannot be allowed to stand because it was made at a gross under-value, an under-value which would entitle the plaintiff, as mortgagor, to have it set aside. I do not want to go through all the evidence again. After having gone through the evidence of the four years between the date of the mortgage and the date of the contract, I can find no evidence showing anything like lack of good faith in the company's conduct with regard to the sale. The law, as stated by Kay J. in Warner v. Jacob 20 Ch D 220, is perfectly clear. The learned judge there says: ".... a mortgagee is strictly speaking not a trustee of the power of sale. It is a power given to him for his own benefit, to enable him the better to realize his debt. If he exercises it bona fide for that purpose, without corruption or collusion with the purchaser, the Court will not interfere even though the sale be very disadvantageous, unless indeed the price is so low as in itself to be evidence of fraud."' It would seem to follow from this that a completed sale by a mortgagee is not liable to be set aside merely because it takes place at an undervalue. Impropriety is a prerequisite, and section 104(2) makes it clear that the purchaser is not protected if he has actual knowledge of the impropriety. But if the purchaser has no notice of the impropriety, then on the face of it he takes free. Thus, the completed sale by a mortgagee pursuant to his statutory power is vulnerable only if the purchaser has knowledge of, or participates in, an impropriety in the exercise of the power. In Property & Bloodstock v Emerson (above) Danckwerts LJ summarised the position as follows: 'The actual decision of Crossman J. in Waring's case was: (1) that a mortgagee's exercise of his power under section 101(1)(i) of the Act of 1925 to sell the mortgaged property by public auction or private contract is binding on the mortgagor before completion unless it is proved that he exercised it in bad faith; and (2) that the fact that a contract for sale was entered into at an undervalue is not by itself enough to prove bad faith.' Moving on to the position of Mr Deakin himself, one starts with the proposition that a sale by the mortgagee to his employee is not necessarily improper, but the burden is on the mortgagee to satisfy the court of the propriety of the transaction. In Farrar v Farrars Limited (1888) 40 Ch D 395, Lindley LJ said, in a passage quoted by the judge, that 'The other ground relied upon was of a much more serious character. It was alleged by the Plaintiffs in their statement of claim that the sale was fraudulent and collusive and at an undervalue. Mr. Justice Chitty decided that this allegation was not proved, and he gave judgment for the Defendants. The Plaintiffs on appeal did not question the view of the Judge that there was no fraudulent sale at an undervalue, but they contended that fraud or no fraud, undervalue or no undervalue, the sale could not stand, inasmuch as it was in substance a sale by a mortgagee to himself and others under the guise of a sale to a limited company. If this proposition were true the sale could not stand as against the mortgagor. It is perfectly well settled that a mortgagee with a power of sale cannot sell to himself either alone or with others, nor to a trustee for himself:…; nor to any one employed by him to conduct the sale: …. A sale by a person to himself is no sale at all, and a power of sale does not authorize the donee of the power to take the property subject to it at a price fixed by himself, even although such price be the full value of the property. Such a transaction is not an exercise of the power, and the interposition of a trustee, although it gets over the difficulty so far as form is concerned, does not affect the substance of the transaction. A sale by a person to a corporation of which he is a member is not, either in form or in substance, a sale by a person to himself. To hold that it is, would be to ignore the principle which lies at the root of the legal idea of a corporate body, and that idea is that the corporate body is distinct from the persons composing it. A sale by a member of a corporation to the corporation itself is in every sense a sale valid in equity as well as at law. There is no authority for saying that such a sale is not warranted by an ordinary power of sale, and in our opinion, such a sale is warranted by such a power, and does not fall within the rule to which we have at present referred. But although this is true, it is obvious that a sale by a person to an incorporated company of which he is a member may be invalid upon various grounds, although it may not be reached by the rule which prevents a man from selling to himself or to a trustee for himself. Such a sale may, for example, be fraudulent and at an undervalue or it may be made under circumstances which throw upon the purchasing company the burden of proving the validity of the transaction, and the company may be unable to prove it. Fraud in the present case is not now alleged; it was alleged in the Court below, and was then clearly disproved. But, for reasons which will appear presently, the circumstances attending the sale were such as, in our opinion, throw upon the company the burden of sustaining the transaction. The circumstances alluded to are shortly as follows:- Mr. John Riley Farrar was a solicitor, he was one of three mortgagees with a power of sale, he acted for his mortgagees. He sold to a company, more or less promoted by himself, in which he had a substantial interest as a shareholder, and whose solicitor he was. Such a transaction has a suspicious appearance, and at the time of the sale there was apparently such a conflict of interest and duty on the part of Mr. Farrar, and such notice to the company of that conflict, as to throw upon the company the burden of upholding the sale. But the sale cannot be set aside on the simple ground that Mr. Farrar was a trustee for sale, and was a promoter of and shareholder in the company which purchased from him. It is necessary to see what his duties to his mortgagors were, and what he really did. A mortgagee with a power of sale, though often called a trustee, is in a very different position from a trustee for sale. A mortgagee is under obligations to the mortgagor, but he has rights of his own which he is entitled to exercise adversely to the mortgagor. A trustee for sale has no business to place himself in such a position as to give rise to a conflict of interest and duty. But every mortgage confers upon the mortgagee the right to realize his security and to find a purchaser if he can, and if in exercise of his power he acts bonâ fide and takes reasonable precautions to obtain a proper price, the mortgagor has no redress, even although more might have been obtained for the property if the sale had been postponed:…' Farrar was a case in which the sale was to a company in which the mortgagee had an interest. The rule is based upon the duty of all persons concerned with the sale to avoid the conflict of interest that will arise if they seek to purchase from the mortgagee. They must not place themselves in a position where their duties and interests conflict, but if there is in fact no such conflict the sale will not be set aside. In the present case, the Halifax discharged the onus of demonstrating that Mr Deakin was not in any way involved in the sale, save as purchaser, as the judge recognised. It having been established before the judge (1) that the sale was at an undervalue and that (2) the sale was to an employee, Mr Deakin, but that (3) Mr Deakin was not involved in the sale and was unaware of that undervalue, the question is whether the sale should be set aside. The judge recognised that on the face of it damages were the proper remedy, but he relied on two matters in particular for rejecting that conclusion. The first is the deception worked by Mr Deakin on his employers. Mr Deakin acquired Yew Tree Farm not merely in breach of the terms of his contract of employment, but having deceived the Halifax. This goes to the propriety of the exercise of the power of sale. The second is that the judge concluded that in consequence of his deception, Mr Deakin could not take advantage of section 104(2). In my judgment, Mr Deakin's deception of his employers does not confer upon the mortgagors, the Corbetts, any right to set the sale aside which they would not have possessed against any other purchaser at an undervalue who did not know of the undervalue and who was not involved in the exercise of the power of sale by the Halifax. No doubt it rendered the sale voidable at the instance of the Halifax, but that is not relevant to the position of the Corbetts. The judge did not accept that the position of a completed sale is really a fortiori the position between contract and completion, which is described by Crossman J and Danckwerts LJ in the passages I have quoted above. The judge said this of Danckwerts LJ's remarks: 'It is, I think, important not to read too much into that statement of the law. If it is read as meaning that the mortgagee's only obligation is one of good faith then it is plainly inconsistent with later authorities. It must, I think, be limited to the circumstances governing the grant of an injunction between contract and completion and not to the rights and remedies available after completion.' I do not think that this is a sustainable basis upon which to distinguish these cases. It is absolutely correct that the mortgagee's duty is not limited to a duty of good faith, as the decision of the Court of Appeal in Cuckmere Brick v Mutual Finance Ltd [1971] Ch 949 makes clear, but it does not follow that the underlying rationale of the cases is affected. The rationale is that the sale must be tainted by some kind of impropriety, not merely an innocent undervalue. The second ground of distinction suggested by the judge is, I think, unsound. Of course, if the purchaser discovers the impropriety or other defect before completion, then he will take subject to the rights of the mortgagor. But it is not easy to see why the mortgagor's position should be stronger after completion of the sale than it was before. It is right that in Tse Kwong Lam v Wong Chit Sen [1983] 1 WLR 1349 Lord Templeman said that 'Where a mortgagee fails to satisfy the court that he took all reasonable steps to obtain the best price reasonably obtainable and that his company bought at the best price, the court will, as a general rule, set aside the sale and restore to the borrower the equity of redemption of which he has been unjustly deprived. But the borrower will be left to his remedy in damages against the mortgagee for the failure of the mortgagee to secure the best price if it will be inequitable as between the borrower and the purchaser for the sale to be set aside.' This statement is made in the context of a case of a sale to a company associated with the mortgagee: and it was held to be inequitable to set the sale aside having regard to the time which had elapsed. This case is analysed by Sir Richard Scott V-C in Medforth v Blake [2000] Ch 86 as exemplifying the nature of the duty placed by equity on the mortgagee to ensure that he deals fairly and equitably with the mortgagor and the others interested in the mortgaged property. Sir Richard Scott said this at page 102 of the report: 'These duties are not inflexible. What a mortgagee or a receiver must do to discharge them depends upon the particular facts of the particular case. A want of good faith or the exercise of powers for an improper motive will always suffice to establish a breach of duty. What else may suffice will depend upon the facts. Tse Kwong Lam v. Wong Chit Sen [1983] 1 WLR 1349 is a very good example. The fact that the mortgagee had an interest in the purchasing company placed the mortgagee under an obligation to show that a proper price had been obtained. This was an obligation more onerous than would otherwise have been required. It is true that Lord Herschell in Kennedy v. De Trafford [1897] AC 180 expressed the duty on the mortgagee in terms much less onerous than the terms in which Salmon L.J. expressed the duty in the Cuckmere Brick case. That does not make the two cases inconsistent with one another. The facts that constituted the mortgagors' complaints were different. And the duty in equity appropriate to have been owed by a mortgagee selling in 1888 is not necessarily of the same weight as the duty appropriate to have been owed by a mortgagee selling in 1967. Equity is at least as flexible as the common law in adjusting the duties owed so as to make them fit the requirements of the time.' The judge relied on the last section of this passage as justifying an adjustment of the remedies 'to fit the circumstances of the case'. In my judgment, equity will not intervene unless there is some element of impropriety or bad faith on the part of the mortgagee in the exercise of its power of sale. It is not simply a matter of shaping the remedy to fit the circumstances, but of setting aside a conveyance of the legal estate. It is my view that there never was any equity which could be asserted by the Corbetts to set aside the sale to the Deakins. Section 104(2) LPA 1925 is on this view irrelevant. It merely provides that between contract and completion the purchaser is not obliged to investigate the manner of the exercise of the power. The judge considered the question of the protection conferred on the Deakins by section 104(2). He quotes parts of the provision (cf the full version above): 'Where a conveyance is made in exercise of the statutory power the title of the purchaser shall not be impeachable on the ground that the power was improperly or irregularly exercised and any person damnified by an improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.' This quotation omits the words releasing the purchaser from any concern to make inquiries before or on conveyance and is inaccurate in other respects. But the judge found that Mr Deakin did not have actual knowledge of the fact that the sale was at an undervalue. It was not suggested before the judge, and he does not find, that Mr Deakin had constructive knowledge of the undervalue, whatever the scope of the phrase 'constructive knowledge' is. Nor did the judge find that Mr Deakin's lack of knowledge of the undervalue was not genuine and honest. This is unsurprising, since Mr Deakin's offer price differed only slightly from the internal Halifax valuations. Nevertheless the judge set the sale to Mr Marples and to the Deakins aside. The judge held that because Mr Deakin was not a purchaser in good faith from the Halifax he could not avail himself of section 104(2). He took the definition of 'purchaser' in section 205(1)(xxi) of the Act, and held that Mr Deakin did not satisfy the definition. Recognising that the dishonesty of Mr Deakin did not relate to any aspect of the exercise of the power of sale other than the identity of the purchaser, he took the view that Mr Deakin's dishonesty vis-à-vis the Halifax was relevant to the question of good faith for the purpose of the statutory definition. He based himself on the well-known passage in the speech of Lord Wilberforce in Midland Bank v Green [1981] AC 513 at page 529: 'My Lords, the character in the law known as the bona fide (good faith) purchaser for value without notice was the creation of equity. In order to affect a purchaser for value of a legal estate with some equity or equitable interest, equity fastened upon his conscience and the composite expression was used to epitomise the circumstances in which equity would or rather would not do so. I think that it would generally be true to say that the words "in good faith" related to the existence of notice. Equity, in other words, required not only absence of notice, but genuine and honest absence of notice. As the law developed, this requirement became crystallised in the doctrine of constructive notice which assumed a statutory form in the Conveyancing Act 1882, section 3. But, and so far I would be willing to accompany the respondents, it would be a mistake to suppose that the requirement of good faith extended only to the matter of notice, or that when notice came to be regulated by statute, the requirement of good faith became obsolete. Equity still retained its interest in and power over the purchaser's conscience. The classic judgment of James L.J. in Pilcher v. Rawlins (1872) L.R. 7 Ch.App. 259, 269 is clear authority that it did: good faith there is stated as a separate test which may have to be passed even though absence of notice is proved. And there are references in cases subsequent to 1882 which confirm the proposition that honesty or bona fides remained something which might be inquired into (see Berwick & Co. v. Price [1905] 1 Ch 632, 639; Taylor v. London and County Banking Co. [1901] 2 Ch 231, 256; Oliver v. Hinton [1899] 2 Ch 264, 273). But did this requirement, or test, pass into the property legislation of 1925?' There is no doubt that Lord Wilberforce contemplated that the investigation of the question of 'good faith' in its context in the definition of 'purchaser' in section 205(1)(xxi) of the LPA 1925 might involve an investigation of motive. In Midland Bank v Green there was no doubt that the purchaser had knowledge of the interest the defeating of which was the whole purpose of the transaction, and the passage in Lord Wilberforce's speech is intended to point up the difference between the definition of 'purchaser' in the Land Charges Act 1925 (where the crucial words do not appear) and that in the Law of Property Act. There are no cases where such an investigation has been carried out, and the natural meaning of the words certainly suggests that the principal matter affecting 'good faith' is notice, as it was in Pilcher v Rawlins (above) itself. But in any event, it seems to me that it is relevant to ask, good faith vis-à-vis whom? What makes this case unusual is that the lack of good faith has nothing to do with the Corbetts, but has only to do with the Halifax, whose internal rules were dishonestly broken by Mr Deakin. The lack of good faith is thus immaterial to the Corbett's interests, and did not affect those interests. I do not consider that Lord Wilberforce meant that a purchaser for value who has neither actual nor constructive notice of an impropriety connected with the exercise of the power of sale is nonetheless affected by that impropriety merely because of a lack of good faith that has no connection with the impropriety. Accordingly I consider that the learned judge was wrong to set the sale aside on the basis that the Deakins could not take the benefit of section 104(2) of the Law of Property Act 1925. If that is wrong, however, I consider that he was wrong in principle in the manner in which he exercised his discretion to set the sale to the Deakins aside. There is no doubt that there is such a discretion, as the passage I have quoted from Lord Templeman's opinion on behalf of the Board in Tse Kwon Lam's case (above) demonstrates. In that case, relief other than damages was refused on the grounds of delay. The judge said this: 'It is true that the Corbetts will gain more from setting aside than they have lost by the under value. But this arises from the increase in house values since 1990. As between the Deakins and the Corbetts, I think it is fair that this increase should accrue to those who bought the house legitimately in 1983 rather than those who bought it dishonestly in 1993. In those circumstances, in my view, the justice of the case requires that the sale be set aside on terms.' The judge then considered a matter relating to the Corbetts' own behaviour, raised by the Halifax, which he rejected and which was not advanced before this court. He continued 'I do not think that their conduct is really comparable to Mr Deakin's. Mrs Deakin was, I find, fully aware of what here husband was doing at the time. It has also been submitted that I should refuse equitable relief on the ground of delay. The Corbetts' solicitors have not pursued the action with great vigour, but I do not think that the delay has caused the Deakins to suppose that the claim was abandoned. It was not easy for the Corbetts to discover the truth of the transaction until Mr Marples provided them with a statement. In my judgment, notwithstanding the lapse of time, it is equitable as between the Corbetts and the Deakins to set the sale aside.' The Deakins' lender, the Abbey National, preserved its charge, which ranked before that of the Halifax, which was restored. The £20,000 advanced by the Deakins from their own funds was secured by a second charge, as were their capital payments to the Abbey National, and they were ordered to be paid any increase in the value of Yew Tree Farm attributable to works they had carried out, less any further advances received from the Abbey National. Judgment was given against the Corbetts for £204,415. Since the farm was worth some £320,000 at the date of judgment, the effect of the order is to enable the Corbetts to discharge a substantial part of their indebtedness to the Halifax on sale. Inquiries were ordered as to the capital repayments, the increase in value of the property attributable to the Deakins' works and any further advances by the Abbey National, with provision for disclosure, evidence of fact and expert evidence. In my view, the learned judge failed to take account of relevant factors. These are (1) the prejudice caused by the delay between sale and Writ, and the slowness in the prosecution of the claim (2) the fact that Yew Tree Farm was the Deakins' family home for the period of nine years (3) the fact that the Deakins had children who had not attained their majority (4) the disruption that the order for sale would cause them. His concentration on the dishonesty of Mr Deakin obscured the fact that the Halifax, who did have the right to avoid the sale, did not do so and the fact that Mr Deakin had been punished for the lies he told his employer. The delay was in my view far too great. Exchange of contracts with Mr Marples took place on 20 July 1993. The Deakins were registered as proprietors on 12 November 1994, and by 19 January 1994 the Corbetts knew that Yew Tree Farm had been purchased by an employee of the Halifax. Obviously they knew the price. The Halifax had disciplined Mr Deakin by the end of May 1994. The letter before action was sent on 13 October 1994, but the Writ is not issued until 29 May 1996, the statement of claim following on 13 March 1997. Where a market is rising, it seems to me that the claimant has a particular duty to press on with the action, so that the defendant is not prejudiced in the housing market more than necessary. In the result the benefit of the judge's order to the Corbetts was out of proportion to the actual undervalue or to the Deakins' loss. In my judgment, the judge should in any event have declined to set the sale aside but should have left the Corbetts to their remedy in damages. Finally, I should mention that Mr Jefferies for the Deakins addressed a separate argument to the effect that even had the judge been right in his order, he was still wrong to order the Register to be rectified, basing himself on Kingsalton Ltd v Thames Water Developments [2001] EWCA Civ 20 and London Borough of Hounslow v Hare 24 HLR 9 (Knox J). This argument raises difficult questions which do not need to be decided in this appeal, and I should prefer to consider them when it is necessary to do so. I consider that the appeal should be allowed to the extent that I have indicated. There will be judgment for the Corbetts for £20,000 and interest against the Halifax. I would invite submissions in writing as to the remainder of the order. Lord Justice Scott Baker: I agree that this appeal should be allowed for the reasons given by Pumfrey J. The Deakins were only able to purchase Yew Tree Farm because Mr Deakin tricked the Halifax into believing that he was somebody else. The reason for Mr Deakin's dishonesty was that the Halifax's in-house rules prohibited a sale to an employee or his family. His dishonesty was neither here nor there as far as the Corbetts were concerned. Their only legitimate concern was that their house should be sold at a fair market value. The Deakins were unaware that the sale was at an undervalue and the dishonesty or lack of good faith on the Deakins' part should, in my judgment, be viewed as quite independent of the fact that the sale was at less than market value. Accordingly I agree that there never was any equity upon which the Corbetts could rely to seek to set aside the sale. Improper or irregular exercise of the power of sale in Section 104 (2) does not include circumstances of which the mortgagee has no knowledge and in which the Corbetts had no legitimate concern. In short, the Halifax's in-house rules and whether they were properly applied was nothing to do with the Corbetts. I also agree that if, contrary to my view, the judge had a discretion to set the sale aside he exercised it wrongly. There were compelling reasons why the sale should stand and the Corbetts be left to their remedy in damages. These included: (1) that Yew Tree Farm was a family home housing minor children; (2) the delay; (3) the work that had been done to the property and; (4) the recent rise in property values. Accordingly, I agree with the order proposed by my Lord. Lord Justice Schiemann I agree with both judgments. Order: Appeal allowed; costs order to be agreed at a future date. (Order does not form part of the approved judgment)

Judgment of the Court of First Instance (Fifth Chamber) of 9 July 2002. - Rougemarine SARL v Commission of the European Communities. - Programme encouraging the development and distribution of European audiovisual works (MEDIA II) - Decision to award financial support - Refusal - Implied reasons. - Case T-333/00. European Court reports 2002 Page II-02983 Summary Parties Grounds Decision on costs Operative part Keywords Acts of the institutions - Statement of reasons - Obligation - Scope - Commission decision refusing the award of financial support under a programme encouraging the development and distribution of European audiovisual works (Art. 253 EC) Summary $$The question whether the statement of reasons in a decision meets the requirements of Article 253 EC must be assessed in the light not only of its wording but also of its context and of all the legal rules governing the matter in question. In the case of a decision by the Commission refusing to award financial support under the MEDIA II programme encouraging the development and distribution of European audiovisual works, the summary nature of the statement of reasons in such a decision seems to be an inevitable consequence of the large number of applications for support, on which the Commission must give a decision in a short period. Providing more detailed reasons in support of each individual decision would slow down considerably the process of awarding the Community funds available. Although terse, the statement of reasons in the decision concerned does enable the applicant to defend its rights and the Community Court to exercise its supervisory jurisdiction. ( see paras 43-44 ) Parties In Case T-333/00, Rougemarine SARL, established in Paris (France), represented by T. Levy and O. Rezlan, lawyers, with an address for service in Luxembourg, applicant, v Commission of the European Communities represented by K. Banks and M. Wolfcarius, acting as Agents, with an address for service in Luxembourg, defendant, supported by Council of the European Union, represented by A. Lopes Sabino, acting as Agent, intervener, APPLICATION for annulment of the Commission's decision, contained in a letter of 5 September 2000, refusing to grant the applicant financial support under the MEDIA II programme and for damages to compensate for the harm suffered as a result of that refusal, THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fifth Chamber), composed of: J.D. Cooke, President, R. García-Valdecasas and P. Lindh, Judges, Registrar: B. Pastor, Principal Administrator, having regard to the written procedure and further to the hearing on 22 February 2002, gives the following Judgment Grounds Legal background 1 On 10 July 1995 the Council adopted Decision 95/563/EC on the implementation of a programme encouraging the development and distribution of European audiovisual works (MEDIA II - Development and distribution) (1996- 2000) (OJ 1995 L 321 p. 25). 2 As the body responsible for implementation of the programme, the Commission awards financial support to undertakings whose projects it selects following calls for proposals, as provided for in Article 5 of Decision 95/563. 3 The fourth paragraph of Article 3 of Decision 95/563 identifies the businesses which are eligible for such aid: Without prejudice to the agreements and conventions to which the Community is a contracting party, the businesses benefiting from the programme must be in the possession and continue to be in the possession, whether directly, or by majority participation, of the Member States and/or of nationals from Member States. 4 In Call for proposals No 3/2000, the Commission laid down guidelines (hereinafter the Guidelines) for the submission of proposals by independent European production companies seeking financial support for the development of audiovisual works (fiction, creative documentaries). 5 The second indent of paragraph 2 of the Guidelines defines a European production company as follows: A company whose main activity is audiovisual production and which is owned, whether directly or by majority participation, by nationals of the Member States of the European Union, the EEA or other European countries participating in the MEDIA programme, and registered in one of those countries. 6 Paragraph 3.1.1 of the Guidelines lays down the following criteria for selecting proposed audiovisual works: - quality and originality of the concept (evaluated on the basis of treatment, script, storyboard etc.) - track record of the applicant company and its staff ... - the project's production potential ... - suitability of the project for transnational exploitation .... 7 The Guidelines state at the end of the first paragraph that the Commission has requested the European MEDIA Development Agency (EMDA) to assist it in evaluating proposals. Facts of the dispute 8 The applicant is an audiovisual production company established in France. Its manager and majority shareholder, Mr S. Aloui, who is of Tunisian nationality, has been a French resident since 1991. 9 The applicant responded to a number of calls for proposals issued in the context of the MEDIA II programme, without success. On 30 March 2000, following publication of Call for proposals No 3/2000, its manager enquired as follows of the Commission: I should like to propose a project in response to Call No 3/2000 for proposals for the award of a grant for the development of audiovisual works. Rougemarine is a French independent production company. It is majority owned by its manager, who is not a national of any of the Member States of the European Union or of any other European State that participates in the MEDIA programme. I am uncertain whether [Rougemarine] is considered to be a European production company within the meaning of the definition in [the Guidelines]. ... 10 By an e-mail of 31 March 2000 the Commission replied that the applicant did not appear to fall within the definition of a European production company laid down in the Guidelines. 11 On 14 April 2000 the applicant submitted a project entitled Hôr in response to Call for proposals No 3/2000. The Commission acknowledged receipt on 26 May 2000 and stated that projects would be evaluated by an independent group of experts. 12 By a letter of 5 September 2000 (hereinafter the contested decision) the Commission informed the applicant that it had decided not to select the Hôr project, stating as follows: The assessment process in respect of the proposals we have received is now closed and the [Hôr] project has unfortunately not been selected. All the projects submitted (577 applications altogether) were carefully examined in the light of the following selection criteria: - quality and originality of the concept; - experience of the applicant company and its team members; - suitability of the project for production; - suitability for transnational distribution. In the light of the excellent quality of a large number of proposed projects the Commission selected 90 projects following this call, for a total budget of EUR 3.9 million, giving an acceptance rate of 16%. Even though we have been unable to give you a positive response as regards the project referred to, we thank you for your interest in the MEDIA programme. We hope you will take part in a future call for proposals in the context of this programme. Procedure 13 By application lodged at the Registry of the Court of First Instance on 3 November 2000, the applicant brought this action. 14 By application lodged at the Registry of the Court on 27 December 2000, the Council requested leave to intervene in the proceedings in support of the Commission. By order of 29 January 2001, the President of the Fifth Chamber of the Court allowed that application. 15 The intervener lodged its statement in intervention on 6 March 2001. 16 Upon hearing the report of the Judge-Rapporteur, the Court (Fifth Chamber) decided to open the oral procedure. 17 The parties presented oral argument and answered questions put to them by the Court at the hearing on 22 February 2002. Forms of order sought 18 The applicant claims that the Court should: - uphold the plea of illegality against Decision 95/563; - annul the contested decision; - award it compensation for the harm caused by that decision; - order the Commission to pay the costs. 19 The Commission contends that the Court should: - dismiss the plea of illegality and the application for annulment as inadmissible or, in the alternative, unfounded; - dismiss the application for compensation; - order the applicant to pay the costs. 20 The intervener clams that the Court should: - dismiss the plea of illegality in regard to Decision 95/563; - order the applicant to pay the costs. The application for annulment 21 The applicant relies on a single plea in law, alleging that the contested decision was discriminatory. It claims that the Commission refused to award it financial support on the ground that its majority shareholder is Tunisian. Whilst that ground is not made explicit in the contested decision, the applicant claims that it was in fact the decisive factor. The applicant considers that that it has suffered discrimination and challenges the legality of the contested decision and, in the alternative, raises a plea of illegality in respect of the nationality condition laid down in the fourth paragraph of Article 3 of Decision 95/563. Admissibility Arguments of the parties 22 The Commission contends that the application for annulment is inadmissible. It takes the view that the applicant does not have locus standi to bring proceedings against the contested decision by challenging reasons on which the decision was not based. The Commission denies the applicant's allegation that its project was not selected because it does not meet the eligibility criterion relating to European production company status (fourth paragraph of Article 3 of Decision 95/563). It states that the sole basis of the contested decision is the fact that, following an assessment by an independent expert, the applicant's project did not satisfy the selection criteria (paragraph 3.1.1 of the Guidelines) and was therefore not eligible for Community funding. In those circumstances, there is no question that there were any unstated grounds for rejection. The applicant accordingly does not have locus standi to challenge a ground on which the contested decision is not based. Findings of the Court 23 The Commission's arguments go to the relevance of the applicant's pleas rather than its locus standi. Whether the contested decision is based by implication on the fact that the applicant is not a European production company within the meaning of the definition in the fourth paragraph of Article 3 of Decision 95/563 is a matter of substance rather than admissibility. 24 The action is therefore admissible. Substance Arguments of the parties 25 The applicant alleges first of all that the contested decision infringes Article 12 EC and the fundamental principle of equality. 26 The Commission's systematic opposition to the applicant's various projects is evidence that the real basis for the contested decision is the nationality of its majority shareholder. 27 The applicant states that, despite its best efforts, all the projects it has submitted under the MEDIA programme have been rejected by the Commission in exactly the same terms, which shows that the Commission is intent on eliminating it without further explanation before decisions are even taken. 28 Further, the Commission stated in its e-mail of 31 March 2000 that the applicant did not appear to fall within the definition of a European production company. 29 The applicant claims that the projects which it submitted in response to Call for proposals Nos 3/97, 3/98 and 3/2000 satisfied the selection criteria. It points, inter alia, to the factors indicating that the Hôr project did meet the selection criteria as regards the quality and originality of the concept, the know-how of the production company and members of its team, the project's production potential and the possibilities of transnational production. 30 Moreover the Commission never mentioned the existence of an expert's report before this case was brought. The applicant argues that the Commission could not have rejected the Hôr project without referring to the expert's report if it existed at the time of the contested decision. The applicant considers that that fact demonstrates that the Commission in reality rejected its application simply on the basis that its majority shareholder is Tunisian, although that is not expressly stated to be the reason in the contested decision. 31 In the applicant's view, the nationality criterion applied to it results in discrimination between European companies according to the nationality of their majority shareholder; such discrimination is contrary to the general principle of equal treatment laid down in the case-law and in Article 12 EC. 32 By its second plea, the applicant challenges the legality of the eligibility criterion relating to the nationality of shareholders in European production companies laid down in the fourth paragraph of Article 3 of Decision 95/563, in the light of Article 12 EC and the fundamental principle of equality. 33 The Commission rejects those allegations, claiming that the refusal contained in the contested decision is attributable to the intrinsic weakness of the applicant's project and not to discrimination of any kind. It takes the view that the action is unfounded because it complains of a ground for refusal of which the contested decision makes no mention and, moreover, that the decision contains a satisfactory statement of reasons. 34 In the alternative, the Commission argues that the nationality condition in question is compatible with the principle of non-discrimination. 35 The Council submits in that regard that the nationality criterion challenged by the applicant is objective and non-discriminatory. It points out that there is no general principle of Community law obliging the Community to accord the same treatment in all respects to third countries and their nationals as that accorded to Member States and their citizens (Case 52/81 Faust v Commission [1982] ECR 3745, paragraph 25; Case C-122/95 Germany v Council [1998] ECR I-973, paragraph 56; and Joined Cases C-364/95 and C-365/95 T. Port [1998] ECR I-1023, paragraph 76). 36 Furthermore, Article 12 EC is the basis for the principle of equal treatment of Community nationals; the principle does not as a rule apply to nationals of third countries (Case 223/86 Pesca Valentia [1988] ECR 83, paragraph 18; Joined Cases C-64/96 and C-65/96 Uecker and Jacquet [1997] ECR I-3171, paragraph 16). Findings of the Court 37 It must be pointed out that the grounds for the contested decision relate solely to the shortcomings of the project for which the applicant sought the Community's financial assistance. The contested decision makes no mention of the applicant's eligibility for the MEDIA II programme or Call for proposals No 3/2000 in the light of the definition of a European production company. The alleged discriminatory nature of the eligibility criterion in the fourth paragraph of Article 3 of Decision 95/563 would therefore prima facie seem to be irrelevant, in that the grounds of the contested decision do not mention application of that criterion. 38 The applicant considers, however, that the basis for the contested decision is, by implication, the fact that it is not a European production company within the meaning of the fourth paragraph of Article 3 of Decision 95/563. Having regard to the clear wording of the contested decision, it is for the applicant to prove that the decision is in fact based on an implicit ground linked to the nationality of its main shareholder. In order to prove that, the applicant relies, first, on the rejections it received in response to Call for proposals Nos 3/97 and 3/98 and, second, on the Commission's letter of 31 March 2000 informing it that it did not appear to fall within the definition of a European production company. 39 However, it was because of their inherent quality, not for any reason relating to the applicant's ineligibility, that the Commission refused the applicant's applications for financial support in response to Call for proposals Nos 3/97 and 3/98. 40 It is true that the Commission told the applicant in its letter of 31 March 2000 that it [did] not appear to fall within the definition of a European production company laid down in the Guidelines. 41 However, the fact remains that the applicant did not consider itself bound by that letter and subsequently applied for financial support in response to Call for proposals No 3/2000. When it dealt with that application, the Commission did not check whether the applicant met the nationality criterion laid down in the fourth paragraph of Article 3 of Decision 95/563. It is clear from the file that the Commission did indeed consider the merits of the applicant's project. The Commission has produced the report of the independent expert responsible for evaluating applications for financial support. This pointed out the project's shortcomings and in particular the fact that the script did not seem to be developed to a sufficient degree and that the proposed budget was too large given the potential audience. In those circumstances there can accordingly be no doubt that the applicant's project was properly evaluated by the Commission against the selection criteria. 42 That finding cannot be called into question either by the fact that the contested decision does not state the particular factors which led the Commission to find that the applicant's project did not fulfil the selection criteria in Call for proposals No 3/2000, or by the fact that Commission did not, before this action was brought, produce or mention the expert's report on the basis of which it adopted the contested decision. 43 In so far as the applicant's complaints may be understood as also alleging that the reasoning in the contested decision was inadequate, the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed in the light not only of its wording but also of its context and of all the legal rules governing the matter in question. 44 In this case, the summary nature of the statement of reasons in the decision by which the Commission refused to award financial support under the MEDIA II programme seems to be an inevitable consequence of the large number of applications for support submitted in response to Call for proposals No 3/2000, on which the Commission had to give a decision in a short period. It is clear from the contested decision that the Commission rejected approximately 84% of the 577 applications for financial support which it examined. In those circumstances, providing more detailed reasons in support of each individual decision would have significantly slowed down the process of awarding the Community funds available under Call for proposals No 3/2000 (see by way of analogy Case C-213/87 Gemeente Amsterdam and VIA v Commission [1990] ECR I-221 (Summary publication), paragraph 2). Although terse, the statement of reasons in the contested decision did enable the applicant to defend its rights and the Court of First Instance to exercise its supervisory jurisdiction. 45 It follows that the applicant has not succeeded in proving that the contested decision is based by implication on the fact that the Commission took the view that it was not a company eligible for financial support under the MEDIA II programme. 46 Accordingly, the complaints alleging that the definition of a European production company is discriminatory are not relevant and must therefore be dismissed. There is therefore no need to assess the merits of the applicant's plea of illegality as regards the definition of a European production company contained in the fourth paragraph of Article 3 of Decision 95/563, since that too is irrelevant. 47 The application for annulment must therefore be dismissed. The application for compensation Arguments of the parties 48 The applicant claims compensation for the harm suffered as a result of the fact that it was, in its view discriminated against, which it provisionally evaluates at EUR 2 446 386.70. 49 The Commission contends that the applicant has not shown that the conditions giving rise to liability on the part of the Community are met in this case. Findings of the Court 50 It is settled case-law that, in order for the Community to incur non-contractual liability, a number of conditions must be satisfied concerning the illegality of the conduct alleged against the Community institutions, the fact of the damage and the existence of a causal link between that conduct and the damage complained of (see, to that effect, Case C-87/89 Sonito and Others v Commission [1990] ECR I-1981, paragraph 16, and Case T-13/96 TEAM v Commission [1998] ECR II-4073, paragraph 68). 51 It is clear from an examination of the application for annulment that, since the Commission did not commit any illegal act capable of causing the Community to incur liability, one of the necessary conditions is not met. 52 Accordingly the application for compensation must be dismissed, without there being any need to consider whether the other conditions giving rise to liability on the part of the Community are met. 53 It follows from all the foregoing that the action must be dismissed in its entirety. Decision on costs Costs 54 Under Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, and the Commission has applied for costs, it must be ordered to pay the costs incurred by the Commission in addition to its own costs. 55 Pursuant to Article 87(4) of the Rules of Procedure of the Court of First Instance, the Council, which intervened, must bear its own costs. Operative part On those grounds, THE COURT OF FIRST INSTANCE (Fifth Chamber) hereby: 1. Dismisses the application; 2. Orders the applicant to pay the costs incurred by the defendant in addition to its own; 3. Orders the intervener to bear its own costs.

CITATION: Ryabikhina v. Savranskiy, 2011 ONCA 219 DATE: 20110322 DOCKET: C52486, C52793 & M39716 COURT OF APPEAL FOR ONTARIO Sharpe, Gillese and Karakatsanis JJ.A. BETWEEN Nadejda Ryabikhina Plaintiff (Appellant) and Stanislav (Stan) (Stas) Savranskiy Defendant (Respondent) Nadejda Ryabikhina and Elena Ryabikhina, in person Peter Danson, for the respondent Stanislav (Stan) (Stas) Savranskiy Heard: March 21, 2011 On appeal from the order of Justice Edward P. Belobaba of the Superior Court of Justice dated July 6, 2010. APPEAL BOOK ENDORSEMENT [1] The motion judge did not err by disposing of this matter on the basis of qualified privilege and common law privilege.  There was no triable issue as to malice.  As a result, it was not necessary to determine the truth of the statements complained of.  Accordingly, the appeal is dismissed.  Costs to the respondent fixed at $5,000 inclusive of disbursements and applicable taxes.

JUDGMENT OF THE COURT (First Chamber) 30 May 2013 ( *1 ) ‛Directive 93/13/EEC — Unfair terms in consumer contracts — Residential tenancy agreement between a landlord acting on a commercial basis and a tenant acting on a non-commercial basis — Examination by the national court, of its own motion, as to whether a contractual term is unfair — Penalty clause — Annulment of the clause’ In Case C-488/11, REQUEST for a preliminary ruling under Article 267 TFEU from the Gerechtshof te Amsterdam (Netherlands), made by decision of 13 September 2011, received at the Court on 23 September 2011, in the proceedings Dirk Frederik Asbeek Brusse, Katarina de Man Garabito v Jahani BV, THE COURT (First Chamber), composed of A. Tizzano, President of the Chamber, M. Ilešič, E. Levits, M. Safjan and M. Berger (Rapporteur), Judges, Advocate General: P. Mengozzi, Registrar: A. Calot Escobar, having regard to the written procedure, after considering the observations submitted on behalf of: — the Hungarian Government, by M. Fehér and K. Szíjjártó, acting as Agents, — the European Commission, by M. van Beek and M. Owsiany-Hornung, acting as Agents, having decided, after hearing the Advocate General, to proceed to judgment without an Opinion, gives the following Judgment This request for a preliminary ruling concerns the interpretation of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29) (‘the Directive’), in particular Article 6(1) thereof. The request has been made in proceedings between, on the one hand, Mr Asbeek Brusse and Ms de Man Garabito and, on the other, Jahani BV (‘Jahani’) concerning the payment, by the former parties, of rent arrears, contractual interest and penalties due under a residential tenancy agreement. Legal context European Union law The ninth and tenth recitals in the preamble to the directive are worded as follows: ‘… “acquirers of goods and services should be protected against the abuse of power by the seller or supplier, in particular against one-sided standard contracts and the unfair exclusion of essential rights in contracts”; … more effective protection of the consumer can be achieved by adopting uniform rules of law in the matter of unfair terms; … those rules should apply to all contracts concluded between sellers or suppliers and consumers; … as a result inter alia contracts relating to employment, contracts relating to succession rights, contracts relating to rights under family law and contracts relating to the incorporation and organisation of companies or partnership agreements must be excluded from this Directive’. Article 1 of the directive provides: ‘1. The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer. 2. The contractual terms which reflect mandatory statutory or regulatory provisions … shall not be subject to the provisions of this Directive.’ Article 2 of the directive defines the concepts of ‘consumer’ and ‘seller or supplier’ as follows: ‘For the purposes of this Directive: ... (b) “consumer” means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession; (c) “seller or supplier” means any natural or legal person who, in contracts covered by this Directive, is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned.’ Article 3 of the directive defines an unfair term as follows: ‘1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. ... 3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.’ So far as concerns the effects linked to a finding that a term is unfair, Article 6(1) of the directive provides: ‘Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.’ Under Article 7(1) of the directive, ‘Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers’. The annex to the directive contains a list of the terms referred to in Article 3(3) thereof. Those terms include: ‘1. Terms which have the object or effect of: ... (e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation; ...’ National law The directive was implemented in the Netherlands by the provisions on standard terms of contracts contained in Articles 6:231 to 6:247 of the Burgerlijk Wetboek (Civil Code) (‘the BW’). The first paragraph of Article 6:233, point (a), of the BW provides: ‘A clause constituting one of the standard terms of a contract may be declared invalid: (a) if it is excessively onerous for the other party, having regard to the nature and content of the contract, the manner in which the terms came to be formulated and the interests of each party, as evident to the other, and the other circumstances of the case’. According to Article 3:40 of the BW, a measure which is contrary to public morality, public policy or a mandatory statutory provision is to be considered invalid. However, in the case of infringement of a provision which seeks to protect only one of the parties to a multilateral measure, there is merely an option to annul the measure, in so far as the scope of the provision at issue does not contain indications to the contrary. In respect of penalty clauses, Article 6:94(1) of the BW provides that the court has, at the debtor’s request, the power to mitigate the penalty provided for if equity evidently requires it. In addition, it is apparent from the file before the Court that, in appeal proceedings, the court dealing with those proceedings may rule only on the complaints which were put forward by the parties in the first claims lodged on appeal. The court hearing the appeal must, however, apply of its own motion the relevant provisions of public policy, even if these have not been invoked by the parties. The dispute in the main proceedings and the questions referred for a preliminary ruling In 2007, Jahani, a company letting residential property on a commercial basis, rented to Mr Asbeek Brusse and Ms de Man Garabito, who were acting on a non-commercial basis, premises to be used for residential purposes in Alkmaar (the Netherlands). The tenancy agreement for this purpose was concluded on the basis of standard terms drawn up by a professional real-estate association, the Raad voor Onroerende Zaken (Real Estate Council). Those standard terms contained, inter alia, a penalty clause drafted as follows: ‘20.1 The tenant shall be in default by virtue of the expiry of a specified period. 20.2 In every case where the tenant is in default as regards the timely and full payment of a specified sum of money, he shall be obliged to pay 1% interest per month on the principal sum owing, from the due date to the date on which the principal sum is paid in full. … 20.6 The tenant shall owe the landlord an immediately payable penalty of EUR 25 per calendar day for each obligation arising from this agreement and the accompanying Standard Terms which he fails to fulfil or infringes, without prejudice to his obligation to remedy the breach and without prejudice to any other rights that the landlord may have to compensation or otherwise. …’ The rent provided for in the tenancy agreement, which was initially set at EUR 875 per month, was increased to EUR 894.25 from 1 July 2008, pursuant to the indexation clause provided for by that contract. Mr Asbeek Brusse and Ms de Man Garabito did not pay the sum corresponding to that increase in rent. They paid, in respect of February 2009, a total of EUR 190 and then ceased to pay rent. In July 2009, Jahani brought proceedings against the tenants, seeking, inter alia, termination of the tenancy agreement and an order requiring the defendants to pay a total of EUR 13 897.09, which was made up as follows: — EUR 5 365.50 in respect of rent; — EUR 156.67 in respect of contractual interest already due; — EUR 96.25 in respect of rent owed due to rent indexation; — EUR 4 525 in respect of penalties for unpaid rent; — EUR 3 800 in respect of penalties for unpaid rent indexation; and — EUR 658.67 in extrajudicial costs. By judgment of 21 October 2009, the Rechtbank Alkmaar (Alkmaar District Court) upheld Jahani’s claims. Before the referring court, to which they had applied on appeal, Mr Asbeek Brusse and Ms de Man Garabito requested that the amounts granted by way of penalties be reduced, having regard to the discrepancy between, on the one hand, those sums, and, on the other, the detriment suffered by the landlord. In those circumstances, the Gerechtshof te Amsterdam (Amsterdam Regional Court of Appeal) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) Should a person who lets residential premises on a commercial basis and who lets a residential property to an individual be deemed to be a seller or supplier within the meaning of the Directive? Does a tenancy agreement between a person who lets residential premises on a commercial basis and a person who rents such premises on a non-commercial basis fall within the scope of the Directive? (2) Does the fact that Article 6 of the Directive must be regarded as a provision of equal standing to national rules which rank, within the domestic legal system, as rules of public policy mean that, in a dispute between individuals, the national transposition measures with regard to unfair contractual terms are a matter of public policy, so that the national court is competent and obliged, both in first-instance proceedings and in appeal proceedings, of its own motion (and thus also outside the ambit of the grounds of complaint), to assess a contractual term against the national transposition measures and to find that term to be void if it comes to the conclusion that the term is unfair? (3) Is it compatible with the practical effect of [European Union] law that the national court does not refrain from applying a penalty clause which must be deemed to be an unfair contractual term within the meaning of the Directive, but, by the application of national legislation, merely mitigates the penalty, in a case where an individual has invoked the mitigation powers of the court, but not the voidability of the term concerned?’ The questions referred The first question By its first question, the referring court is essentially asking whether a tenancy agreement relating to premises to be used as a residence, concluded between a landlord acting for purposes relating to his trade, business or profession and a tenant acting on a non-commercial basis, comes within the scope of the directive. Article 1(1) of the directive defines its purpose. There is, however, a degree of discrepancy between the various language versions of that provision. Thus, the Dutch version of Article 1(1) of the directive states that the purpose of the latter is to approximate the national provisions relating to unfair terms in contracts concluded between a ‘seller’ (‘verkoper’) and a consumer. The other language versions of that provision use, for their part, an expression which is wider in scope to designate the other party to the contract with the consumer. The French version of Article 1(1) of the directive refers to contracts concluded between a ‘professionnel’ and a consumer. That wider approach is found in the Spanish version (‘profesional’), the Danish version (‘erhvervsdrivende’), the German version (‘Gewerbetreibender’), the Greek version (‘επαγγελματίας’), the Italian version (‘professionista’) and the Portuguese version (‘profissional’). The English version uses the terms ‘seller or supplier’. It is settled case-law that the need for uniform application and, accordingly, for uniform interpretation of a European Union measure makes it impossible to consider one version of the text in isolation, but requires that that measure be interpreted on the basis of both the real intention of its author and the aim that the latter seeks to achieve, in the light, in particular, of the versions in all other official languages (see, inter alia, Case C-569/08 Internetportal und Marketing [2010] ECR I-4871, paragraph 35, and Case C-52/10 Eleftheri tileorasi and Giannikos [2011] ECR I-4973, paragraph 23). It must be observed in this connection that the term ‘verkoper’, used in the Dutch version, is defined in Article 2(c) of the directive in the same way as in the other language versions, as designating ‘any natural or legal person who … is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned’. It thus appears that, beyond the term used to designate the other party to the contract with the consumer, the legislature’s intention was not to restrict the scope of the directive solely to contracts concluded between a seller and a consumer. In addition, it is necessary to note that no provision, in the body of the directive, specifies the types of contracts to which the directive applies. While a number of the recitals in the preamble thereto, such as the ninth recital, draw attention to the need to protect acquirers of goods and services against the abuse of power by the seller or supplier, the tenth recital in the preamble to the directive has a wider scope inasmuch as it states that the uniform rules of law in the matter of unfair terms should apply to ‘all contracts’ concluded between sellers or suppliers and consumers, as defined in Article 2(b) and (c) of the directive. It is therefore by reference to the capacity of the contracting parties, according to whether or not they are acting for purposes relating to their trade, business or profession, that the directive defines the contracts to which it applies. That criterion corresponds to the idea on which the system of protection implemented by the directive is based, namely that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge. This leads to the consumer agreeing to terms drawn up in advance by the seller or supplier without being able to influence the content of those terms (see, inter alia, Case C-618/10 Banco Español de Crédito [2012] ECR, paragraph 39, and Case C-472/11 Banif Plus Bank [2013] ECR, paragraph 19). That protection is particularly important in the case of a residential tenancy agreement concluded between, on the one hand, an individual acting on a non-commercial basis and, on the other hand, a real estate professional. The consequences of the inequality existing between the parties are aggravated by the fact that, from an economic perspective, such a contract relates to an essential need of the consumer, namely to obtain lodging, and involves sums which most frequently, for the tenant, represent one of the most significant items in his budget, while, from a legal perspective, this is a contract which, as a general rule, is covered by complex national rules about which individuals are often poorly informed. It must, however, be observed that, in accordance with Article 1(2) of the directive, contractual terms which reflect mandatory statutory or regulatory provisions of national law are not subject to the provisions of the directive (see Case C-92/11 RWE Vertrieb [2013] ECR, paragraph 25). It is a matter for the national court to ascertain whether that is true of the terms which are the subject of the dispute pending before it. In the light of the foregoing, the answer to the first question is therefore that the directive must be interpreted as meaning that, subject to contractual terms which reflect mandatory statutory or regulatory provisions set out by national law, which is a matter for the national court to ascertain, it applies to a residential tenancy agreement concluded between a landlord acting for purposes relating to his trade, business or profession and a tenant acting for purposes which do not relate to his trade, business or profession. The second question By its second question, the referring court is essentially asking whether, in the light of the Court’s case-law relating to Article 6 of the directive, the latter must be interpreted as meaning that the rules transposing it into national law must be accorded the procedural treatment reserved, within the domestic legal system, to rules of public policy, with the result that the national court is obliged to examine of its own motion whether a contractual term is unfair and, if necessary, to annul that term. There are two parts to this question, the first relating to the obligation devolving on the national court to determine, of its own motion, whether a term is unfair, while the second concerns the consequences to be drawn by the national court from a finding that a term is unfair. The obligation on the court to determine, of its own motion, whether a term is unfair It is apparent from the file before the Court that the first part of the second question is linked to the existence, in national law, of a rule which requires a national court hearing appeal proceedings to keep in general to the complaints submitted by the parties and to base its decision on those complaints, but which allows it nevertheless to apply, of its own motion, provisions of public policy. As a preliminary point, it must be observed that Article 6(1) of the directive, according to which unfair terms are not binding on the consumer, is a mandatory provision which aims to replace the formal balance which the contract establishes between the rights and obligations of the parties with an effective balance which re-establishes equality between them (see, inter alia, Banco Español de Crédito, paragraph 40, and Banif Plus Bank, paragraph 20). In order to guarantee the protection intended by the directive, the Court has already stated on several occasions that the imbalance which exists between the consumer and the seller or supplier may be corrected only by positive action unconnected with the actual parties to the contract (see, inter alia, Banco Español de Crédito, paragraph 41, and Banif Plus Bank, paragraph 21 and the case-law cited). It is in the light of that consideration that the Court has held that the national court is required, as soon as it has available to it the legal or factual elements necessary for that task, to assess of its own motion whether a contractual term falling within the scope of the directive is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier (see, inter alia, Banco Español de Crédito, paragraph 42, and Banif Plus Bank, paragraph 22). Consequently, the role attributed to the national court by European Union law in this area is not limited to a mere power to rule on the possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion, where it has available to it the legal and factual elements necessary for that task (see, inter alia, Banco Español de Crédito, paragraph 43, and Banif Plus Bank, paragraph 23). In respect of the implementation of those obligations by a national court ruling in appeal proceedings, it must be noted that, in the absence of European Union legislation, the procedural rules governing appeal proceedings seeking to safeguard the rights that individuals derive from European Union law fall within the internal legal order of the Member States by virtue of the principle of procedural autonomy of those Member States. However, those rules must not be less favourable than those governing similar domestic actions (principle of equivalence) and may not be framed in such a way as to make it in practice impossible or excessively difficult to exercise the rights conferred by European Union law (principle of effectiveness) (see, to that effect, Banco Español de Crédito, paragraph 46, and Banif Plus Bank, paragraph 26). So far as concerns the principle of equivalence, to which the second question for a preliminary ruling implicitly refers, it must be pointed out that, as recalled in paragraph 38 above, Article 6(1) of the directive is a mandatory provision. Furthermore, according to the Court’s case-law, that directive as a whole constitutes a measure which is essential to the accomplishment of the tasks entrusted to the European Union and, in particular, to raising the standard of living and the quality of life throughout the European Union (see Case C-243/08 Pannon GSM [2009] ECR I-4713, paragraph 26, and Banco Español de Crédito, paragraph 67). The Court has, furthermore, held that, in view of the nature and importance of the public interest underlying the protection which the directive confers on consumers, Article 6 thereof must be regarded as a provision of equal standing to national rules which rank, within the domestic legal system, as rules of public policy (see Case C-40/08 Asturcom Telecomunicaciones [2009] ECR I-9579, paragraph 52, and order in Case C-76/10 Pohotovost’ [2010] ECR I-11557, paragraph 50). It must be held that that classification extends to all the provisions of the directive which are essential for the purpose of attaining the objective pursued by Article 6 thereof. It follows that, where the national court has the power, under internal procedural rules, to examine of its own motion the validity of a legal measure in the light of national rules of public policy, which, according to the information provided in the order for reference, is the case in the Netherlands judicial system for a court ruling in appeal proceedings, it must also exercise that power for the purposes of assessing of its own motion, in the light of the criteria laid down in the directive, whether a contractual term coming within the scope of that directive may be unfair. The national court is also under such an obligation where, under the domestic legal system, it merely has a discretion to consider of its own motion whether such a term is in conflict with national rules of public policy (see Asturcom Telecomunicaciones, paragraph 54 and the case-law cited). The consequences to be drawn by the national court from the finding that a contractual term is unfair It is apparent from the file before the Court that the second part of the second question is linked to the existence, in national law, of a rule according to which the national court cannot, generally, annul an unfair term unless the consumer has argued that it is invalid. The national court may, however, annul of its own motion a term which is contrary to public policy or to a mandatory statutory provision, where the scope of that statutory provision warrants such a sanction. It must be recalled that the first part of Article 6(1) of the directive requires Member States to lay down that unfair terms are, ‘as provided for under their national law,’ not to be binding on the consumer. The Court has interpreted that provision as meaning that it is for the national court to establish all the consequences, arising under national law, of a finding that the term in question is unfair in order to ensure that the consumer is not bound by that term (Banco Español de Crédito, paragraph 63, and Banif Plus Bank, paragraph 27). In this connection, the Court has stated that, where the national court considers a contractual term to be unfair, it must not apply it, except if the consumer opposes that non-application (see Pannon GSM, paragraph 35). It follows from that case-law that the full effectiveness of the protection provided for by the directive requires that the national court which has found of its own motion that a term is unfair should be able to establish all the consequences of that finding, without waiting for the consumer, who has been fully informed of his rights, to submit a statement requesting that that term be declared invalid (Banif Plus Bank, paragraphs 28 and 36). For the same reasons as those set out in paragraphs 43 and 44 of the present judgment, it follows that, where the national court has the power, under internal procedural rules, to annul of its own motion a term which is contrary to public policy or to a mandatory statutory provision the scope of which warrants such a sanction, which, according to the information provided in the order for reference, is true in the Netherlands judicial system with regard to a court ruling in appeal proceedings, it must also annul of its own motion a contractual term which it has found to be unfair in the light of the criteria laid down by the directive. In that context, it must be recalled that the principle of audi alteram partem, as a general rule, requires the national court which has found of its own motion that a contractual term is unfair to inform the parties to the dispute of that fact and to invite each of them to set out its views on that matter, with the opportunity to challenge the views of the other party, in accordance with the formal requirements laid down in that regard by the national rules of procedure (Banif Plus Bank, paragraphs 31 and 36). In the light of the foregoing considerations, the answer to the second question is that the directive must be interpreted as meaning that: — where a national court, before which an action has been brought by a seller or supplier against a consumer concerning the performance of a contract, has the power, under internal procedural rules, to examine of its own motion whether the term upon which the claim is based is contrary to national rules of public policy, it must, in the same way, where it has established that that term falls within the scope of that directive, assess of its own motion whether that term is unfair in the light of the criteria laid down in that directive; — where the national court has the power, under internal procedural rules, to annul of its own motion a term which is contrary to public policy or to a mandatory statutory provision the scope of which warrants such a sanction, it must, as a rule, after having invited each of the parties to set out its views on that matter, with the opportunity to challenge the views of the other party, annul of its own motion a contractual term which it has found to be unfair in the light of the criteria laid down by that directive. The third question By its third question, the referring court is essentially asking whether Article 6 of the directive can be interpreted as meaning that it allows a national court, in the case where it has established that a penalty clause is unfair, instead of disapplying that clause, merely to mitigate the amount of the penalty provided for by that clause, as it is authorised to do by the national law and as the consumer has requested. First of all, it should be stated that point 1(e) of the annex to that directive mentions, among the terms which may be declared unfair within the meaning of Article 3(3) of that directive, terms which have the object or effect of requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation. The Court has held in that regard that, while the content of that annex does not suffice in itself to establish automatically the unfair nature of a contested term, it is nevertheless an essential element on which the competent court may base its assessment as to the unfair nature of that term (Case C-472/10 Invitel [2012] ECR, paragraph 26). As regards the issue of whether the national court, in the case where it has established that a penalty clause is unfair, can merely mitigate the amount of the penalty provided for by that clause, as it is authorised to do in the present case by Article 94(1) of the BW, it must be observed that it is expressly provided in the second part of Article 6(1) of the directive that the contract concluded between the seller or supplier and the consumer is to continue to bind the parties ‘upon those terms’ if it is capable of continuing in existence ‘without the unfair terms’. The Court has inferred from that wording of Article 6(1) that national courts are required to exclude the application of an unfair contractual term in order that it does not produce binding effects with regard to the consumer, without being authorised to revise the content of that term. That contract must continue in existence, in principle, without any amendment other than that resulting from the deletion of the unfair terms, in so far as, in accordance with the rules of domestic law, such continuity of the contract is legally possible (Banco Español de Crédito, paragraph 65). The Court has also observed that that interpretation is, moreover, borne out by the objective and overall scheme of the directive. In this connection, it has pointed out that, given the nature and significance of the public interest which constitutes the basis of the protection guaranteed to consumers, the directive requires Member States, as is apparent from Article 7(1) thereof, to provide for adequate and effective means ‘to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers’. If it were open to the national court to revise the content of unfair terms included in such contracts, such a power would be liable to compromise attainment of the long-term objective of Article 7 of the directive, since it would weaken the dissuasive effect on sellers or suppliers of the straightforward non-application of those unfair terms with regard to the consumer (Banco Español de Crédito, paragraphs 66 to 69). It follows that Article 6(1) of the directive cannot be interpreted as allowing the national court, in the case where it establishes that a penalty clause in a contract concluded between a seller or supplier and a consumer is unfair, to reduce the amount of the penalty imposed on the consumer instead of excluding the application of that clause in its entirety with regard to that consumer. Having regard to the foregoing, the answer to the third question is that Article 6(1) of the directive must be interpreted as meaning that it does not allow the national court, in the case where it has established that a penalty clause in a contract concluded between a seller or supplier and a consumer is unfair, merely, as it is authorised by national law, to reduce the amount of the penalty imposed on the consumer by that clause, but requires it to exclude the application of that clause in its entirety with regard to the consumer. Costs Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (First Chamber) hereby rules: 1. Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that, subject to contractual terms which reflect mandatory statutory or regulatory provisions set out by national law, which is a matter for the national court to ascertain, it applies to a residential tenancy agreement concluded between a landlord acting for purposes relating to his trade, business or profession and a tenant acting for purposes which do not relate to his trade, business or profession. 2. Directive 93/13 must be interpreted as meaning that: — where a national court, before which an action has been brought by a seller or supplier against a consumer concerning the performance of a contract, has the power, under internal procedural rules, to examine of its own motion whether the term upon which the claim is based is contrary to national rules of public policy, it must, in the same way, where it has established that that term falls within the scope of that directive, assess of its own motion whether that term is unfair in the light of the criteria laid down in that directive; — where the national court has the power, under internal procedural rules, to annul of its own motion a term which is contrary to public policy or to a mandatory statutory provision the scope of which warrants such a sanction, it must, as a rule, after having invited each of the parties to set out its views on that matter, with the opportunity to challenge the views of the other party, annul of its own motion a contractual term which it has found to be unfair in the light of the criteria laid down by that directive. 3. Article 6(1) of Directive 93/13 must be interpreted as meaning that it does not allow the national court, in the case where it has established that a penalty clause in a contract concluded between a seller or supplier and a consumer is unfair, merely, as it is authorised by national law, to reduce the amount of the penalty imposed on the consumer by that clause, but requires it to exclude the application of that clause in its entirety with regard to the consumer. [Signatures] ( *1 ) Language of the case: Dutch.

COURT OF APPEAL FOR ONTARIO CITATION: R. v. Blondin, 2016 ONCA 557 DATE: 20160708 DOCKET: C61090 MacFarland, Rouleau and Hourigan JJ.A. BETWEEN Her Majesty the Queen Respondent and Shane Blondin Appellant Eric Granger, for the appellant Moiz Rahman, for the respondent Heard and released orally:  July 5, 2016 On appeal from the conviction entered on January 29, 2015 by Justice Diane M. Lahaie of the Ontario Court of Justice. ENDORSEMENT [1] The trial judge concluded that the injuries to the victim Bates were too extensive to have resulted from the one blow the appellant admits he delivered to Bates. She concluded that the appellant continued to administer a beating to Bates after he fell to the ground following the appellant’s first punch. [2] The appellant argues there was no evidence to support this finding and it was unfair to the appellant because it was a theory not put to the appellant at trial. [3] This case proceeded solely on the ground of self-defence. It was conceded at trial and before this court that there was no issue that the one blow the appellant admits he inflicted caused injuries sufficient to amount to an aggravated assault. The trial judge rejected the appellant’s defence of self-defence and specifically rejected his evidence, that Mr. Bates swung first at him  – he avoided the swing by moving out of the way and struck back in self-defence. [4] At p. 61 of her reasons, the trial judge stated: Mr. Bates did nothing to Mr. Blondin. Mr. Bates descended into the street to support his friend. I find that he did not threaten violence.  He did not square off.  He did not swing at anyone and he did not strike any members of the accused’s group including Mr. Blondin. [5] In our view, this finding was available to her on Bates’ evidence.  It is a factual finding entitled to deference in this court. In our view, this ends the appellant’s defence. [6] The findings complained of, about a beating administered after the fact are, on particular facts of this case, irrelevant. On the basis of the case as it was argued and in our view, they have in no way infected her finding that the punch was unprovoked.  We would dismiss the appeal. “J. MacFarland J.A.” “Paul Rouleau J.A.” “C.W. Hourigan J.A.”

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1653 of 1967. Appeal from the judgment and order dated February 23, 1967 Of the Delhi High Court in C.W. No. 403-D of 1959. Sen, P. L. Juneja, R. N. Sachthey and S. P. Nayer, for the appellant. Sardar Bahadur and Yougindra Khushalani, for the respondent. The Judgment of the Court was delivered by Sikri, C.J. The judgment, reproduced below, was drafted by the late Mr. Justice Roy and we all had subscribed to it. We beard the matter formally again on November 19, 1971. We adopt the judgment as our own. This is an appeal by the Union of India by way of special leave. On April 9, 1959, the Central Government directed removal from service of Capt. S. K. Rao under r. 14 of the Army Rules, 1954. The facts leading to his removal are as follows Rao was a companymissioned officer in the Indian Army and was attached to the Army Ordnance Corps Training Centre, Secundrabad. It was alleged that on April 4, 1958, he companymitted acts of .gross misconduct. The allegations were as follows Knowing Kumari Prakash as the daughter of a brother Officer, Rao assisted her in going away from her parents protection and planning to run away with a sepoy. Rao, by threatening to cause harm to Kumari Prakashs parents, intimidated her t o visit his house where he took her in his scooter to the unit lines of 51 1 1 Gurkha Rifles where he arranged her meeting with a sepoy of the unit. He i.e. Rao acquiesced in the girl being met by the sepoy later at a tea shop nearby where she received a present of a sari and blouse from the sepoy in his presence. Rao thus actively abetted in the attempt of brother officers daughter elope with a sepoy. Rao then took Kumari Prakash to a hotel Saidya Lodge in Hyderabad and got a room to themselves by impersonating and giving a false identity as Mr. Mrs. Prakash. An inquiry into the matter was made by Court of Inquiry. The Chief of the Army Staff, after going through the proceedings of the Court of Inquiry, companysidered that the companyduct of Capt. Rao was most unbecoming of an officer. As he was of opinion that trial of the officer by a General Court Martial was inexpedient, he ordered administrative action to be taken under r. 14 of the Army Rules, 1954. By memorandum dated September 4, 1958, Rao was called upon to submit his explanation by way of defence regarding the allegations against him. The explanation of Rao was placed before the Central Government. The Central Government found it to be unsatisfactory, and on April 9, 1959, an order was passed removing the respondent from service. Capt. Rao thereupon filed a petition under Art. 226 of the Constitution for quashing the order of removal from service on the ground, inter alia, that r. 14 of the Army Rules, 1954, was ultra vires the Army Act, 1950, and that the action taken thereunder was without any authority. In the petition Rao gave a somewhat different version of what had happened. According to him he did number assist Kumari Prakash to go away from her parents house. At the hearing of the petition the only point which was urged was the validity of r. 14 of the Army Rules, 1954. If this rule was intra vires the Army Act, Rao has numbercase. The Army Rules, 1954, including r. 14, were framed in exercise of the powers companyferred by s. 191 of the Army Act, 1950. Rule 14 of the Army Rules, 1954, is as follows When after companysidering the reports on an officers misconduct, the Central Gove rnment is satisfied or the C-in-C is of the opinion, that the trial of the officer by a companyrtmartial is inexpedient or impracticable but companysiders the further retention of the said officer in the service as undesirable, the C- in-C shall companymunicate the view of the Central Government or his views, as the case may be, to the officer together with all reports adverse to him and he shall be called upon to submit his explanation and defence. In the event of the explanation of the officer being companysidered unsatisfactory by the C-in-C, or when so directed by the Central Government, the case shall be submitted to the Central Government with the officers defence and the recommendation of the C-in-C as to whether the officer should be, a dismissed from the service or b removed from the service or c called upon to retire or d called upon to resign. The Central Government, after due companysideration of the reports, the officers defence, if any, and the recommendation of the C-in-C, may dismiss or remove the officer with or without pension or call upon him to retire or resign, and on his refusing to do so, the officer may be retired from or gazetted out of the service on pension or gratuity, if any admissible to him. Under the aforesaid r. 14, action can be taken for misconduct against an officer whose further retention in service is number companysidered desirable. without the officer being tried by a companyrt-martial. Before removal he must, under the rule, be asked to submit his explanation and defence. If the explanation is found to be unsatisfactory, the Central Government has been given the power to dismiss or remove the officer. Rules are framed under S. 191 of the Army Act. Sub-section 1 of S. 191 gives power to the Central Government to make rules for the purpose of carrying into effect the provisions of the Act. Sub-section 2 a provides Without prejudice to the generality of the power companyferred by sub-section 1 , the rules made thereunder may provide for-- a the removal, retirement, release or discharge from the service of persons subject to this Act. Sections 18 19 which appear in Ch. IV of the Army Act dealing with Conditions of Service provide as follows S.18--Every person subject to this Act shall hold office during the pleasure of the President. s. 19--Subject to the provisions of this Act and the rules and regulations made thereunder the Central Government may dismiss, or remove from the service, any person subject to this Act. Offenses under the Army Act have been dealt with in ss. 34 to 70 in Ch. VI, of which S. 45 is as follows - S. 45-Any officer, junior companymissioned officer or warrant officer who behaves in a manner unbecoming his position and the character expected of him shall, on companyviction by companyrt-martial, if he is an officer, be liable to be cashiered or to suffer such less punishment as is in this Act mentioned and, if he is a junior companymissioned officer or a warrant officer, be liable to be dismissed or to suffer such less punishment as is in this Act mentioned, It was argued by companynsel for the respondent Rao that the Army Act companytained specific provisions for punishment for unbecoming companyduct, viz. s. 45. To give power to the Central Government to remove an officer without being tried and companyvicted by companyrt-martial was in derogation of S. 45 of the Army Act. Rule 14, therefore, was ultra vires the Army Act. This argument is number companyrect. Section 19 itself suggests that there should be rules, and subject to the provisions of the Act and such rules, the Central Government may dismiss or remove from the service any person subject to the Army Act. Section 191 2 a specifically gives. power to make a rule providing for the removal from the service of persons subject to the Act. It follows that there may be a valid rule where under, subject to the other provisions of the Act, the Central Government may remove a person from the service. Rule 14 is such a rule it is, therefore, number ultra vires. It was argued that the words subject to the provisions of this Act occurring in s. 19 makes s. 19 subject to s. 45, and the Central Government has thus numberpower to remove a person from the service in derogation of the provisions of s. 45. But the power under s. 19 is an independent power. Although s. 19 uses the words subject to the provisions of this Act, it speaks of removal of a person from the service. Section 45 provides that on companyviction by companyrtmartial an officer is liable to be cashiered or to suffer such less punishment as is in this Act mentioned. For removal from service under s. 19 of the Army Act read with r. 14 of the Army Rules, 1954, a companyrt-martial is number necessary. The two sections 19 and 45 of the Act are, therefore, mutually exclusive. The result is that r. 14 of the Army Rules, 1954, is number ultra vires the Army Act. The appeal is, therefore, allowed but in the circumstances of the case without any order as to companyts. The case will number go back to the High Court for disposal on merits on the other questions raised by the respondent herein in the High Court.

Mrs Justice Dobbs : This is an application for judicial review, permission having been granted by Mr Justice Collins on 11th December 2006. The Claimant, Abbey Mine Limited (AML), challenges the decision of the Defendant (The Coal Authority) of 16th December 2005 to grant Corus UK Ltd (the interested party) a mining licence and demise of rights in coal. AML seeks the quashing of the decision on the grounds that it was conspicuously unfair and unlawful both on public law and competition law grounds. Background AML was incorporated as a special-purpose vehicle in December 2004. Mr Williams is the Chairman of AML. (41) AML is a wholly-owned subsidiary of Horizon Mining Limited. Mr Williams set up the Horizon group of companies in the late 90's. (43) A sister company holds the Coal Lease and Underground Mining Licence for the Pentreclwydau Mine in South Wales. The Margam area of South Wales contains a large quantity of un-mined high quality coal (and coal bed methane from which electricity can be generated). Margam coal is particularly suited to use as coking coal for steelmaking and for use in power generation. The area also has excellent industrial transport links and a history of coal mining operations. The exploitation of the Margam coal accordingly represents a substantial business opportunity. Chronology In 1995, Modal Mining Limited, a company in which Mr Williams owns a 41% share (44), applied to the Authority for a conditional underground licence in respect of Margam. Another company, Celtic, also applied, and, following negotiations with the two companies, the site was divided into two. Modal were offered a conditional licence and option for lease for a period of five years in relation to the western part. Celtic was offered a conditional licence for the eastern part. Modal did not take up that offer and consequently the lease expired in 2003. On 13th August 2004 the Authority wrote to Modal confirming that the offer was formally withdrawn as the option had not been exercised in the intervening five year period. On 2nd November 2004, Modal was invited to make a new application should they wish to proceed further. (Wilson, p.387-9) On 10th December 2004, AML submitted an application to the Authority for a conditional underground mining licence, option for lease and exploration licence in relation to the western part of the Margam area, (i.e. the same area offered to Modal). On 14th December 2004, in accordance with the practice set out in the Guidance Notes, the Authority advertised the fact that it had received the application. On 11th February 2005, Corus and Tower Colliery submitted applications for licences for the site. Prior to evaluation of the applications, Mr Wilson, the Authority's Director of Mining Projects and Property wished to explore whether the parties would be prepared to move forward on a collaborative basis. Correspondence and meetings took place. Tower withdrew its application. On 20th April 2005 Corus wrote to say that it had not been able to secure agreement for a joint approach and wished to pursue its original application. Mr Wilson then assessed the relative merits of the two remaining applications. He decided that the application submitted by Corus was the stronger one. By a letter dated 9th September 2005 ("the Interim Decision"), Mr Wilson notified AML that its application had been refused for the following reasons: "In my opinion, the Corus application has a higher level of certainty of delivery of the project, in that finance to develop the project is available, Corus have a ready market for the coal; are proposing a single access site from existing industrial land, and are in no worse position than Abbey in relation to experience and expertise. There would, therefore, seem to be a greater likelihood of the best terms being achieved on disposal of coal to Corus. If following feasibility they choose to halt the project, the opportunity for yourselves and others to pursue the prospect will still exist" (156-7) To put this rejection letter into context, if there had been no application from Corus, Mr Wilson would have granted the licence to AML. (See: Notes of the Review Hearing (380) and Mr Wilson's letter of 15th September 2005 (495). Having taken legal advice from Leading Counsel, by a letter dated 4th October 2005 (465), AML applied for a review of the Authority's decision under the process provided for in the Guidance Notes. (82) The main thrust of the representations was: that the decision did not promote competition in accordance with the Authority's duties under section 2(2)(b) of the Coal Industry Act 1994, and that the reasons given for preferring the Corus application to that of AML were not good and sufficient reasons. The Review Hearing was fixed for 2nd December 2005. Prior to the Review Hearing, the Authority supplied no further documentation to AML or further details of the reasons. AML did not itself or through its lawyers seek or request any further documentation or particularised reasons. The Review Hearing took place on 2nd December 2005, the Authority having refused an application for an adjournment based on the fact that Leading Counsel for AML was not available on that day. The Chairman Mr Schofield explained the format of the hearing. The proceedings were not adversarial. Mr Williams would make submissions on behalf of AML setting out his grievances in relation to the decision; Mr Wilson would respond by explaining the reasons for the Interim Decision; Mr Williams could comment on them; there would be an opportunity for the panel to ask questions of both men. A detailed note was kept of the hearing by Sally Brook Shanahan, the Coal Authority's solicitor and secretary. (369-383) By a letter dated 16th December 2005 ("the Decision Letter"), the Authority informed AML that the initial decision had been upheld. The essence of the Authority's reasoning was as follows: "As you are aware, the Authority is subject to the duties set out in the Coal Industry Act 1994 (the "Act") with respect to licensing. Under section 2(1), the Authority is subject to a clear obligation to carry out its functions in a manner which is "best calculated to secure" the matters set out in section 2(1) of the Act, which include "that an economically viable coal industry in Great Britain is maintained and developed …". The phrase "best calculated" requires the Authority, in the context of completing licence/lease applications to identify which applicant (if any) is more likely to secure those matters. Under section 2(2) it is also the Authority's duty to "have regard to the desirability of securing" the matters set out in that sub-section. In its consideration of the applications, and deciding which has most potential to enable the Authority to fulfil its duties under the Act, the Panel notes as follows: (i) Corus has submitted realistic production targets, whereas AML has overly optimistic targets, which in the Panel's view are unlikely to be achievable; (ii) Corus already has surface rights at its existing site. By contrast, AML has not clearly specified the location(s) of the mine and, hence, there is no certainty regarding its ability to acquire surface rights; (iii) Corus will find it easier to obtain planning consents on an existing industrial site; (iv) Corus put forward clear, tangible timeframes for its proposals whereas AML has been less clear; (v) The Panel considered the likelihood of either party proceeding with its application. The Panel understands that Corus has recently invested about £250 million at its Port Talbot site, which will provide a strong incentive to find a secure source of coking coal at a competitive price. The Panel notes that there are a number of companies with which you have been associated and which are involved in coal mining initiatives, which have failed to make tangible progress in carrying out mining operations, and this fact has raised concerns about AML's commitment to progress the Margam site; (vi) Corus has an existing and ready market for the coal, in that it has a need for coking coal at its own Port Talbot site. AML's market is more speculative, although in practice it is also likely to seek to sell coking coal to Corus, and proposes to supply steam coals into the power generation sector. In light of the above, the Authority considers that its Section 2 duties are best satisfied by proceeding with Corus' application. In particular, this application offers greater deliverability, i.e. a greater likelihood that coal reserves in the application area will be viably recovered and developed. Under section 2(2)(a), the Authority must have regard to the desirability of securing that licensees have "at their disposal such experience and expertise" in the carrying out of coal mining operations. The Panel accepts that AML currently has within the company greater "coal mining experience and expertise" and knowledge of matters relating to coal mining in the region. AML does, however, acknowledge that it will need to employ consultants to take forward the project. Corus intends to employ the relevant mining experience and expertise to progress its proposals, and consequently would also appear to be capable of having an appropriate level of experience and expertise at its disposal in order to pursue its proposals. Under section 2(1), the Authority is required to consider whether licensees have sufficient finance to carry on coal mining operations and to discharge their liabilities. The Panel considers that neither application is materially stronger in relation to the financing of their respective proposals. Both appear able to progress to the feasibility stage. In both cases, as and when an application for a full licence is made, the Authority would need to ensure that the development and mining proposals can be financed. In your submissions, you argued that the DMPP had failed to take account of the Authority's duties under Section 2(2)(b) of the Act, concerning the promotion of competition. The Panel has given careful consideration to the competition test, but in the present case the Panel does not feel there is any compelling reason why competition is better promoted by the AML bid than by the Corus bid, particularly in the light of the Authority's very clear conclusions regarding the deliverability of the bids having regard to section 2(1). Section 2(2)(b) refers to competition between "persons carrying on or seeking to carry on coal mining operations". The Panel having taken legal advice, sees no grounds for the argument that the awarding of the mining licence to a "customer" which is producing coal to satisfy its in-house requirements is not conducive to competition. AML's argument is in any event contradicted by the fact that it does itself intend that coals mined at Margam will be used in a proposed coal fired power station in which you claim a direct interest. The Panel also notes that you have, through other group companies, interests in a number of other mining sites in South Wales and are actively pursuing proposals to join with other coal mining interest. In these circumstances, it might even be argued that competition may in fact be better promoted by the licensing of a new entrant, which does not have any existing coal mining interests, to promote diversity of production and supply. Under Section 3(4) of the Act, the Authority has a duty, where it disposes of any interests or rights in or in relation to any land or other property, to secure the best terms reasonably available for disposal. This does not override the Authority's Section 2 duties with respect to licensing. AML has put forward a pricing proposal, which if it were to commence production could potentially produce higher financial returns, although it should be noted that the above comments concerning the viability of AML's proposals call into question the extent to which these financial returns are in fact likely to be achieved. The Panel is satisfied that, in the light of the competitive tender process for this site, the Authority is securing the best terms reasonably available, having regard to its Section 2 duties with respect to licensing " (189-191) The Claimant's grounds The Claimant advances a number of grounds, which in summary amount to the following: The process by which the decision was reached was wholly unfair and defective because: i) The Authority's Guidance Notes were defective. ii) The process was fundamentally unfair. iii) The decision to grant the licence to Corus failed to take relevant material into account. iv) The Authority took irrelevant and prejudicial material into account. (This ground was not pleaded and was raised only during the course of submissions) v) The Authority's decision was anti-competitive and a breach of Chapters I and II of the Competition Act 1998 (and Articles 81 and 82 EC). vi) The Authority's decision amounted to the grant of state aid to Corus contrary to Article 88(3) EC; and was a breach of section 2(2)(b) of the Coal Industry Act 1994. Submissions Defective process This heading encompasses grounds i) – iv) which are further broken down as set out below. a) The Authority's defective notes – lack of disclosure The Claimant contends that the Authority's Guidance Notes do not conform with the requirements of fairness because they did not adequately cater for a situation where there were competing applications. The Claimant should have been given advance disclosure of all facts and matters relevant to and including the Corus application (suitably redacted), both before the interim decision and/or prior to the Review Hearing. Such advance disclosure was necessary in order to put the Claimant in a position where it was able to comment on the material aspects of the Corus application, and/or to draw appropriate comparisons with its own. As a matter of fairness, an applicant is entitled to know what concerns a decision maker has and be given an opportunity to respond: see R v Secretary of State ex parte Fayed [1998] 1 WLR 763; If that opportunity is to be meaningful, the applicant must be told the allegations being made against him which he has to meet: see Hadmor Productions v Hamilton [1983] 1 AC 191, 233 per Lord Diplock. This is particularly so in the context of a competitive licensing application, where the decision-making process involves determination of the relevant facts affecting the competing applications and then a comparative assessment or evaluation of the applications against each other. (See: Agnello v London Borough of Hounslow [2003] EWHC 3112 (Admin) at paragraphs 102-104). AML was completely in the dark about the comparative evaluation that the Panel had to make. Moreover, there was close scrutiny of AML's application with no testing of the Corus application, thus the focus is on the unsuccessful applicant, the position of Corus remaining intact on paper. The Defendant, submits that, in the context of the statutory framework, there is no legal duty of disclosure. Moreover, the claimant cannot point out any express or implied duty for the rules of natural justice to be applied to the tendering process envisaged in this case: (See: the three principles set out in Mass Energy v Birmingham City Council 1994 Env. LR 298, as referred to by Mr Justice Kay (as he then was) in the case of R v Brigend County Borough Council ex parte Jones (CO/873/199 @ pages 7 and 10). If there is such a duty of disclosure of adverse matters, the requirement of fairness is set out in paragraph 11.7 of the Guidance notes, and has to be assessed in the context of the purpose of the Review. The Claimant has misunderstood the purpose of the Review panel, which is to consider whether the Director exercised his delegated power properly by enabling the claimant to be heard on the specific matters relevant to his application. The Defendant disclosed and allowed the Claimant an adequate opportunity to comment on the facts and matters, which weighed against it, in relation to its own application. The procedure does not and cannot give a right to disclosure of facts and matters relevant to a competitor's application. This would be the antithesis of competition, risking the disclosure of commercially-sensitive material and prejudicing any subsequent competition between the applicants in respect of the same licence. The hearing is not an opportunity for the Claimant to "have a second bite at the cherry" and cannot be used as a means to get an advantage over a competitor. Disclosure of competing applications would not be practicable and redaction would not solve the problem. The case law does not support the generalised disclosure contended for by the Claimant. At most an applicant should be put in a position to address specific adverse impressions that may weigh against its own application. The case of Hadmor can be distinguished on its facts and does not lay down an absolute rule. The present case is not inconsistent with the case of Agnello v London Borough of Hounslow [2003] EWHC 3112 (Admin) as AML had passed the stage one determination of the factual basis on which the assessment of the applicants was to be based (i.e the eligibility stage). AML would have been awarded the licence had Corus not applied. This was, if anything, the comparative evaluation stage (i.e stage two) and thus the same principles do not apply. Mr Justice Silber, by reference to the case of R v. (Asha Foundation) v. The Millennium Commission [2003] EWCA Civ 88 at paragraphs 28-30, rejected the generalised disclosure of material relevant to the comparative evaluation process (stage 2), holding that an applicant may, at most and in certain specific circumstances, be entitled to be given an opportunity to comment on material on which the decision maker intended to rely, relating to him in the evaluation process. All relevant circumstances have to be taken into account and a balancing act carried out in relation to the various factors. b) The failure to invite Corus to the Review Panel hearing Claimant: There was no provision in the Guidance Notes for Corus to attend the Review hearing. The Authority should have informed Corus of the process and invited them to attend. Their absence created a lopsided impression, inclining members of the Review Panel against reversing the Interim Decision in Corus' absence. Defendant: There was no need for Corus to attend. It was the Claimant's application for a review, the proceedings are not adversarial and their purpose is not a hearing for the two sides to "pick holes" in each other's application. c) Failure to disclose documents in front of the members of the Review Panel Claimant: There were a number of documents in front of the Review Panel which were not made available to the Claimant: a briefing note prepared by Mr Schofield (479-486), Corus' application, the comparison documents prepared for and by Mr Wilson including the Licensing Recommendation Report (487-492, 499-500, 435-441 respectively), and Mr Wilson's written commentary on the letter from the Claimant dated 5th October 2005 asking for a Review hearing. (501-3). These placed the Claimant at a disadvantage because there were adverse matters contained therein which he had no opportunity to deal with. There were also irrelevant matters therein which were prejudicial to the Claimant. Defendant: There was no legal duty of disclosure. There was material which it was not appropriate to disclose, including documentation containing sensitive commercial information and the working documents of the Panel. The Claimant at no time prior to, during or subsequent to the Review hearing requested any further material than was provided, or gave any indication that it was unable to deal with any matters raised. The Claimant had sufficient information before and during the hearing to deal with the relevant matters to be addressed. Moreover, the Claimant was offered the opportunity to make further written submissions setting out its or its counsel's position. It chose not to do so. d) Failure to give the Claimant the opportunity to deal with issues of concern Claimant: The Defendant failed to put certain matters of concern to AML during the hearing, thus depriving Mr Williams of the opportunity of addressing them. The areas are i) Track Record; ii) Time Frames; iii) Production Targets. i) Track record The Decision Letter (189-191) concluded that: "The Panel notes that there are a number of companies with which you have been associated and which are involved in coal mining initiatives, which have failed to make tangible progress in carrying out mining operations, and this fact has raised concerns about AML's commitment to progress the Margam site". The following points are made: AML was not afforded a full and fair opportunity to comment on the issue. There is no mention of it in the Interim Decision (156-7); it was not raised prior to, or meaningfully at, the Review Hearing; the Claimant should have been told that the Panel found his explanation about the company Modal unsatisfactory. The suggestion by Mr Schofield that the Panel only took into account the failure by Modal to progress the Margam site is contradicted by the documentation which refers to "a number of companies" (See: Mr Schofield's Briefing note paragraph 3.6(iv) (485), the Licensing Recommendation report @ paragraph 4.5.9 (440) and Annex 1, (a list of companies and their track record, which were not shown nor put to AML. The list itself, it is said, contains serious inaccuracies). Defendant: The Claimant was offered an adequate opportunity to deal with the issue. The continuing doubts about the Claimant's commitment were based on the fluctuating price of coal, an important matter to take into account in the light of Mr William's explanation. Modal was, understandably, the most relevant of the Claimant's companies for the purposes of the review hearing. ii) Time Frames Claimant: In relation to Time Frames, the Decision Letter said this: "Corus put forward clear, tangible Time Frames for its proposal whereas AML has been less clear." This was an unfair and/or irrational conclusion for the Defendant to reach because a) the Claimant was not told that this might impact adversely on the application and b) it did not feature as a reason in the Interim Decision. Had this been raised, AML would have been able to submit a more detailed time frame immediately after the Review hearing. In any event the approach was perverse, as a genuinely meaningful timetable cannot be produced where the manner in which the venture would be taken forward is dependent on the results of exploration. Defendant: The application form at paragraph 2.6 clearly required the applicant to state the proposed date of commencement of operations or when the authorisation should come into effect and the proposed duration of the operations. Failure by the Claimant to set out even a Time Frame for exploratory works was a relevant factor to take into account. iii) Production Targets Claimant: The Authority concluded that "Corus has submitted realistic production targets, whereas AML has overly optimistic targets which, in the Panel's view, are unlikely to be achievable". The issue was not mentioned in the Interim Decision, nor was any advance notice given to AML to the effect that this was a matter of concern to the Authority. Mr Williams dealt with the issue at the hearing. The Panel did not indicate that it was dissatisfied with his explanation. Defendant: The matter was put to the Claimant. He was able to deal with it. Further written submissions could have been sent to the Panel following the hearing. The application form itself made it clear that a significant amount of technical information was required (paragraphs 4.5-4.20). The Defendant, on the basis of its expert knowledge, was entitled to entertain doubts about the Claimant's figures. e) Failure to take relevant matters into consideration in the decision making process Claimant: The Authority's conclusion on the issue of surface rights was "Corus already has surface rights at its existing site. By contrast, AML has not clearly specified the location(s) of the mine and, hence, there is no certainty regarding its ability to acquire surface rights". The Defendant failed to take into account the fact that the land which Corus had identified to provide mine access is adjacent to a site of specific scientific interest (SSSI). This raises a large question mark as to the deliverability of Corus' proposed scheme, given the likelihood of harm from a mine access operation. The Authority was unaware of the status of the adjacent land and it must have wrongly accorded Corus a higher degree of certainty than justified. An issue relating to the above is that of Planning Consents. The Authority's conclusion on that issue was: "Corus will find it easier to obtain planning consents on an existing industrial site". The same point is made as with the surface rights issue, namely that if the surface access strategy is incapable of implementation because of the likely damage to the SSSI, it will not get (or will not be able to implement) the planning permissions that are necessary. Thus, it will not matter whether the Corus site is brown-field and in existing industrial use. Defendant: The issues were explored with the Claimant at the hearing and the Panel's concerns put to him. There was no unfairness. Corus owned the land which it proposed to use for access, AML did not and could only point to an oral agreement to use land - land which it was agreed was not a preferred site. The Defendant's decision was not unreasonable in the circumstances. Corus proposed to access the coal from an area that is already in use for industrial purposes. The Claimant had a multi-site proposal based on an unspecified and possibly a green-field site. It was not unreasonable to conclude that Corus would have better prospects of getting planning permission. With regard to the SSSI, the Claimant made no reference to the existence of an SSSI at the hearing. The Claimant confuses site access with mine access. Coal extracted at Corus could be transported from the site by rail or sea without disturbing the adjacent land. f). Taking into account irrelevant and prejudicial matters without giving the Claimant the opportunity to deal with them A number of issues arise under this heading. They are points, save for the "ready market" point, which were raised for the first time in court. They do not feature in the skeleton argument or pleadings. They are: i) the Welsh Assembly; ii) "synergy"; iii) availability of ready market; iv) Greek shipping company; v) selling off to the highest bidder. i) The Welsh Assembly Claimant: Paragraph 4.5.6 (440) of the memorandum which was in front of the Panel, prepared by Simon Cooke, the Deputy Operations Manager of the Authority, summarising the comparative strengths and weaknesses of the two applications, reads as follows: "Corus is already part of the South Wales economy and any further development by them is likely to receive a favourable reaction both politically and locally. Officials at the Welsh Assembly are keen for Corus to proceed with the project." There is no explanation as to what weight has been attached to this. For the Panel to have read this is so prejudicial to the claimant's position that it vitiates the whole of the decision-making process. The fact that the panel had wholly prejudicial material in front of them means that they may or did take into account something they should not have done. Defendant: None of the points have been raised previously. They are not pleaded. Permission is needed to amend the grounds and to call evidence. No such application has been made. The effect of the submission is that the Authority did not give the real reasons for their decision. In light of the obvious allegation of bad faith, leave should be sought to cross-examine Mr Schofield on the allegations. No such application has been made. ii) The synergy point Claimant: Paragraph 4.5.7 of the memorandum reads: "Corus are the natural market for the coal produced as their Port Talbot steelworks plant is within the reserve area and a very large investment has recently taken place in new coke ovens. This would be the case whichever party operated the mine site. There is a natural synergy between the Corus steel operations and coking coal production." The author is saying that the synergy between coal and steel is determinative of the application, so that where there is a non-steel application, it is bound to fail. This was highly prejudicial to AML. Defendant: This is another allegation of bad faith and should be pleaded. The Claimant wrongly interprets the import of the observation. iii) The ready market Claimant: The Authority found that "Corus has an existing and ready market for the coal, in that it has a need for coking coal at its own Port Talbot site. AML's market is more speculative, although in practice it is also likely to sell coking coal to Corus and proposes to supply steam coals into the power generation sector." Although no particular criticism is aimed at the comments, it is hard to see how the comments afford any weight in support of a preference for Corus and thus it is irrelevant. Defendant: There is nothing in the point. Mr Schofield sets out the reasoning in his statement (455-6). It is a factor which gave greater weight to the Authority's conclusion that Corus would be keen to pursue its proposals. iv) Greek shipping company Claimant: Paragraph 4.5.8 of the memorandum reads: "Abbey's financial backing is of a speculative nature. A Greek shipping company registered in Liberia does not have the connection with a potential Welsh coal mine that a steel producer sited adjacent to the potential mine site has. It is likely that Abbey would wish the licence to be a paper asset to be sold on to the highest bidder (which could include Corus)". The comment about the Greek shipping company with no ties to Wales points to an irrelevant factor relating to finance being taken into account when awarding the lease to Corus. If there was a concern about the origin of the financing they should have raised it. Defendant: The point is misconceived. The findings in relation to finance were neutral, favouring neither party. This point was also not pleaded and should have been. v) Selling off to the highest bidder Claimant: The last sentence in paragraph 4.5.8 about the likelihood of AML selling off to the highest bidder is highly prejudicial. It was a material consideration which would influence the decision making. Although it is not an express reason, it was part of the underlying reasons, which should have been put to AML. Defendant: This was not pleaded. This also amounts to an allegation of bad faith. The Defendant should have a proper opportunity to deal with it. There is yet a further point made by the Claimant which was not in the skeleton argument, namely that the document entitled "The decision of the review panel" (505) contains more details for the reasons for the decision than the decision letter itself. This document, although written after the Review hearing, was not disclosed to the claimant and this omission goes to the issue of process. Defendant: This is wholly misconceived. It does not go to the fairness of the review hearing process and does not vitiate the decision sent to the Claimant. The decision letter was a fair summary of the point the panel relied on in upholding the decision of Mr Wilson. g). Error of law Claimant: Paragraph 7.8 of the decision of the panel (514) demonstrates that the authority has only focussed on one issue, namely section 2 duties, and has not looked at matters in the round, particularly its duty under Section 3(4) of the Act to secure the best terms reasonably available. The Claimant had offered a potentially higher financial return. The approach of the Authority was in error not to take that into account. Defendant: This point has not been pleaded and is not in the skeleton argument. It is quite clear from the decision letter that Section 3(4) was addressed specifically. Competition law issues h). The Authority's decision amounts to an anti-competitive agreement between undertakings contrary to Chapter I of the Competition Act 1998 and Article 81EC. Mr Justice Collins queried whether the competition point was amenable to Judicial Review. The Claimant submitted that it was. The defendant has not argued to the contrary. Accordingly, I approach the submissions on the basis that it is. (264) Claimant: There is no definition of the term "undertaking" in the EC Treaty, but the ECJ has held that it "encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way it is financed": see Hofner v Macrotron [1991] ECR I-1979, para 21; and SAT v Eurocontrol [1994] ECR I-43, paragraph 18. Section 7(3) of the CIA 94 transferred the ownership to the Authority of all the un-worked coal and coal mines which had previously been vested in the British Coal Corporation: Schofield, paragraph 5 (443). This made the Authority the owner of most of the coal in the UK. The Authority's functions include "holding, managing and disposing of interests and rights in or in relation to the un-worked coal and other property which is transferred to or otherwise acquired by it by or under this Act" (section 1(1)(a)) and "carrying out functions with respect to the licensing of coal-mining operations" (section 1(1)(b)). Section 3(1)(a) requires the Authority to have regard to the need to co-ordinate its practices in relation to relevant property dealings with its licensing functions under Part II. Further, where the Authority disposes of a property interest, its duty is to "secure the best terms reasonably available for the disposal": (section 3(4)). It is clear therefore from these matters that the Authority is in reality engaged in a commercial activity, namely the disposal of rights in un-worked UK coal (in particular) in return for royalties. The Authority is, or is little different from, a "revenue-producing monopoly". It is self-evident that the Authority's licence agreement with Corus will have an appreciable and adverse effect on competition in the relevant product markets in the UK and more widely because of the removal from the market of one significant customer (Corus) and the ability of Corus to supply itself with coking coal at below market price. This will give Corus an obvious competitive advantage as against other steel producers. Defendant: The claimant has failed to show any infringement of Article 81 because: a) the Defendant is not engaged in an economic activity for the purposes of EC and UK competition law, being a public authority acting pursuant to statute to regulate the exploitation of a scarce resource; b) even if the Defendant was so engaged, the Claimant has not performed the necessary market analysis required under Article 81 to demonstrate that the agreement would have a negative effect on prices, output, innovation or the variety or quality of goods that can be expected with a reasonable degree of probability; or that any such effect would be appreciable; c) it is not credible to contend that the licensing of the Margam site would have any appreciable impact on the world market, given that the market for coking coal is international. This was acknowledged by the claimant when asked at the Review hearing (250); d) the claimant has cited not a single case from the huge volume of UK, EC and US case law on competition, to support the proposition that vertical integration of an undertaking through the acquisition of a supplier has an adverse effect on competition. To the contrary, the agreement with Corus is likely to promote competition, and would have a positive effect on consumers of steel. i) The Authority's decision infringes the Defendant's duty under Section 2(2)(b) of the Coal Industry Act 1994. Under Section 2(2)(b) of the Coal Industry Act 1994, the Authority has a duty to "have regard to the desirability of securing … that competition is promoted between the different persons carrying on, or seeking to carry on, coal-mining operations". The manner in which the Authority addressed s2(2)(b) reveals two errors of law in that a) the grant of the licence to Corus will have an anti-competitive and adverse effect on the coal market and will not promote competition between coal-mining operations, and b) the Authority erred in law by wrongly regarding the duty in s2(2)(b) as a secondary duty, subservient to section 2(1)(a) (the requirement to carry out its duties in a manner that it considers best calculated to securing, so far as is practicable, the maintenance and development of an economically viable coal mining industry in Great Britain). This is apparent from Mr Schofield's memorandum: (Para 7.4 at 512) recording that "the Panel finds that its section 2(1) duties are paramount" i.e. over its s2(2)(b) duties. Defendant: The Authority had careful regard to its duty under section 2(2)(b). This can be seen from the decision letter and the statement of Mr Schofield. (paragraph 37 at 128). Regard was paid to the following factors: a) by advertising the licence, competition was promoted between different persons seeking to carry on coal mining operations; b) both the Claimant and Corus would be seeking to supply coal to power generators in competition with other existing sources of supply; c) there were already numerous suppliers of coal steam to the UK power generation industry should Corus decide not to produce coal steam, and thus the need to ensure competition between persons carrying on coal mining did not necessitate granting the licence to the claimant; d) as regards coking coal, Corus and the claimant were competing to mine coal in order to sell to the Corus steel works. Having considered its duty, it was entirely lawful and reasonable to award the licence to Corus. In any event, the priority to be accorded to the various duties under the Coal Industry Act 1994 did not arise as a material issue since the Defendant had regard to the matters under Section 2(2)(b) and concluded that it had no impact as between applications. j) The decision was a breach of Chapter II of the Competition Act and Article 82 EC (Abuse of dominant position) Claimant: Chapter II of the Competition Act 1998 prohibits conduct on the part of an "undertaking" which amounts to an abuse of a dominant position "if it may affect trade within the United Kingdom". Article 82 of the EC Treaty contains the equivalent provision as regards trade between Member States. Corus has over 50% of the UK steel market. Corus had a turnover of £9.3 billion in 2004: (paragraph 2.2.3 at 436). Corus has used its dominant position in the steel market to secure the licence. It was a fundamental part of Corus' application that its recent investment of £250m into its Port Talbot steel works provided a basis for their preference over AML. The Decision Letter relies (190) on precisely this point. Further, Corus used its market power to secure the licence at a lower price than that offered by its competitor AML. That being the case, the agreement is void: BRT v SABAM [1974] ECR 51. Moreover, the Authority, as a public body, cannot lawfully be party to Corus' breach of the Chapter II prohibition and/or Article 82. Defendant: In order to show the applicability of Article 82 and/or the Chapter II prohibition it is necessary to do the following: a) define the relevant market. The Claimant has failed to demonstrate that there is a UK steel market as opposed to an international market and that Corus has dominance; b) the assertion that Corus has over 50% of the UK market is not accepted. There is no evidence to support a finding of dominance in the market; c) investing in infrastructure is not abusive conduct; d) the burden is on the claimant: Article 3, Regulation 1/2003. There is no evidence of any abusive conduct by Corus. k) The decision amounts to State Aid contrary to Article 87 of the EC Treaty. Article 87 prohibits State Aid, the main elements of which are: (a) an advantage; (b) granted by a Member State or through State resources; (c) favouring certain undertakings or the production of certain goods; (d) distorting competition; and (e) affecting inter-State trade. The concept of "aid" is wide, going beyond mere subsidy, and comprising of any form of intervention or assistance which has the same or similar effects to a subsidy: see Steenkolenmijnen v High Authority [1961] ECR 1 and Amministrazione delle Finanze v Denkavit Italiana [1980] ECR 1205. Corus' bid was at a price which was lower than that offered by AML. This will enable Corus to produce steel at a considerably lower cost than its EU competitors. The effect of the Decision Letter is therefore to grant State aid to Corus. This should have been notified to the Commission for approval under Article 88(3), but has not been. Defendant: There is no question of subsidy to Corus. The existence of the licence was advertised, the competing applications assessed. Although AML's figure was hypothetically higher than Corus, the bid by Corus was considered to have a higher probability of being pursued and achieved and thus represented the best terms reasonably available, taking into account the royalty offered and the likelihood of payment eventuating; no complaint has been made to the EC Commission by the Claimant, as would be expected if illegal aid had been granted. Discussion and decisions Defective Process a) The Authority's defective notes and disclosure In this case, there is no regime laid down for disclosure in the context of the statutory framework, accordingly there is no statutory duty of disclosure. Whilst counsel for the Defendant may or may not be correct in stating that the Claimant has failed to point out any express or implied duty for the rules of natural justice to be applied to the tendering process in this case, nevertheless the guidance notes themselves at paragraph 11.7 impose a review procedure that is consistent with the requirement of fairness, and thus this is really the issue to be addressed. What constitutes fairness within the context of this case has to be determined. Fairness has to be considered first of all in the light of the statutory framework and the purpose of the Review and then more generally, to ascertain, in the light of what actually happened, whether the process was manifestly unfair. The Review presents the unlucky applicant with an opportunity to set out why the decision taken in relation to his application is unsustainable. It is clear from paragraph 11.9 of the Guidance notes (83) that the hearing is not an opportunity to introduce new material or restructure the application, nor, as Mr Schofield noted, is it adversarial. The Panel has to consider whether the decision reached by the DMPP is tenable in the light of the submissions made by the applicant and the DMPP. What does fairness demand in these circumstances? The reasons for rejection and the opportunity to deal with the reasons (whether in writing or orally) are the most important aspects. Does fairness require that disclosure of all matters be made, including disclosure of the Corus application, so that the Claimant can comment on them? In my judgement, given the function of the review hearing, it does not. The review hearing was not to enable the Claimant to comment on the Corus application but rather to deal with what were perceived to be the "shortcomings" of the Claimant's application. The important issue is that the Applicant is made aware of and has a proper opportunity to deal with the material issues of concern. In the absence of a specific duty, there is, in my view, no general duty or requirement for disclosure of all documents before the interim decision or prior to the hearing. I will deal with the non-disclosure of the documents which were before the Panel and the Claimant's opportunity to deal with matters of concern shortly. Reliance on the case of Agnello does not take the Claimants case any further because, as Mr Justice Collins rightly pointed out during the permission hearing, (304-5) this case fell into the second stage of the Agnello test. Counsel for the Claimant contends that it is still at stage one and that it does not fall into stage two until sufficient information has been given to the applicant so that it knows the facts upon which the comparative evaluation is to be made. However, on invitation by the court, counsel was unable to point to where stage two fell in the context of this case. It is to be noted that Agnello and similar cases were concerned with disclosure of matters adverse to the applicants of which they were unaware. The question of the need for disclosure and fairness need to be considered in that light. b) Failure to invite Corus to the Review hearing This point can be taken shortly. As indicated above, the proceedings are not adversarial and the purpose of the Review hearing is set out clearly. The Authority clearly has the power to send back an application to the Director for re-consideration and there is no reason why in appropriate cases it should not do so if the decision is found to be flawed. The submission that the absence of Corus would incline members against reversing the decision is without substance and it implies that the professional members of the panel, would be influenced by matters extraneous to the merits of the submissions made to them by the Claimant. This comes very close to an allegation of bad faith. c) Failure to disclose documents in front of the members of the Review Panel The briefing note prepared by Mr Schofield as a working document set out the principal terms of the applications, the decision of the Director and AML's grounds for seeking a review. It is a working document without comment and without bias. Also included were the applications of Corus and AML, the licensing report, and recommendations and a written commentary by Mr Wilson on AML's letter seeking a review. Although the application of Corus was part of the documentation, as Mr Wilson made clear during the hearing, "inferences" (sic) regarding the Corus application were inappropriate given that Corus and AML were competitors. In the light of those factors, it was appropriate for the Corus application not to be disclosed to AML. With regards to the licensing recommendation and the overall view of the two competing applications – these were working documents for internal use. They summarised the issues and the views as to the strengths and weaknesses of each application. Mr Wilson dealt with the material issues contained in the working documents during his submissions and during questioning. It was no secret that the applications were in front of the panel members, as reference was made to this by one of the members (253). No objection or point was taken, that AML were prejudiced by this fact, either at the time, after the hearing or in the pre-action letter (28). The matter was first raised in the amended statement of grounds. In my judgement, there was no requirement for those documents to be disclosed, as long as the Claimant was given an opportunity to deal with any matters, which had or may have had a material effect on the decision. In relation to one document however, it would, in my view, have been preferable if the commentary of Mr Wilson had been disclosed to the Claimant, prepared as it was for the hearing and dealing as it did with the application for the review, it being in essence Mr Wilson's defence of his decision (501). That said, in the light of the issues being dealt with during the course of the hearing, I take the view that AML was not prejudiced by the lack of disclosure of this document. No specific submissions were made about unfairness in relation to this document and its contents. The only point made was that in the document Mr Wilson explained that the interim decision letter to AML set out the essence but not the detail of the reasons. There is a further document of which complaint is made. It is a document headed: "Coal licences and coal methane agreements held by companies associated with Mr Williams" (486a). The document sets out factual information (without comment) about the history of the licences and agreements, information which would be within the personal knowledge of Mr Williams. Indeed details of the relevant companies were provided by AML in Section 3 of the application form. This section deals with information on associated companies, including companies with an interest in coal. It is not an unreasonable assumption that this information would be followed up. Counsel for the Claimant has asserted that the document contains many inaccuracies, but has failed to elaborate further. No prejudice has been shown regarding the lack of disclosure of that document. d) Failure to give the claimant the opportunity to deal with issues of concern i) Track record. Track record was not mentioned in the interim decision. Given the information required in the application form, there are bound to be checks on the viability and track record of the associated companies and persons involved. Mr Williams cannot have been in any doubt about that. Indeed, Dr Jones, during the hearing addressing Mr Williams, observed that track record plays a major part in planning mines. (248). Although the wording of the decision letter of 16th December (189) refers to companies in the plural, given Modal's lack of progress with the very same site as in the present application, it is obvious that the concerns of the Authority would focus more keenly on that site than the other sites and companies. Mr Williams was given an opportunity to deal with the lack of progress by Modal (250). The Panel was not obliged to tell him that they found his explanation unsatisfactory. His explanation that the low price of coal had affected progress, gave the panel legitimate cause for concern about Mr William's commitment to the site in light of future fluctuating prices of coal. The failure to ask questions about the other companies would not have affected the position so far as Modal's failure to progress the Margam site is concerned and is therefore not a material omission. In any event, on a close reading of the record of the hearing, Mr Williams was indeed asked about the associated companies listed in the application form. He was asked if they were still trading. He had the opportunity to deal with each company listed in the application form had he wished to avail himself of it. Whilst there were two or three companies which featured in Appendix 1 (486a) which did not feature in the application form, given the import of the question, Mr Williams could have told the panel about other relevant mining companies with which he had an association which were no longer trading should he have wished to do so. (247). The observation of Dr Jones (see above) afforded Mr Williams the opportunity to address the panel further on the track record of his companies had he wished to do so. ii) Time Frames The interim decision letter did not refer to time frames. Section 2.6 of the application form clearly required time frames to be filled in. The Claimant merely stated "As soon as possible". This issue was raised by Mr Wilson at the hearing, (244) but Mr Williams did not avail himself of the opportunity to deal with it. In relation to the alternative submission that to give weight to time frames was perverse since meaningful timetables cannot be produced - the Claimant cannot both complain that the company could have given a more detailed time frame after the hearing had the matter been raised, and at the same assert that time frames are meaningless. Given that the matter was raised at the hearing, there is no unfairness to AML. Moreover, given that there was a section dealing specifically with timeframes, it was not irrational to take this aspect into account. iii) Production Targets The interim decision letter did not refer to production targets. The application form made it clear that detailed technical information was required. The matter was put to Mr Williams and he gave his response (248). He did not seek to amplify his response by further written submissions after the hearing. The Panel was entitled to entertain doubts on the achievability of his figures in the light of their experience and did not have to indicate to Mr Williams what view they took of his response. e) Failure to take relevant matters into consideration in the decision making process The Claimant has provided no evidence whatsoever to show that the adjacent SSSI would affect the deliverability of Corus' proposed scheme. It is merely assertion. The issue of surface rights and site access were raised at the hearing and the Claimant had every opportunity to raise any doubts he entertained. He did not. The Authority was entitled to come to the conclusions it did, given, in particular, that AML did not have surface rights and thus no surface access strategy, whereas Corus had both. f) Taking into account irrelevant and prejudicial matters without giving the claimant the opportunity to deal with them. The points which follow were not, with one minor exception, raised either in the pleadings or the Claimant's skeleton argument. No application was made for permission to amend. For the sake of completeness, even in the absence of an application to amend, I deal with the points raised. i) The Welsh Assembly When Mr Griffiths stood up to address the court, he began by indicating that this case was one of great importance both for his client and for the people of Wales. When asked whether the Claimant expected the court to find in its favour because of that fact, Counsel conceded that it was irrelevant and something which the court could not take into consideration. It is therefore difficult to see how it can be submitted that a panel of experienced members of the Authority appointed under statute were swayed by the fact that Corus would be a popular choice. Mr Griffiths denies that an allegation of bad faith has been made or is to be inferred, suggesting that the members could have been influenced subconsciously. A document with further submissions dated 30th April has been received very recently from Mr Griffiths. The document shows that there were eleven meetings in 2004 and 2005 in which representatives of the Welsh Assembly met and discussed the Margam site. There was a Corus representative at seven of the meetings and on one occasion a representative of the Coal Authority. This, it is submitted lends "considerable additional credence… to the submission that the Authority's decision which is impugned in this case was infected by the (legally irrelevant) factors referred to at paragraph 4.5.6" I reject the submission for the following reasons. A close reading of the notes of hearing (240 et seq.) and the record of the decision of the panel (505 et seq.), reveals that the Panel came to its decision based on the matters aired at the hearing. It is interesting to note that Mr Williams himself referred to the Welsh Assembly twice during the hearing; one referring to the favoured site being Corus or British Oxygen in relation to entry to the mine and a further reference later on (249). He was well aware of the rumours of Corus being the favoured/successful bidder as he himself drew the attention of Mr Wilson to an article in the Guardian newspaper and a piece on BBC Radio Wales to that effect in an email dated 23rd August 2005 (143). Further, paragraph 4.5.6 (the Welsh Assembly point) was only one of ten reasons put forward in the recommending report under the issue of "achievability and best terms reasonably available". It did not feature in the reasoning of the panel. The details of the eleven meetings alluded to, show that six of them are before 2nd November. The suggestion of subconscious influence/bias is at odds with Mr Wilson writing to AML on 2nd November inviting them to apply for the Margam licence. (Wilson 387-9) There was no letter to Corus inviting application, but in accordance with the Guidance notes, an advert was posted. The submission also does not sit comfortably with Mr Wilson's encouraging a joint enterprise between the competing applicants, an initiative which came to nought because AML was not prepared to have Corus as the licence holder (252). The details of the discussions are unknown. Even though the Coal Authority was present at a meeting just before the interim decision was made, and was quite likely to have been the source of the observation in paragraph 4.5.6, the fact of the meetings themselves does nothing to further support the submission already made. The letter from the Defendant's solicitors dated 4th May 2007 received by the court on 10th May, confirms that the observation in paragraph 4.5.6 was as a result of the meeting on 31st August. None of the Panel members attended the meeting with the Welsh Assembly. ii) The synergy point This point can be taken quite shortly. It is not possible to draw the inferences contended for by the Claimant on a proper reading of the extract. The meaning is clear. It does not say or mean that only steel producers will get the licence. iii) The ready market This point was pleaded but with some diffidence. The observations were perfectly justified in the light of AML's information about its potential market. These were matters which could properly be taken into account. iv) Greek shipping company The point of the Review was in order to raise points which were material to the decision. The findings in relation to finance, despite the observations made, were neutral. There was no need for this to be raised, and the Claimant has suffered no prejudice. v) Selling off to the highest bidder There is no evidence at all either in the notes of hearing or indeed during the decision making process (505-514) that the comment about selling off to the highest bidder was part of the underlying reasons for rejecting the AML claim. The report of the panel setting out its decision and the reasons for it dealt solely with what had been discussed during the review hearing and nothing more. The related point that the decision of the authority was more detailed than that of the decision letter is totally without merit. No prejudice to the Claimant has been or can be shown in relation to the Review process which took place before this document was written. g) Error of law – failing to take into account the duty under Section 3(4) of the Act This point can also be taken quite shortly. It is apparent both from the notes of the decision of the Review Panel and the decision letter itself that proper consideration was given to all relevant matters including the duty under section 3(4). (191/514). In light of AML's more speculative proposals, the Authority was entitled to reach the conclusion that it did. Competition law issues h) The Chapter I argument. The anti-competitive agreement. The Authority is not, in my judgment, an undertaking. I come to that view for the following reasons: a) The Coal Authority is a public authority acting pursuant to statute; b) looking at the powers and duties of the Authority and purpose of the Authority under statute, they are in keeping with powers typically to be exercised by public authorities; c) it is acting to regulate the exploitation of a scarce resource. In this respect, it is similar to an air traffic control agency regulating access to the air space over Europe, or a communications regulator regulating access to the radio-spectrum; d) the Coal Authority is not in competition with any other body. By Section 5(6) of the Act, the Authority is precluded from mining coal; e) by Section 5(7) of the Act, the Authority is precluded from acquiring land and other property without the permission of the Secretary of State and the consent of the Treasury; f) under section 25 of the Act, there can be no mining of coal without a licence from the Authority, this applies even in respect of coal which the Authority does not own. Section 31 gives the Authority powers of enforcement in respect of breach of Section 25; g) Paragraph 9 of the judgement in the case of SAT v. Eurocontrol [1994] ECR I-43, said this: "…. It is apparent that the essential factor in classifying a body as an undertaking is the pursuit of an economic activity capable of being carried on, at least in principle, by a private undertaking with a view to profit". It is clear from the powers and regulatory duties of the authority that the activity is not capable of being carried out either in principle or practice by a private undertaking with a view to profit; h) save for a retention of a modest proportion of the royalties from the licences as a contribution towards administrative costs, the revenue generated is remitted to central funds. In my judgement the Authority is a public authority disposing of public assets having regard to commercial considerations. That being the case, it is not an undertaking and not subject to Article 81. If the above reasoning were wrong and the Coal Authority were an undertaking, I would turn to consider whether the Claimant has discharged the burden of showing that the agreement would have a negative effect on prices, output, innovation or the variety or quality of goods that can be expected with a reasonable degree of probability, or whether any such effect would be appreciable. The Claimant has not, in my view, discharged the burden. There has been no market analysis carried out to demonstrate the necessary negative effect, and no evidence has been adduced to support the proposition that vertical integration of an undertaking through the acquisition of a supplier has an adverse effect on competition. There has been mere assertion without any supporting evidence. i) The Authority's decision infringes the defendant's duty under Section 2(2)(b) of the Coal Industry Act 1994. This ground fails for the reasons given by the defendant. (See para 58 above). The Section 2(1) duty favoured Corus on deliverability and the Section 2(2)(b) duty was neutral as between the parties, see: decision letter (191). There was therefore no conflict between the two duties. j) Abuse of dominant position. The Claimant has failed to discharge the burden of showing breach of Chapter II and/or Article 82 for the following reasons: a) the "relevant market" has not been defined and b) no cogent evidence has been presented to show that Corus has dominance of the relevant market. It is clear from the EC Commission Decision in case No COMP/M.4137 Mittal/Arcelor of 2nd June 2006, a decision which involved the largest steel producer in the world and the largest European and second largest steel producer worldwide, that the steel market is complex. The Commission distinguished four broad categories of finished steel products with sub-categories. The markets are different for each. In 2004-5, Corus's share in the various markets, save for two particular areas, is a figure between 5-15%. In relation to metallic-coated steel for packaging and organic-coated steel, it is a figure between 15-25% of the market. These figures go nowhere near supporting the contention put forward by the Claimant. It does not show dominance in the international market and there is no analysis of the UK market. Given this, there is no evidence of abuse of dominant position and the allegation that Corus used it dominant position in the market to secure the licence at a lower price than its competitor falls away. k) State Aid There is no question of State Aid in this case. It is not surprising that Mr Justice Collins was unimpressed by the argument. Mr Griffiths conceded that it was not the strongest of points and was one which he could delete in his amendments (315). Regrettably, he did not. The Coal Authority took an overall view and chose the bid offering the best terms in relation to deliverability. Best terms does not necessarily mean best price, and I find that there is no question of subsidy. Conclusions Having dealt with the individual submissions, I now stand back and look at the cumulative effect of the submissions to see if this reveals: a) unfairness in the process overall and whether, in all the circumstances, the decision of the Authority could be said to be unlawful, perverse, irrational or unreasonable. Whilst it is true that the reasons given in the interim decision letter were short and that three issues in particular were not raised until the hearing, as indicated by Counsel for the Claimant, Mr Williams nevertheless went to the review hearing confident that he could deal with any issue which arose. Looking at the notes of the hearing, it is clear that Mr Williams was perfectly able clearly to convey the issues which he, with the benefit of advice from Leading Counsel, had identified as being relevant. Moreover, as indicated by Mr Schofield, the opportunity for written submissions had been offered. That opportunity was not pursued. On a close reading of the notes of the review hearing, all relevant issues were canvassed during that hearing. Mr Wilson was questioned very closely about the process he had employed in relation to the applications, and this included the Authority's approach to its duties, how Mr Wilson had reached his conclusions on the different issues, and the competition and other issues raised by Mr Williams (250 et seq.). Whilst the details of the Corus application were not made available to AML, Mr Wilson did explain why Corus fared better in the various aspects of the bid. Mr Williams was given a full opportunity to develop his arguments and objections. During the course of the hearing Mr Williams indicated that he was happy that the Director of Mining knew all the facts. Further, he e-mailed Mr Wilson after the review hearing (cc Mr Schofield) to thank him for the very professional manner with which he had conducted himself during the review hearing (188). It is strange, given the manifold criticisms that are made about non-disclosure, that the lawyers advising AML did not raise these matters prior to the Review hearing. It is not clear who the solicitors were at the time, as all correspondence came from AML. However in the correspondence, AML referred to having taken advice from Leading Counsel (465) and during the course of the review hearing Mr Williams quoted from the advice of Leading Counsel (246). Indeed it had been envisaged initially that Leading Counsel would attend the Review hearing. On enquiry by this court, it is clear that no requests were made by AML, either themselves or through their legal representatives, for the material which the Claimant now submits should have been made available to AML in advance of the review hearing. As noted earlier, the document containing the decision of the Review panel (505-514) shows that the panel went through all the relevant issues raised during the hearing. The irrelevant issues referred to by the Claimant did not feature in its reasoning. Moreover, it is to be noted that Mr Wilson made it clear that AML had crossed the eligibility threshold and would have been granted the licence had Corus not had a better proposal (251). Mr Wilson also emphasised during the hearing that the Authority had a "good interaction" with Mr Williams. This was endorsed by Mr Williams himself (253). Further, in the interim decision letter, availability of finance had been given as one of the reasons for preferring the Corus application. In the decision letter, finance was neutral, in other words the Panel had rejected one of the reasons originally given for finding against AML. This evidence sits somewhat uneasily with the Claimant's submissions of conscious or sub-conscious bias arising from the presence of irrelevant material in front of the panel. My conclusions in relation to the questions raised in paragraph 94 are in the negative. This Review process was in its infancy, this case being the first under the Authority's procedures. There is clearly room for fine-tuning of the process and no doubt the Authority will wish to do so in light of this experience. However, what actually transpired in this case cannot, in my judgement, be said to have been unfair in any sense of the word, public law or otherwise. The Claimant had the opportunity both before (in relation to the issues raised in the interim decision letter) and after the hearing (in relation to all matters raised at the hearing) to deal with the material matters. The decision made followed a clearly definable line of reasoning based on the issues raised during the hearing, including matters of law. The conclusions are sustainable. There are no grounds for finding that the decision was unlawful, perverse, irrational or unreasonable. It follows therefore that this application for judicial review is refused.

CIVIL APPELLATE JURISDICTION Civil Appeal No. 455/59. Appeal by special leave from the judgment and order dated January 16, 1956, of the former Nagpur High Court, in Misc. Petition No. 448 of 1954. S. Bindra and D. Gupta, for the appellants. Purshottam Trikamdas, G. J. Ghate and Naunit Lal, for the respondents. 1962. April 6. The Judgment of the Court was delivered by MUDHOLKAR, J.-The respondent was a proprietor of mauza Bhivapur, Tehsil Umerer, District Nagpur. His proprietary interest in the village was abolished by the Madhya Pradesh Abolition of Proprietary Rights Estates, Mahals, Alienated Lands Act, 1950 M.P. 1 of 1951 . By virtue of s. 4 of the Act, ill rights, titles and interests, among others, in all pathways, village sites, hats, bazars and melas in Bhivapur vested in the State of Madhya Pradesh for the purposes of the State free from all encumbrances under s. 4 1 a of the Act. Under the provisions of the States Re-organisation Act, 1956 those rights vested in the State of Bombay and number by virtue of Bombay Re-Organisation Act, 1960 11 of 1960 in the State of Maharashtra. The provisions of s. 4 1 a are as follows- All rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land cultivable or barren grass-land, scrub jungle, forest, trees, fisheries, wells, tanks, ponds, waterchannels, ferries, pathways, village sites, hats, bazars and melas shall cease and be vested in the State for purposes of the State free of all encumbrances and the mortgage debt or charge or any proprietary right shall be a charge on the amount of companypensation payable for such proprietary right to the proprietor under the provisions if this Act After the Act came into operation proceedings for companypensation in respect of the village Bhivapur were started in the companyrt of the Compensation Officer, Umrer, in Revenue case No. 583/1-A-4/1950-51 decided on January 19, 1952. The Compensation Officer held that 0. 14 acres of land out of Khasra No. 61/1 which is recorded in the village papers as abadi wherein a bazar is held, should be settled with the respondent under s. 5 a . On a portion of the land which was used for bazar, ottas and chabutras, with or without sheds, and separated by passages, exist. It is companymon ground that they belong to the respondent. It is also companymon ground that the land companyered by ottas and chabutras on which sheds have been companystructed were ordered to be settled on the respondent in the revenue case referred to above. The respondents companytention, however, was that number only the sheds and the land on which those sheds were erected but also the open uncovered ottas and chabutras should also have been settled with him by virtue of the provisions of s. 5 a of the Act along with the land appurtenant to those structures. The total area of this land, according to him, is 2.85 acres. The respondent, therefore, preferred an appeal against the order of the Compensation Officer which directed settling only 0.14 acres of land on him. That appeal was. however, dismissed by the Additional Commissioner of Land Reforms and Additional Commissioner of Settlement, Madhya Pradesh, on March 28, 1952. The respondent thereafter was asked to remove his ottas and chabutras. Even so, the matter of settling land companyered. by ottas and chabutras on the expropriators was being companysidered by Government. On May 16, 1952, a press numbere was issued by the Directorate of Information and Publicity, Government, of Madhya Pradesh the material portion of which runs thus The Government companysider that the option given to expropriators to remove the material etc., might cause hardship to them in such cases. Government have, therefore, decided on the following lines of action in such matters where the ottas and chabutras were, companystructed in brick and stone, they should be allowed to remain with the exproprietors and the land thereunder should be settled with them under section 5 a of the Madhya Pradesh Abolition of Proprietary Rights Act, 1950 1 of 1951 on terms and companyditions determined by the Government and where the ottas and chabutras are in mud, the land Under them should be deemed to have vested in the State Government. But after this press numbere was issued the Government, apparently on the advice of its law officers, issued instructions to the Deputy Commissioners on June 22, 1954, to give one months numberice all ex-proprietors to remove the materials, clear the site of ottas and chabutras other than those on which there were sheds. In pursuance of this, a numberice was issued to the respondent on July 13, 1954. Feeling aggrieved by this, the respondent preferred a petition under Art. 226 of the Constitution before the High Court of Nagpur for issue of a writ of mandamus or certiorari or other appropriate to writ to quash the orders passed by the Commpensation Officer and the appellate authority as well as the order of the State Government of Madhya Pradesh dated June 22, 1954, and the numberice issued in pursuance thereto on July 13, 1954. The High Court allowed the petition and set aside the impugned orders and directed the State Government to settle the on tire area of Khasra No. 61 /1 of Bhivapur with the respondent on such terms and companyditions as may be determined by it. It may be mentioned that the entire area of Khasra No. 61/1 is 12.85 acres or so. The State of Madhya Pradesh sought a certificate from the High Court under Art. 133 1 c of the Constitution. But the certificate was number granted. Thereupon a special leave petition was made before this Court under Art. 136 of the Constitution. Leave was granted by this Court by its order dated March 18, 1957. That is how the appeal has companye up before us. It may be mentioned that the High Court granted the petition of the respondent on the view that ottas and chabutras etc., are buildings within the meaning of s. 5 a of the Act and that companysequently the State Government was bound to settle the land companyered by them with ex-proprietors along with land appurtenant to those structures. In the application made before the High Court for grant of certificate, the following three grounds were raised For that the total market area as claimed by the number-applicant being only 2.85 the entire abadi area of 12.85 acres in Khasra No. 61/1 companyld number be granted and settled with the ex-proprietor. For that the ottas and chabutras in the bazar area companyld number be held to be buildings companytemplated under section 5 1 a read with section 4 1 a of the Act 1 of 1941 and companyld number be settled with the ex-proprietor under the law. For that the buildings envisaged in the provisions 5 1 a are those buildings which are situated in the abadi and number those standing in bazars even though the bazar may also be located in the abadi and that ottas and chabutras etc., in the bazar being an integral part thereof are clearly different from those other buildings used for agricultural or domestic purposes. It would, however, appear from para. 2 of the order of the High Court refusing certificate that the learned Advocate- General for the State did number challenge the companyrectness of the meaning given by the High Court to the word buildings in s. 5 a of the Act. But the companytention he pressed was that the words ottas and chabutras must be restricted to structures standing on the abadi of the village excluding that on which bazar was held, which under s. 4 1 a vests in the State. Before us however, Mr. Bindra reiterated the companytention which was originally pressed in the High Court that ottas and chabutras cannot be regarded as buildings within the meaning of that word in s. 5 a of the Act. According to him the companycession made by the learned Advocate-General was on a question of law and the State is entitled to withdraw that companycession. In our opinion the question whether ottas and chabutras fall within the term buildings is number purely one of law and the State is number entitled to withdraw that companycession. It would also appear from grounds 5 and 6 in the special leave petition that what was really sought to be urged before this Court was the companytention actually pressed by the learned Advocate-General in support of the application for grant of certificate. All the same we allowed Mr. Bindra to urge the companytention that ottas and chabutras are number included in the term buildings in s. 5 a of the Act. The relevant portion of s. 5 a of the Act reads thus Subject to the provisions in sections 47 and 63 all open enclosures used for agricultural of domestic purposes and in companytinuous possession for twelve years immediately before 1948-49 all open house-sites purchased for companysideration all buildings within the limits of a village site belonging to or held by the out going proprietor or any other person, shall companytinue to belong to or be held by such proprietor or other person as the case may be and the land thereof with the areas appurtenant thereto shall be settled with him by the State Government on such terms and companyditions as it may determine Village site means the abadi in an estate or a mahal. Section 5 a is an exception to s. 4 1 a of the Act. No. doubt, s. 4 1 a provides for the vesting in the State of the land on which bazar is held. But reading that section along with s. 5 a it is clear that where any buildings belonging to the proprietor exist on any portion of the abadi land that land, together with the land appurtenant to those buildings, bad to be settled with the ex-proprietor. Land on which the bazar is held is part of the village abadi land and, therefore, all buildings standing on such land would fall within s. 5 a of the Act and would have to be settled with the ex-proprietor. The only question, therefore, is whether ottas and chabutras can be regarded as buildings. A perusal of that provision would show that where the ex-proprietor has spent money on companystructing something within the limits of the village sites, that thing had to be settled with him. The word buildings should, therefore, be given its literal meaning as something which is built. Mr. Bindras companytention, however, is that for a structure to be regarded as a building, it should have walls and a roof and in support of this companytention lie relied upon the decision in Moir v. Williams 1 In that case Lord Esher has observed that the term building generally means all 1 1892 1 Q.B. 217. enclosures of brick and stone companyered by a roof. But he has also made it clear that the meaning to be given to that word must depend upon the enactment in which the word is used and the companytext in which it is used. There, what was being companysidered was the provisions of the Metropolitan Buildings Act, 1855 10 19 Vict. c. 122 which dealt with residential houses. He also relied upon the decision in Morrison v. Commissioners of Inland Revenne 1 . That was a case under the Finance 1909-10 Act, 1910 10 Miw. 7 c. 8 . The observations on which he relied are as follows It is quite clear that the expression buildings does number mean everything that can by any means be described as built it means buildings in a more narrow sense than structures, because there are other structures of a limited class which under the terms of the sub-section may also be taken into companysideration. Far from these observations helping him they clearly show that the natural or ordinary meaning to be given to the word Buildings, is something which has been built. That meaning would be modified if the provisions of law justify giving some other meaning. Finally he relied upon the decision in Samuel Small v. Parkway Auto Supplies 2 . The observations relied on by him are as follows The word building in its ordinary sense denotes a structure or edifice including a. space within its walls and usually companyered with a roof, such as a house, a church, a shop, a barn or a shed. The word building cannot be held to include every Species of erection on land, such as fences, gates or other like structures. Taken 1 1915 I K. B. 176 at 722. 2 49 A.I.R. 1361 at 1363. in its broadest sense, it can mean only an erection intended for use and occupation asa habitation or for some purpose of trade, manufacture, ornament or use, companystituting a fabric or edifice, such as a house, a store, a church, a shed These observations must Be companysidered in the companytext of the Act which was being companystrued and in the companytext in which they were made. There the Court bad to companysider whether erection of gasoline pumps and companystruction of under ground gasoline tanks and pits with companycrete sides sunken in the ground are within a restrictive companyenant that numberbuilding of any kind shall be erected or maintained within a certain distance of a street. In the particular companytext buildings had, according to the Court, to be given its popular meaning. That case, therefore, does number assist the appellants. In our opinion the High Court was quite right in holding that even uncovered ottas and chabutras fall within the term building as used in s. 5 a of the Act and, therefore, along with the land appurtenant to them they must be settled with the respondent. Mr. Bindra pointed out that the High Court was in error in asking the Government to settle the whole of Khasra No.61/1 on the respondent because whereas its area is 12.85 acres, the land companyered by the structures, including the appurtenant land, does number measure more than 2.85 acres. Mr. Purushottam Trikamdas, learned companynsel for the respondent readily companyceded this fact and said that the High Court has companymitted an error through an oversight and that all that the respondent wants is 2.85 acres of land and numberhing more. Mr. Bindra then said that it would number be proper to give a direction to the Government to settle any particular area of the land and it should be left to the revenue authorities to determine the precise area companyered by the structures and the passages separating these various structures. We agree with him. It would be sufficient to direct the Government to settle with the respondent the whole of the land companyered by the structures as well as land appurtenant to those structures from out of Khasra No. 61/1. What the area of that land would be is a matter to be determined during the settlement proceedings.

LORD JUSTICE WARD: This is an unhappy situation. Mr and Mrs Sawden appear today in person. Mr Sawden has never had the benefit of legal representation, though he has had help from his McKenzie friend. Mrs Sawden was until very recently represented by solicitor and counsel, but has simply run out of money and cannot afford their services any longer. They appear today on a renewed application made by Mr Sawden for permission to appeal against the order made by HHJ Meston QC on 18th June 2003 year, when he effectively dismissed the husband's appeal from the order made by Deputy District Judge Haig-Haddow on 25th March 2003, save in one minor respect. The matter came before Thorpe LJ who directed it be restored before the court to consider the application for permission and, if need be, to deal with the appeal thereafter. The order under appeal is an order made on the ancillary relief applications which were first heard by the Deputy District Judge. He ordered that a Standard Life policy, which then had a surrender value of just under £6,000, should be surrendered, or if Mrs Sawden chose to pay out Mr Sawden she should do so, but he wished Mr Sawden to get a half of the value of that policy. The second important order was that Mr Sawden should transfer his interest in the matrimonial home to Mrs Sawden subject to the mortgage, but subject then to a charge, the effect of which would be to give Mr Sawden 45 per cent of the equity in that property, and the remaining 55 per cent to go to the wife. But that charge would be realised on Mrs Sawden's remarriage or her cohabitation; in the event of the home being sold at her request; on the sad event of her death; or on her ceasing to occupy the property for six months. She was given liberty to roll-over the charge on one further property if she was going to occupy it as her principal residence. On the husband's appeal to HHJ Meston QC, the learned judge upheld that order, save with regard to the working out of the roll-over provisions. The judge added a term that the percentage of the charge on the second property should be to an equivalent value of 45 per cent of the equity of the former matrimonial home, and would be enforceable on the same terms as related to the matrimonial home. Before us to today, the points at issue between the parties have been narrowed considerably. Mr Sawden no longer challenges the essential allocation of the net proceeds of the eventual sale of the matrimonial home as to 45 per cent to him and as to 55 per cent to Mrs Sawden. That order was made by the Deputy District Judge recognising that after the parties' separation in 1996 the house has been maintained by the hard efforts of Mrs Sawden, who had to train to become a secretary, and who has taken up employment as a secretary, and thus keep up the mortgage payments on the property and provide a home for the two children of the family: Luke, who is 28, and Leah, who is 21. So, in the light of the fact that, unhappily, Mr Sawden suffers serious ill-health and cannot work, the extra contribution made by Mrs Sawden justified, in the view of both judges, her getting a greater than 50 per cent share of the equity. I am bound to say that it would have been highly unlikely that an appeal against that discretionary exercise would ever have been successful. So the points at issue today relate first to the roll-over provision, and secondly to the fact that no provision has been made in this order as to what should happen when the children leave home. Mr Sawden contends that the roll over works unfairly because if Mrs Sawden were to exercise that option and trade down, thereby releasing some surplus capital, he should have his 45 per cent of that surplus. It is not a point that I think Mrs Sawden had carefully thought about, probably for the fairly obvious reason that in her present circumstances, where her home is close to her job and close to her family, the likelihood of her wishing to move is, as a matter of reality, pretty remote. But it remains a theoretical possibility that she could do so. And when the point is put to her, she saw the force of it and was immediately inclined to agree that in the unlikely event of her selling and realising surplus capital she should pay out 45 per cent of that surplus to Mr Sawden. The second point urged upon us by Mr Sawden is that it is unfair that he will not realistically ever be able to enjoy the fruits of his share in this home, to which, during the 25 years that the couple lived together, he made his contribution. He is now 58 years of age and in ill-health. Mrs Sawden is 52, and although she has suffered from depression, as many years of litigation have taken their toll upon her, she is otherwise, one hopes, in reasonable health and certainly fit to work. The position of the children is that Luke is a carpenter who has recently established his own business, but is financially committed to making a success of that venture, and so he lives at home, no doubt contributing to the general expenses, and certainly, as we have been told today, doing good works in helping mother improve the property, all of which will, as to 45 per cent of it, accrue to the benefit of his father, and I hope his father will be grateful for the efforts he has made in the home. Leah is a nursery schoolteacher, who is at work but stills lives at home. Who knows what the children are going to do, though I dare say their parents hope that they will find happiness in marrying or settling down with a partner, and I dare say in the fullness of time producing grandchildren for grandma, particularly, as well as I dare say for grandfather. But that may be some years away. I have to remind myself that this is technically a second appeal. Consequently, to get permission to appeal Mr Sawden has to establish that there is some important point of practice or principle at stake, or some other compelling reason as to why the Court of Appeal should grant a third hearing when two judges have carefully looked at it and given judgments which are commendable. I fancy that Mr Sawden would struggle to point to any point of practice or principle, especially relating to the two matters at issue at the moment. But in an exercise which involves being fair as between husband and wife, and doing justice between them, if there appears to be the possibility of an unfairness or injustice then, for my part, I would strain the rules and find that correcting that injustice is a compelling reason why the Court of Appeal should interfere. Is that the case here? In the light of Mrs Sawden's commendable acceptance that if she trades down and there is a surplus she would share the surplus, that matter can be corrected and should be corrected to reflect that sensible concession, which I hope will be gratefully accepted by Mr Sawden. It may not do him much good because he is on income support and any capital above £8,000 will mean the end of his income support, but he is entitled to say, 'A little extra money would enable me to buy some luxuries which I do not enjoy at the moment', and for my part I would give permission on that narrow ground and vary the order, noting that it is done by consent. As to the position of the children, Mrs Sawden makes a powerful point that this home has been her home and the family home for many years now. Since the separation in 1996 she has struggled to maintain it for the benefit of the family. She is struggling now to maintain it for everybody's benefit. It is near work and it is near her family, and with £77,500, or thereabouts, that would be realised to her were the property to be sold at the value it held at the time of the hearings below, and with her half of the policy, she would not be in a financial position to afford any great comfort in the vicinity in which she lives. She makes the emotional point that she would like to stay where she is. For my part, I see the force of that, and it is a point that attracts considerable sympathy. But we have to look at the other side of the argument as well. The other side is that Mr Sawden on the order as presently framed will not receive his money unless Mrs Sawden remarries, of which there is no hint or suggestion, or choses to sell, which again seems unlikely, given her fondness for the home. The best test of judging the fairness of these arguments is to ask oneself: what order would the court have made had the case been heard when Luke and Leah had already left home? Would the argument, 'I am deeply attached to my home', the argument advanced by Mrs Sawden, prevail over, 'I deserve to get my share of the capital out of a house to which I have made my contribution', advanced by Mr Sawden. I am bound to say that it seems to me overwhelmingly likely that the court in those circumstances would, in order to do fairness to husband and wife, have to say, sadly, 'The property has to be sold. You, Mrs Sawden, will realise enough out of it to buy some home, though not as nice a home as the one you enjoy, but you will be able to have a roof over your head, and Mr Sawden, with difficulty, might have a roof over his head.' Mrs Sawden does have at present a mortgage ability of raising £30,000, though that would diminish as time passes, and as her working life draws to its inevitable conclusion. In my view, the justice here is on the husband's side. I think there is a compelling reason why we should give him permission and, having given that permission, direct that another trigger be made in this order, namely that the charge be realised in the event that both children leave home and settle independently in homes of their own. So, recognising the difficulties of both parents and husband and wife, I would allow the appeal to those limited extents. LORD JUSTICE MAY: This is an application which, as my Lord, Ward LJ, has said is to bring a second appeal, to which Rule 52.13 of the Civil Procedure Rules applies. That places restrictions on this court giving permission for such an appeal. I agree with my Lord, Ward LJ, that Mr Sawden struggles to satisfy the requirement of that Rule, but I also agree that, stretching a point, there is a compelling reason for the court to hear the appeal. For my part, that compelling reason lies in the fact that, looked at in the round, the present order would make it a real likelihood that Mr Sawden would never have the benefit of the equity in the property which the order accords to him. For that reason, I too would give permission to appeal and, having done so, I agree with the reasoning of my Lord, Ward LJ, and the order which he proposes. LORD JUSTICE JONATHAN PARKER: I also agree that this is an appropriate case for a second appeal within the terms of rule 52.13 of the Civil Procedure Rules. I further agree that, for the reasons which my Lord, Ward LJ, has given, with the order which he proposes. (ORDER: Appeal allowed. No order as to costs. Any surplus on a trade down to be split 55:45 either way; to be triggered when the children leave home and settle independently then the house must be sold, unless Mrs Sawden can buy Mr Sawden out.)

COURT OF APPEAL FOR ONTARIO CITATION: Qaraan v. Qaraan, 2014 ONCA 401 DATE: 20140515 DOCKET: C56483 Doherty, Epstein and Benotto JJ.A. BETWEEN Amneh Qaraan Applicant (Respondent) and Abdelaziz Qaraan (also known as Aziz Qaraan) Respondent (Appellant) Norman A. Pizzale, for the appellant Monique Rae Bennett, for the respondent Heard: May 12, 2014 On appeal from the order of Justice Victor Mitrow of the Superior Court of Justice, dated December 13, 2012, with reasons reported at 2012 ONSC 6017, [2012] O.J. No. 5938. ENDORSEMENT [1] The appellant appeals the trial judge’s findings that: 1. Disallowed a deduction for property in Al Taibeh, Jordan owned at the date of marriage; 2. Fixed the value of date of marriage investments at $75,000 instead of the $215,000 claimed by the appellant; 3. Imputed income to the appellant for child support and made orders pursuant to the Child Support Guidelines, SOR//97-175 including an order for the oldest child, Fatima, who was born in 1992; 4. Awarded the respondent spousal support. [2] For the reasons that follow, the appeal is dismissed. BRIEF BACKGROUND [3] The parties were married on September 27, 1990, and separated on February 28, 2007.  The parties have three children who were ages 20, 19 and 7 at the time of trial. [4] The appellant’s income was derived from ownership and rental of apartment buildings.  Some of these buildings were owned by the appellant’s corporation, however, all rental income from apartments owned by the corporation was treated as the appellant’s personal income.  Likewise, sales of apartments owned by the corporation were reported on the appellant’s personal income tax returns. [5] During the marriage, the respondent did not work outside of the home. THE APPEAL Date of Marriage Deductions: [6] Section 4(3) of the Family Law Act R.S.O. 1990, CHAPTER F. 3, provides that the onus of proving a deduction under the definition of “net family property” rests with the person claiming it.  The trial judge did not accept the appellant’s evidence with respect to either the property in Jordan or the value of the investments.  He allowed no deduction for the former and reduced the amount claimed for the latter. [7] The appellant testified that an approximate 28 percent interest in the Jordan property had been given to him by his grandmother prior to the date of marriage. He did not produce evidence to corroborate what percentage of the land was owned by him at the date of marriage and did not obtain a proper valuation of the property.  Absent documentation or corroboration, the trial judge held that the onus had not been discharged. [8] The appellant’s claim to a deduction of $215,000 for investments at the date of marriage was based on benefits received as a result of the death of his first wife, and to the appellant’s inheriting their joint investments. Again, the appellant did not produce documentation to support his claim.  However, the trial judge determined that his interest income could be used to substantiate the value of the investment.  The trial judge accepted the appellant’s evidence that he earned 13 percent interest on his investments in the year of marriage.  Using the analysis provided by the appellant's accountant, the trial judge found, at para. 150, that this “translates to a capital investment of $77,346”.  The amount of $75,000 was allowed as a deduction. [9] At para. 146, the trial judge explains why he rejected the appellant’s testimony that the amount of the investment was larger than that awarded. Key reasons included: the trial judge did not accept the appellant’s evidence that he did not spend any of the amount received; most of the amounts received would have been invested for almost the entire year and there was no evidence that the appellant “must have” invested the money in a one year guaranteed certificate. [10] We agree with the trial judge that the appellant failed to discharge the onus required to obtain deductions claimed in his net family property.  The appellant did not provide sufficient documentation to justify these deductions. In these circumstances, the limited deduction allowed by the trial judge was appropriate. Income for Child Support: [11] The trial judge imputed income to the appellant for several of the years after separation. The most significant amount in issue is the year 2007 when the trial judge found that the appellant’s income for child support purposes was 1.3 million dollars. This raised two issues: the amount of income determined by the trial judge and whether using the table amount to calculate support was inappropriate. [12] The appellant’s line 150 income was $592,125.  The trial judge added to that figure the non-taxable capital gain received in the year.  Section 19(1) (h) of the Child Support Guidelines provides that these capital gains may be imputed as income.  The trial judge was correct to do so. [13] The appellant argues that the table amount of the Guidelines should not have been awarded on this income since the amount is too high. The trial judge addressed s. 4 of the Guidelines and found that, despite the high amount of the child support award, the table amount was not inappropriate in all the circumstances: see Francis v. Baker [1999] 3 S.C.R. 250. We see no reason to interfere. [14] With respect to the years 2010-2012 the trial judge imputed income to the appellant in the amount of $75,000 for 2010 and $100,000 for each of 2011 and 2012.  The appellant submits that, for each of these years, the income should be limited to his pension income of $40,000.  In rejecting this submission, the trial judge made specific findings that the appellant’s income tax returns for these years did not reflect his true income, that he was not living only on capital, and that he had not explained how he was covering his deficit. The Guidelines provide wide discretion to the trial judge to impute income as is appropriate in the circumstances.  It was open to the trial judge to make these findings. [15] The trial judge awarded child support for Fatima, having found that up until March 1, 2012 she was a child of marriage because she was attending school.  This finding was open to him on the evidence. Spousal Support: [16] The trial judge found that the respondent was entitled to spousal support on a compensatory basis and a non-compensatory basis.  The appellant argues that she should be entitled to neither.  She left the marriage with a significant equalization payment and has now remarried. [17] The trial judge concluded that compensatory support was warranted based on the respondent’s economic disadvantage as a result of childcare obligations but that the amount to which she was entitled was “not large”.  In dealing with non-compensatory support, the trial judge, focusing on the fact that the respondent not only remarried but also failed to disclose her new husband’s financial circumstances, concluded that the spousal support award should primarily be based on her entitlement to limited compensatory support. [18] The trial judge summarized his assessment of the respondent’s entitlement to support at para. 369, as follows: Given that the primary component of [the respondent’s] support entitlement is non-compensatory and, given [her] non-disclosure regarding her husband’s income, financial circumstances and contribution to household expenses, I find that the support obligation should be reflective primarily of the compensatory portion of [her] spousal support entitlement [19] The trial judge then awarded the relatively modest amount of $500 per month for 2011 and $400 per month for 2012.  These amounts were a mere fraction of the amounts suggested by the Spousal Support Advisory Guidelines and reflect a significant discount as a result of the issues raised by the appellant. [20] The determination of spousal support is highly individual and discretionary.  On the basis of the evidence and the trial judge’s analysis, we see no reason to interfere with the exercise of his discretion in this regard. DISPOSITION [21] The appeal is dismissed with costs to the respondent fixed at $15,000 inclusive of all applicable taxes and interest. “Doherty J.A.” “Gloria Epstein J.A.” “M.L. Benotto J.A.”

Judgment of the Court (Seventh Chamber) of 31 January 2008 – Commission v Luxembourg (Case C‑268/07) Failure of a Member State to fulfil obligations – Directive 2004/17/EC – Public procurement procedures in the water, energy, transport and postal services sectors – Failure to transpose within the prescribed period 1. Acts of the institutions – Directives – Implementation by Member States (Art. 249 EC) (see paras 9-10) 2. Member States – Obligations – Implementation of directives – Failure to fulfil obligations – National system pleaded as justification – Not permissible (Art. 226 EC) (see para. 13) 3. Actions for failure to fulfil obligations – Examination of merits by the Court – Situation on expiry of the period laid down in the reasoned opinion (Art. 226 EC) (see para. 14) Re: Failure of a Member State to fulfil obligations – Failure to adopt, within the prescribed period, the provisions necessary to comply with Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ 2004 L 134, p. 1). Operative part The Court: 1. Declares that, by failing to adopt, within the prescribed period, the laws, regulations and administrative provisions necessary to comply with Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors, the Grand Duchy of Luxembourg has failed to fulfil its obligations under that directive; 2. Orders the Grand Duchy of Luxembourg to pay the costs.

CIVIL ORIGINAL JURISDICTION Writ Petition Nos. 751, 794 and 798 of 1986. Under Article 32 of the Constitution of India. Dr. Y.S. Chitale, Soli J. Sorabiee, A.B. Diwan, B.V. Desai, Ms. Madavi Gupta, Bharat Sangal, Harish N. Salve, V.S.N. Chari, Ms. Sunita Modigunda, Ms. Vrinda Grover and K. Bhattacharya for the Petitioners. Ramaswamy, Additional Solicitor General Anil Dev Singh, P.S. Shroff, S.S. Shroff, R. Karanjawala, Mrs. M. Karanjawala, Ejaz Maqbool, Mrs. Shobha Dikshit, E.C. Aggarwal, B.V. Desai, Ms. Madhavi Gupta, C.S. Vaidyanathan and V. Deshpande for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. These are three petitions under Art. 32 of the Constitution by three different groups of petitioners. In each of these writ petitions petitioner No. 1 is a private limited companypany and the second petitioner is a shareholder thereof. The petitionercompany in each of these cases obtained the right to companylect oleo resin gum or to process the same for industrial purposes from the State of Jammu Kashmir and each of them seeks to challenge the vires of the provisions of the Jammu Kashmir Extraction of Resin Act 7 of 1986 hereinafter referred to as the Act . Though there are some variations of facts relevant to each of the writ petitions, the allegations are more or less similar in regard to the relevant companytentions--both factual and legal. When rule was issued the respondent-State came with almost the same plea, traversing companymon grounds and revealing a companymon stand in its returns to the Court. These three writ petitions were heard at a time and are number being disposed of by a companymon judgment. Resin is the secretion extracted by tapping or otherwise from chir, chil and kail trees wildly growing in the forests of Jammu Kashmir. It is an exudate and when subjected to chemical treatment and distillation with the aid of steam yields 70 resin, 15 turpentine and the remaining 15 of waste material. The down-stream products which are manufactured from this raw material are varnish, camphor, paints and turpene chemicals. The petitioner-company in writ petition No. 751/86 obtained under Government order dated 27.4.1979 allotment of 10 to 12 lacs of blazes annually for extraction of resin from the inaccessible forests in Poonch, Reasi and Ramban Divisions of the State for a period of 10 years on terms and companyditions set out in the said Government order. Government order had also been made granting rights in favour of the petitioner-company in writ petition No. 794/86. The petitionercompany in writ petition No. 798/86 was a processor only and had number undertaken to work as a tapper. Applications under Art. 32 of the Constitution were filed in this Court at that point of time on the ground that the Government orders and or companytracts were hit by Arts. 14 and 19 of the Constitution and the grant of forest rights in favour of the present petitioners was arbitrary, mala fide and number in public interest. It was further companytended that State largesse had been companyferred on the petitioners at the companyt of the State exchequer. The petitioners therein also pleaded that a monopoly had been created in favour of the private grantees and was number protected under Art. 19 1 g of the Constitution. According to Kasturilal, the petitioner before this Court then, the benefits should have been thrown open and opportunity should have been provided to all interested persons to companypete for the obtaining of the companytract. A three-Judge Bench companysisting one of us the learned Chief Justice dealt with the matter at length and ultimately dismissed the petition holding that there was numbersubstance in any of the companytentions advanced on behalf of Kasturilal. Kasturi Lal Lakshmi Reddy v. State of Jammu Kashmir Anr., 1980 3 SCR 1336 . The order made in favour of the petitioner-company in writ petition No. 794/86 and incorporated in the agreement dated 6.11. 1978 had also been challenged in a separate writ petition before this Court and the reasoned order for rejection of the writ petition is found in Brij Bhushan Ors. v. State of Jammu Kashmir Ors., 1986 2 SCC 354. While the petitioner-company in writ petition No. 751/86 had agreed to work as tapper and processor on the stipulation that 25 of the annual companylection of gum subject to minimum of 1500 metric tonnes would be made over to the Government companypany J K Industries Limited and out of the rest number exceeding the limit of 3500 metric tonnes would be used by them, the petitioner-company in writ petition No. 794/86 who had been operating from before as tappers only entered into a formal agreement with the State claiming to process and manufacture down-stream goods. The writ petitioner-company in writ petition No. 798/86 had agreed to work as processor only. In the seventies, the State of Jammu Kashmir decided to industrialise the hitherto under-developed State and with that end in view came forward with scheme and threw open invitation to outsiders to set up industries at companyvenient places within the State. As stimulus Government offered land and other facilities. The petitioners in these three writ petitions and another who has since withdrawn the writ petition, went into the State of Jammu Kashmir in response and negotiated the arrangements we have already adverted to. While the petitioners were carrying on their business activities, Governors Act 7 of 1986, the provisions whereof are impugned in these petitions by which all their existing rights came to terminate, came into force with effect from 23.4.1986. The Act sought to create a monopoly with reference to resin in favour of J K Industries Limited, which is a respondent to these petitions. The Act has seven sections in all. Section 1 gives the short title, extent and the date of companymencement while s. 2 defines four terms, namely, prescribed, resin, resin depot and resin products. Section 3 bans extraction and other dealings of resin by private persons while s, 4 makes provision for disposal of resin. Section 5 provides the manner of fixation of price. Section 6 provides for penalty for offences and s. 7 clothes the State Government with power to make rules for carrying out the purposes of the Act. Challenge in the writ petitions has been to the provisions companytained in ss. 3, 4 and 5 of the Act. We propose to excerpt these provisions for companyvenience Ban on extraction by private persons Notwithstanding anything to the companytrary companytained in any law, rule, order, instrument, agreement or companytract or in any judgment, decree or order of any Court or Authority, numberperson, other than the Government shall as from the companymencement of this Act ,-- a extract resin by tapping or otherwise from Chit Chil or Kail trees in the State whether such trees belong to the State or number b transport resin from one place to other in the State except under and in accordance with the permit granted under this Act c acquire, possess, store, dispose of or otherwise deal with any resin extracted and manufactured in the State. Disposal of resin All resin extracted under section 3 shall be stored at resin depots and thereafter shall be sold by the Government to the Jammu Kashmir Industries Limited for processing. After processing it by the Jammu Kashmir Industries Limited, the resin products, if any surplus, shall be sold by it to the small scale units and medium scale units in the State in such manner as may be provided for, and at such price as may be fixed by the Jammu Kashmir Industries Limited in companysultation with the Government. Fixation of price-- The Government shall, having due regard to the following facts, fix the price at which resin shall be sold by it during a year, namely a the sale price of resin, if any, fixed under this Act during the preceding three years b the companyt of transport c the companyt of extraction of resin d the companyt of packing of resin including the companyt of companytainer in which resin is delivered e the prevalent sale price at which resin is being sold in other resin producing States f any other factor which the Government companysiders relevant. The price so fixed shall be published in the Official Gazette and shall number be altered during the year to which it relates. In exercise of the rule-making power, the State Government has brought into force a set of rules known as the Jammu Kashmir Extraction of Resin Rules, 1986 with effect from 27.9.1986. It is number in dispute that by the provisions of this Act all the existing companytracts between parties and the State and existing grants in respect of companylection, transport, storage and otherwise dealing with resin have companye to forthwith terminate and a monopoly situation has been created qua these operations in resin in favour of the Government companypany. The Act does number provide for any companypensation and the petitioners maintain that the existing rights in their favour amounted to property and companyld number have been expropriated in companytravention of the guarantee in Part III of the Constitution. It is the stand of the State that the benefits and privileges companyferred on the three petitioners either under companytract or under Government orders did number companystitute property and by the provisions of the Act numbertransfer of such property has taken place. It is relevant to point out at this stage that subclause f was deleted from Art. 19 1 of the Constitution by the Forty-fourth Amendment with effect from 20th of June, 1979 and acquisition, holding and or disposal of property ceased to be a fundamental right. The same companystitutional amendment deleted Art. 31 but so far as the State of Jammu Kashmir is companycerned the Forty-fourth Amendment did number bring about any change and right to property, therefore, companytinues to be fundamental and law enunciated by this Court treating property be one of the fundamental rights still applies to Jammu Kashmir. That is why, sumptuous reference has been made by companynsel for the petitioners to a catena of precedents touching upon right to property as a fundamental one. The petitioners maintained that the Government orders and companytracts under which they have got the right to exploit or utilise the particular forest product does amount to property and the petitioners were entitled to protection thereof against expropriation and in case numbercompensation was provided the relevant provisions of the Act became exposed to challenge. They have similarly companytended that the impugned provisions of s. 3 are hit for companytravening the fundamental right guaranteed by Art. 19 1 g which companyfers upon them the right to carry on any occupation, trade or business. The Government orders made in 1979 did companyfer the right to exploit the forest and appropriate a part of the companylection of the gums for purposes of business. The companycept of property known to jurisprudence has expanded through several pronouncements of this Court. Ramana Dayaram Shetty The International Airport Authority of India Ors., 1979 3 SCR 1014, to which one of us the learned Chief Justice was party held Today the Government in a welfare State is the regulator and dispenser of special services and provider of a large number of benefits, including jobs, companytracts, licences, quotas, mineral rights etc. The Government pours forth wealth, money, benefits, services, companytracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They companyprise social security benefits, cash grants for political sufferers and the whole scheme of State and the local welfare. Then again, thousands of people are employed in the State and the Central Governments and local authorities. Licences are required before one can engage in many kinds of business or work. The power of giving licences means power to withhold them and this gives companytrol to the Government or to the agents of Government on the lives of many people It is virtually impossible to lose money on them and many enterprises are set up primarily to do business with Government. Government owns and companytrols hundreds of acres of public land valuable for mining and other purposes. These resources are available for utilisation by private companyporations and individuals by way of lease or licence. All these mean growth in the Government largess and with the increasing magnitude and range of governmental functions as we move closer to a welfare State, more and more of our wealth companysists of these new forms. Some of these forms of wealth may be in the nature of legal rights but the large majority of them are in the nature of privileges. But on that account, can it be said that they do number enjoy any legal protection? Can they be regarded as gratuity furnished by the State so that the State may withhold grant or revoke it at its pleasure The law has number been slow to recognise the importance of this new kind of wealth and the need to protect individual interest in it and with that end in view, it has developed new forms of protection. Some interests in Government largess, formerly regarded as privileges, have been recognised as rights while others have been given legal protection number only by forging procedural safeguards but also by companyfining structuring and checking Government discretion in the matter of grant of such largers It is insisted, as pointed out or Prof. Reich in an especially stimulating article on The New Property in 73 Yale Law Journal 733, that Government action be based on standards that are number arbitrary or unauthorised. In Kasturi Lal Lakshmi Reddy v. State of Jammu Kashmir Anr., supra , the interest created in favour of the petitioners in the forest assets of the State which has number been fatally hit by section 3 was companysidered to be property. At page 1354 of the Reports this Court stated It was pointed out by this Court in Ramana Dayaram Shetty v. The International Airport Authority of India Ors., supra that with the growth of the welfare state, new forms of property in the shape of Government largess are developing, since the Government is increasingly assuming the role of regulator and dispenser of social services and provider of a large number of benefits including jobs, companytracts, licences, quotas, minerals rights etc. In Subodh Gopal Boses case 1954 SCR 587, this Court had pointed out The word property in the companytext of Article 31 the same should be the meaning under Article 19 1 f which is designed to protect private property in all its forms, must be understood both in a companyporeal sense as having reference to all those specific things that are susceptible of private appropriation and enjoyment as well as in its juridical or legal sense of a bundle of rights which the owner can exercise under the municipal law with respect to the user and enjoyment of those things to the exclusion of all others. Again, in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning Weaving Co. Ltd. Ors., 1954 SCR 674, this Court held A companytract or agreement which a person may have with the companypany and which may be cancelled by the Directors in exercise of powers under ordinance will undoubtedly be property within the meaning of the two articles. In R.C. Cooper v. Union of India, 1970 3 SCR 530 an eleven-Judge Bench at page 567 of the Reports, stated By Entry 42 in the Concurrent List power was companyferred upon the Parliament and the State Legislatures to legislate with respect to Principles on which companypensation for property acquired or requisitioned for the purpose of the Union or for any other public purpose is to be determined, and the form in which such companypensation is to be given. Power to legislate for acquisition of property is exercisable only under Entry 42 of List III, and number as an incident of the power to legislate in respect of a specific head of legislation in any of the three lists. Under that Entry property can be companypulsorily acquired. In its numbermal companynotation property means the highest right a man can to anything, being that right which one has to lands or tenements, goods or chatties which does number depend on anothers companyrtesy it includes ownership, estates and interests in companyporeal things, and also rights such as trade-marks, companyyrights, patents and even rights in personam capable of transfer or transmission, such as debts and signifies a beneficial right to or a thing companysidered as having a money value, especially with reference to transfer or succession, and to their capacity of being injured. In Madan Mohan Pathak v. Union of India Ors., 1978 3 SCR 334 this Court was examining the validity of the Life Insurance Corporation Modification of Settlement Act of 1976. The settlement had created a right to bonus in favour of the Class 111 and Class IV employees of the Corporation and the Act adversely interfered with that settlement. The question for companysideration of the seven-Judge Bench was whether bonus payable under the settlement was property within the meaning of Art. 31 2 and whether stopping payment of bonus amounted to companypulsory acquisition of property without payment of companypensation. The Court ultimately held that bonus was property and the legislation was bad. At p. 358 of the Reports, this Court said It is clear from the scheme of fundamental rights embodied in Part III of the Constitution that the guarantee of the right to property is companytained in Article 19 1 f and clauses 1 and 2 of Article 31. It stands to reason that property cannot have one meaning in Article 19 1 f , another in Article 31 clause 1 and still another in Article 31, clause 2 . Property must have the same companynotation in all the three Articles and since these are companystitutional provisions intended to secure a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind. At p. 360 of the Reports, the Court again stated that every form of property, tangible or intangible, including debts and choses in action companystituted property, In this group of cases before us the executive grant or the companytract created interest in the petitioners and there is numberroom to doubt that by such process in favour of the petitioners property right had been created. Learned Additional Solicitor General appearing for the State had companytended that the companytractual interest or the interest in terms of the Government order did number companystitute property and relied upon certain precedents of this Court. The Coal Nationalisation case on which reliance was mainly placed is clearly distinguishable on facts. We do number think it necessary to refer to other authorities as the ones referred to above are binding precedents and unequivocally indicate that the interests which are in dispute before us do companystitute property entitled to protection under Art. 19 1 f and are companyered by Art. 31 2 of the Constitution. Reliance has been placed by learned Additional Solicitor General on the restrictive provision companytained in sub-Art. 5 whereby reasonable restrictions in public interest companyld be imposed on the exercise of right to property. There are situations, the learned companynsel has argued, where the restrictions companyld go to the point of almost wiping out the right. He relied upon some precedents in support of this proposition. Section 3 is a total annihilation of existing rights and numberhing of the interest created either under the executive orders or companytract is allowed to survive. We do number think there is room within the legal frame to sustain such a situation under sub-Art. 5 . Sub-Art. 6 , like sub-Art. 5 , protects restrictive law in public interest. What we have said in regard to sub- Art. 5 perhaps equally applies to sub-Art. 6 . Article 31 2 provided No property shall be companypulsorily acquired or requisitioned save for a public purpose and save by authority of a law which provides for acquisition or requisitioning of the property for an amount which may be fixed by such law or which may be determined in accordance with such principles and given in such manner as may be specified in such law and numbersuch law shall be called in question in any companyrt on the ground that the amount so fixed or determined is number adequate or that the whole or any part of such amount is to be given otherwise than in cash It has already been stated that the Act does number provide for any companypensation. Section 3 has an overriding application. It provides that it shall number only apply to the classified trees belonging to the State but it shall also apply to such trees belonging to private persons and rights of such private owners to carry on the various operations described in s. 3 are companypletely taken away without provision of any companypensation. It cannot be companytended in view of what we have stated above that the right of beneficial enjoyment of the trees by carrying out the processes named in s. 3 do number companystitute property. Unless the position is companyered by clause 2A of Art. 31, in view of our companyclusion that the interest created under the companytract, Government order or the right of beneficial enjoyment vested in the private owner of the trees amount to property, the Act would be hit by Art. 31 2 . Sub-Art. 2A provides Where a law does number provide for the transfer of the ownership or right to possession of any property to the State or to a companyporation owned or companytrolled by the State, it shall number be deemed to provide for the companypulsory acquisition or requisitioning of property, numberwithstanding that it deprives any person of his property. Learned Additional Solicitor Generals companytention has been that under the provisions of s. 3 of the Act the rights that vested in the petitioners stand wiped out or extinguished but those rights have number been vested in either the State or the Government companypany. This companytention overlooks the resultant outcome of the provisions of the Act. Section 3 which takes away private fights and authorises Government alone to extract, transport it and acquire, possess or dispose of or otherwise deal with the resin extracted and manufactured within the State and s. 4 authorises Government to sell the same to the Government companypany for processing. What is taken away under s. 3 from the hands of private parties is undoubtedly given by the same provision to Government. In Madan Mohan Pathaks case supra , this Court had pointed out The verbal veil companystructed by employing the device of extinguishment of debt cannot be permitted to companyceal or hide the real nature of the transaction. It is necessary to remember that we are dealing here with a case where a companystitutionally guaranteed right is sought to be enforced and the protection of such right should number be allowed to be defeated or rendered illusory by legislative stratagems. The companyrts should be ready to rip open such stratagems and devices and find out whether in effect and substance the legislation trenches upon any fundamental rights. The encroachments on fundamental rights are often subtle and sophisticated and they are disguised in language which apparently seems to steer clear of the companystitutional inhibitions. It is number necessary to multiply precedents, As we have already pointed out, s. 3 of the Act extinguishes private rights and companyfers the right to deal with the subject matter of such rights on the State. An attempt was made to distinguish the rule in Pathaks case by relying upon the decision in Tara Prasad Singh v. Union of India Ors., 1980 3 SCR 1042. That seven-Judge Bench was dealing with the Coal Mines Nationalisation Amendment Act of 1976. The Court referred to the two previous decisions in Ajit Singh v. State of Punjab, 1967 2 SCR 143 and Madan Mohan Pathak v. Union of India, supra , and observed These decisions have numberapplication to the instant case because the interest of the lessees and sub-lessees which was brought to termination by section 3 3 b of the Nationalisation Amendment Act does number companye to be vested in the State. The Act provides that excepting a certain class of leases and subleases, all other leases and subleases shall stand terminated in so far as they relate to the winning or mining of companyl. There is numberprovision in the Act by which the interest so terminated is vested in the State Nor does such vesting flow as a necessary companysequence of any of the provisions of the Act. Subsection 4 of section 4 of the Act provides that where a mining lease stands terminated under sub-section 3 , it shall be lawful for the Central Government or a Government Company or a companyporation owned or companytrolled by the Central Government to obtain a prospecting licence or a mining lease in respect of the whole or part of the land companyered by the mining lease which stands so terminated. The plain intendment of the Act, which, may it be reiterated, is neither a pretense number a facade, is that once the outstanding leases and sub-leases are terminated, the Central Government and the other authorities will be free to apply for a mining lease. Any lease-hold interest which the Central Government, for example, may thus obtain does number directly or immediately flow from the termination brought about by section 3 3 b . Another event has to intervene between the termination of existing leases and the creation of new interests. The Central Government, etc. have to take a positive step for obtaining a prospecting licence or a mining lease. Without it, the Act would be ineffective to create of its own force any right or interest in favour of the Central Government, a Government Company or a Corporation owned, managed or companytrolled by the Central Government. The statutory scheme of the Act which we are companysidering is to extinguish private rights both in respect of Government owned trees as also trees in private ownership and to vest those rights in the State Government or the Government companypany. The facts in this group of cases, therefore, clearly indicate that there is a direct relationship between nullification of the private rights and vesting of those in the State or the Government companypany. In other words, where the companytract was given by the Government in respect of the trees belonging to the State, the nullification of the companytract would result in the automatic transfer by reversion of the property in the companytract to the Government. Similarly, where the ownership vested in the private persons by operation of s. 3 of the Act, the right to appropriate the usufruct of the trees is taken away from the private owner and is vested in the State. The rule in Pathaks case, therefore, is applicable. Sub-Art. 2A of Art. 31, therefore, does number apply to the facts of the present case. Consequently, sub-Art. 2 applies and companypensation, therefore, was payable before the property companyld be taken over by the State. Petitioners in writ petition No. 794/86 had claimed that pursuant to the arrangement entered into between them and the State following the invitation by the State they had invested Rs. 1.68 crores in shape of plant and machinery and 63 lacs of rupees by way of land and buildings. The petitioner in the other two cases stated that investments had been made by them as well. The petitioners were invited to set up industries by assuring them supply of the raw material. They changed their position on the basis of representations made by the State and when the factories were ready and they were in a position to utilise the raw material, the impugned Act came into force to obliterate their rights and enabled the State to get out of the companymitments. We are inclined to agree with the submissions made on behalf of the petitioners that the circumstances gave rise to a fact situation of estoppel. It is true that there is numberestoppel against the legislature and the vires of the Act cannot be tested by invoking the plea but so far as the State Government is companycerned the rule of estoppel does apply and the precedents of this Court are clear. It is unnecessary to go into that aspect of the matter as in our companysidered opinion the impugned Act suffers from the vice of taking away rights to property without providing for companypensation at all and is hit by Art. 31 2 of the Constitution. Connected proceedings had been taken for interim arrangement regarding provision of raw material to the petitioners and certain other parties. We do number propose to deal with those aspects in this judgment but liberty is given to parties to apply for such directions as they companysider appropriate and such applications, when filed, will be dealt with separately. In the result, each of the writ petitions succeeds. We declare the provisions of ss. 3 and 4 of the Act to be ultra vires the Constitution and since these provisions companytain the soul of the Act and without them, the Act cannot operate, the entire Act has to suffer. The petitioners shall have their companyts to these proceedings.

Joined Cases T-49/02 to T-51/02 Brasserie nationale SA (formerly Brasseries Funck-Bricher and Bofferding) and Others v Commission of the European Communities (Restrictive practices – Luxembourg beer market – Fines) Judgment of the Court of First Instance (Second Chamber), 27 July 2005 Summary of the Judgment 1. Competition – Agreements, decisions and concerted practices – Agreements entered into to mitigate the effect of legal rules considered to be too unfavourable – Not permissible (Art. 81(1) EC) 2. Competition – Agreements, decisions and concerted practices – Not allowed – Justification for an agreement prohibited under Article 81(1) EC on the basis of a rule of reason – Not permissible (Art. 81(1) EC) 3. Competition – Agreements, decisions and concerted practices – Impairment of competition – Criteria for assessment – Anti-competitive purpose – Sufficient finding (Art. 81(1) EC) 4. Competition – Agreements, decisions and concerted practices – Agreements between undertakings – Definition – Joint intention as to the conduct to be adopted on the market – Form of the expression of intention – Not relevant (Art. 81(1) EC) 5. Competition – Administrative procedure – Decision establishing an infringement – Obligation to define the market in question – Scope (Art. 81 EC) 6. Competition – Community rules – Infringements – Committed intentionally – Meaning (Council Regulation No 17, Art. 15) 7. Competition – Fines – Amount – Determination – Discretion of the Commission – Judicial review (Art. 229 EC; Council Regulation No 17, Art. 17) 8. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Particularly serious infringements – Market-sharing arrangement – Partitioning of the market (Art. 81(1) EC); Council Regulation No 17, Art. 15(2)) 9. Competition – Fines – Amount – Determination – Criteria – Duration of the infringements – Agreement penalised because of its anti-competitive object regardless of its effects – Consideration of the duration of the agreement without regard to its non-application (Council Regulation No 17, Art. 15(2)) 10. Competition – Fines – Amount – Determination – Criteria – Gravity of the infringement – Mitigating circumstances – Agreement not implemented in practice – Assessment at the level of the individual conduct of each undertaking (Council Regulation No 17, Art. 15(2); Commission Communication 98/C 9/03, point 3) 1. It is unacceptable for undertakings to attempt to mitigate the effects of legal rules which they consider excessively unfavourable by entering into restrictive arrangements intended to offset those disadvantages on the pretext that they have created an imbalance detrimental to them. (see para. 81) 2. Once it has been established that the object of an agreement constitutes, by its very nature, a restriction of competition, such as a sharing of clientele, that agreement cannot, by applying a rule of reason, be exempted from the requirements of Article 81(1) EC by virtue of the fact that it also pursued legitimate objectives. (see para. 85) 3. In so far as an agreement between undertakings has the object of restricting competition, there is no need to examine whether it also had the effect of restricting it. (see paras 97, 140) 4. The concept of an agreement within the meaning of Article 81(1) EC centres round the existence of a concurrence of wills between at least two parties, the form in which it is manifested being unimportant so long as it constitutes the faithful expression of the parties’ intention. (see para. 119) 5. There is an obligation on the Commission to define the market in question in a decision applying Article 81 EC only where it is impossible, without such a definition, to determine whether the agreement, decision by an association of undertakings or concerted practice at issue is liable to affect trade between Member States and has as its object or effect the prevention, restriction or distortion of competition within the common market. (see para. 144) 6. For an infringement of the competition rules in the Treaty to be regarded as having been committed intentionally, it is not necessary that the undertaking was aware that it was restricting competition; it is sufficient that it could not have been unaware that the object of its conduct was the restriction of competition, and it is unimportant whether the undertaking was aware that it was infringing Article 81 EC. (see para. 155) 7. The gravity of infringements of competition law has to be determined by reference to numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, without there being any binding or exhaustive list of the criteria which must be applied. In addition, in the context of Regulation No 17 the Commission has a wide margin of discretion in fixing the amount of fines in order to steer the conduct of undertakings towards compliance with the competition rules. The Court of First Instance is, however, under a duty to verify whether the amount of the fine imposed is proportionate in relation to the gravity and duration of the infringement, and to weigh the gravity of the infringement and the circumstances invoked by the applicant. The Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] do not prejudge the assessment of the fine by the Community judicature, which has unlimited jurisdiction in this respect under Article 17 of Regulation No 17. (see paras 169-170) 8. Market-sharing arrangements and partitioning of the common market constitute some of the most serious infringements of Article 81 EC. As regards market-sharing, agreements of this type are among the examples of agreements explicitly declared to be incompatible with the common market in Article 81(1)(c) EC. They are categorised as obvious restrictions of competition. As regards the partitioning of the common market, such a patent infringement of competition law is, by its nature, particularly serious. It goes against the most fundamental aims of the Community and, in particular, the accomplishment of the single market. (see paras 173-175) 9. Where the Commission has not proven the effects of an agreement and was under no obligation to do so, the agreement in question having as its object the restriction of competition, it is irrelevant for calculating the duration of the infringement whether or not the agreement at issue was implemented. To calculate the duration of an infringement the object of which is to restrict competition, it is necessary merely to determine the period during which the agreement existed, that is, the time between the date on which it was entered into and the date on which it was terminated. (see para. 185) 10. The second indent of Section 3 of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] referring to the ‘non-implementation in practice of the offending agreements or practices’ may not be interpreted as referring to the case in which an agreement as a whole is not implemented, regardless of the conduct of each undertaking, but must be understood as a circumstance based on the individual conduct of each undertaking. (see para. 195) JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber) 27 July 2005 (*) (Restrictive practices – Luxembourg beer market – Fines) In Joined Cases T‑49/02 to T‑51/02, Brasserie Nationale SA (formerly Brasseries Funck-Bricher and Bofferding), established in Bascharage (Luxembourg), represented by A. Carnelutti and L. Schiltz, lawyers, with an address for service in Luxembourg, Brasserie Jules Simon et Cie SCS, established in Wiltz (Luxembourg), represented by A. Carnelutti and J. Mosar, lawyers, Brasserie Battin SNC, established in Esch-sur-Alzette (Luxembourg), represented by A. Carnelutti and M. Santini, lawyers, applicants, v Commission of the European Communities, represented by W. Wils and A. Bouquet, acting as Agents, with an address for service in Luxembourg, defendant, APPLICATION for annulment of Article 1 of Commission Decision 2002/759/EC of 5 December 2001 relating to a proceeding under Article 81 of the EC Treaty (Case COMP/37.800/F3 — Luxembourg Brewers) (OJ 2002 L 253, p. 21) in so far as it relates to the applicants, and for annulment of Article 2 of that Decision in so far as it imposes fines on the applicants or, in the alternative, a substantial reduction in the amount of those fines, THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Second Chamber), composed of A.W.H. Meij, President, N.J. Forwood and I. Pelikánová, Judges, Registrar: I. Natsinas, Administrator, having regard to the written procedure and further to the hearing on 16 March 2005, gives the following Judgment Facts 1 These cases concern Commission Decision 2002/759/EC of 5 December 2001 relating to a proceeding under Article 81 of the EC Treaty (Case COMP/37.800/F3 — Luxembourg Brewers) (OJ 2002 L 253, p. 21, ‘the Decision’). 2 The Decision relates to an agreement (‘the Agreement’) concluded on 8 October 1985 between five Luxembourg brewers (‘the parties’), namely Brasserie Nationale (‘Brasserie Nationale’), Brasserie Jules Simon et Cie, formerly Brasserie de Wiltz (‘Wiltz’), Brasserie Battin (‘Battin’) (referred to collectively as ‘the applicants’), Brasserie de Diekirch (‘Diekirch’) and Brasseries Réunies de Luxembourg Mousel et Clausen (‘Mousel’). 3 In 1999 Mousel and Diekirch were acquired by Interbrew SA (‘Interbrew’). In July 2000 Diekirch became a subsidiary of Mousel. At that time Mousel was renamed Brasserie de Luxembourg Mousel-Diekirch (‘Brasserie de Luxembourg’). 4 In the Decision Brasserie Nationale is called ‘Brasserie Nationale – Bofferding’, abbreviated to ‘Bofferding’. At the hearing its lawyer nevertheless confirmed that these titles referred to the same legal entity. It will be referred to below as ‘Brasserie Nationale’. 5 Article 1 of the Agreement states: ‘This Agreement is intended to prevent and settle disputes which, in the Grand Duchy, may arise as regards the mutual observance and protection of brewery clauses, otherwise known as “beer ties”, whether stipulated separately or contained in any other agreement or undertaking.’ 6 Article 2 of the Agreement states: ‘Beer tie means any written agreement, irrespective of its legal validity and/or its duration and/or its enforceability, by which one of the contracting brewers has agreed with a publican that he will stock only Luxembourg beers produced by that brewer or brewed under licence by a Luxembourg brewer and/or sold by a Luxembourg brewer for a fixed period and/or for a given quantity of beer …’. 7 Article 4 stipulates that: ‘The undersigned brewers shall refrain, and undertake to strictly prohibit their distributors, from selling any beer to an on-trade outlet which is guaranteed under the terms of this Agreement to one of the other signatory brewers. In the event of a repeat infringement by the distributor, the following action will be taken: The contracting brewer will formally prove that its customer is selling the beers of a competing brewer and will, if necessary, draw his attention to the supply agreement. It will also draw that agreement to the distributor’s attention and formally warn him to stop all supplies of beer. At the same time it will ask the competing brewer to summon its distributor and duly order him to cease all supplies to the customer tied by contract to its colleague, so as to avoid any complicity by the competing brewer in its distributor’s actions. …’ 8 Article 5 of the Agreement provides that: ‘Each contracting brewer undertakes before contracting with and/or making a supply of beer to a publican previously supplied by the other brewer to inquire of the latter in advance whether there is a “beer tie” in its favour. The request for information shall be addressed in writing to the other brewer, which shall be obliged to provide the information, accompanied if necessary by supporting documents, to establish whether or not there is a “beer tie”. … A copy of the request for information may be sent to the director of the Luxembourg Brewers Federation.’ 9 Articles 6 and 7 of the Agreement lay down penalties for infringement of Articles 4 or 5. Articles 8, 9 and 10 establish conciliation, arbitration and consultation procedures. Article 11 provides for terminating the Agreement in the event of a takeover by a foreign company or cooperation with a foreign brewer. Lastly, Article 12 stipulates that the Agreement is concluded for an indefinite period and that the period of notice for withdrawal is 12 months. 10 The Agreement is supplemented by a declaration of intent, also signed on 8 October 1985 (‘the declaration of intent concerning Battin’), which reads as follows: ‘[Battin] is not infringing Article 2 [of the Agreement] by distributing the beers of its licensor “Bitburger Brauerei Th. Simon”, Federal Republic of Germany, according to the current forms and methods of distribution. If in the future the forms or methods of distribution change or if a significant increase in volume should upset the current balance of distribution, ... the [Agreement] may be terminated at any time in respect of [Battin].’ 11 The Agreement was also supplemented by a declaration of intent signed at the meeting of the Fédération des Brasseurs Luxembourgeois (Luxembourg Brewers Federation, ‘the FBL’) on 2 December 1986 (‘the declaration of intent concerning foreign brewers’). It provides that: ‘The signatory brewers to [the Agreement] declare that they wish to reserve priority for canvassing and for the conclusion of a supply contract to one of their Luxembourg colleagues in the event that written information from the brewer holding a contract indicates that one of its customers is being canvassed and is preparing to conclude a supply agreement with a foreign brewer, despite being tied to one of them by a supply contract that comes within the scope of the [Agreement]. Should a colleague manage to conclude a supply contract with the former customer of a brewer that has granted it canvassing priority in writing, that colleague undertakes, at the first available opportunity for such an exchange, to offer the other brewer one of its customers in a similar position for canvassing by that brewer.’ The contested decision 12 In the Decision the Commission considers that the object of the Agreement was, first, to maintain the parties’ respective clienteles in the ‘Horeca’ sector (hotels, restaurants and cafés, in other words the on-trade) in Luxembourg and, second, to impede penetration of that sector by foreign brewers (recitals 47 to 73). 13 It goes on to consider that the Agreement was likely to restrict competition appreciably in that sector and to have an appreciable effect on trade between Member States. It therefore concludes that, by adopting the Agreement, the parties infringed Article 81(1) EC (recitals 74 to 85). 14 According to the Decision, the infringement was committed intentionally, within the meaning of Article 15(2) of Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962 (II), p. 87), which was then applicable (recitals 89 and 90). 15 Article 1 of the Decision states that: ‘[The parties] have infringed Article 81(1) [EC] by concluding an agreement which had the object of maintaining their respective clienteles in the Luxembourg on-trade and of impeding penetration of that sector by foreign brewers. The infringement lasted from October 1985 to February 2000.’ 16 Article 2 of the Decision imposes a fine of EUR 400 000 on Brasserie Nationale and fines of EUR 24 000 each on Wiltz and Battin. Procedure 17 By three applications lodged at the Registry of the Court of First Instance on 26 February 2002, the applicants brought the present actions. 18 The written procedures were concluded on 25 November 2002. 19 After the parties had been heard on the point, the President of the Second Chamber, by an order of 15 February 2005, joined the cases for the purposes of the oral proceedings and the judgment, in accordance with Article 50 of the Rules of Procedure of the Court of First Instance. 20 Since the President of the Second Chamber was unable to take part in the present proceedings, on 22 February 2005 the President of the Court of First Instance designated Judge N.J. Forwood to complete the Chamber pursuant to Article 32(3) of the Rules of Procedure. Forms of order sought by the parties 21 In each of the cases the applicant concerned claims that the Court should: – annul Article 1 of the Decision in so far as it finds that the applicant has infringed Article 81(1) EC; – in any event, annul Article 2 of the Decision in so far as it imposes a fine on the applicant, alternatively, reduce that fine substantially; – order the Commission to pay the costs. 22 In each of the cases the Commission contends that the Court should: – dismiss the action; – order the applicant to pay the costs. Law 23 In each of the cases the applicant concerned raises two pleas, the first alleging infringement of Article 81(1) EC and the second infringement of Article 15(2) of Regulation No 17 and non-compliance with the obligation to state reasons enshrined in Article 253 EC. 1. First plea: infringement of Article 81(1) EC 24 The first plea is divided into five parts, in which the applicants complain, first, that when assessing the object of the Agreement the Commission did not take due account of its context; second, that it considered that the Agreement applied where no ‘beer tie’ existed; third, that it classified the Agreement as being designed to retain customers and hence anti-competitive by object; fourth, that it concluded that the object of the Agreement was to impede penetration of the Luxembourg on-trade by foreign brewers; and, fifth, that it considered that the Agreement had an appreciable effect on competition. 25 The third part of the first plea relates to the first restrictive object identified by the Commission, namely the maintenance of the parties’ respective clienteles in the Luxembourg on-trade, and the fourth part of this plea refers to the second restrictive object identified by the Commission, namely blocking the penetration of the Luxembourg on-trade by foreign brewers. The first part of the first plea alleges failure to state reasons for the assessment of the object of the Agreement. 26 As the third, fourth and first parts of the first plea all thus relate to the assessment of the object of the Agreement, they should be examined together. Assessment of the object of the Agreement (third, fourth and first parts of the first plea) The contested decision 27 The Decision notes, first, that, according to the minutes of the meeting of the FBL on 7 October 1986, as amended by the minutes of the meeting of the FBL on 2 December 1986, the parties agreed to interpret the term ‘beer tie’ more widely than in Article 2 of the Agreement. Those minutes state (recital 9): ‘[I]t is agreed that the following will be accepted and treated in the same way as a “beer tie”: – the transaction consisting of taking out a lease and contributing financially to fitting out of a café, without a “beer tie” being expressly mentioned, e.g. brewer X leases a building and contributes to the cost of its refurbishment for that purpose but does not, or does not manage to, enter into an obligation with the owner, and – the taking over of a drinks outlet licence (droit de cabaretage) by a brewer, without a “beer tie” being expressly mentioned. These two interpretations are an integral part of the existing provisions relating to this matter.’ 28 According to the Decision, this interpretation was confirmed by a letter dated 23 October 1991 from Wiltz to the FBL, according to which (recital 9): ‘[T]he brewers agree to accept and to treat in the same way as a “beer tie”: – the transaction consisting of taking out a lease; – the provision by a brewer, on whatever basis, of a drinks outlet licence’. 29 As regards the legal assessment of the object of the Agreement, the Decision states (recital 47): ‘The Agreement has the object, first of all, of restricting competition between the signatory brewers by maintaining their respective clienteles in the Luxembourg on-trade. This is clear from Articles 4 and 5, the penalties for infringing which are laid down in Articles 6 and 7 (see recitals 48 to 66). The Agreement also aims to impede penetration of the Luxembourg on-trade by foreign brewers. This second anti-competitive object is clear, in particular, from the second declaration annexed to the Agreement (see recitals 67 to 73).’ 30 With regard to the first anti-competitive object, the Commission considers that Article 4 of the Agreement prohibited each signatory brewer and its distributors from supplying beer to outlets that were guaranteed to other Luxembourg brewers. According to the Decision, that prohibition applied in three situations, namely where there was no supply contract or ‘beer tie’, where the ‘beer tie’ was void or unenforceable, and where there was a valid ‘beer tie’, and entailed a restriction on competition in each case. According to the Decision, in each situation the very object of the Agreement was to restrict competition (recital 48). 31 With respect to the first situation, the Decision states that when a brewer financed the fitting out of an outlet or acquired an outlet licence but did not conclude a contract with the outlet operator or did not impose an exclusive purchasing clause on him, Article 4 of the Agreement prevented the outlet operator from obtaining his supplies from other Luxembourg brewers. Thus the first brewer maintained its customers, and the freedom of action of the outlet operator and third-party brewers was limited (recital 50). 32 With respect to the second situation, the Decision finds that the Agreement went beyond the restrictions imposed by law, as it obliged the parties to honour ‘beer ties’ which were either invalid or unenforceable, for example because the brewer had breached his contractual obligations to the outlet operator. Thus, the parties reduced their freedom of action and granted each other advantages, in terms of maintaining their clientele and of legal certainty, which would not have applied under normal competitive conditions. The Decision adds that the Luxembourg case-law which led to the setting aside of contracts on the grounds that the prices or quantities were undetermined no longer applied after March 1996, but that the parties did not terminate the Agreement at that time. Furthermore, according to the Decision, the expression ‘irrespective of its legal validity and/or its duration and/or its enforceability’ extended the guarantee in Article 4 to contracts that would be invalid or unenforceable on grounds other than the fact that prices or quantities were undetermined (recitals 52 to 55). 33 With respect to the third situation, the Decision states, first, that Article 4 of the Agreement prohibited ‘any sale of beer to an outlet … guaranteed to one of the other signatory brewers’, whereas the obligation referred to in Article 7(1) of Commission Regulation (EEC) No 1984/83 of 22 June 1983 on the application of Article [81](3) EC to categories of exclusive purchasing agreements (OJ 1983 L 173, p. 5), as amended most recently by Commission Regulation (EC) No 1582/97 of 30 July 1997 (OJ 1997 L 214, p. 27), was limited to beers of the same type as those supplied by the contracting brewer. Second, the Agreement completely prohibited any supply to an outlet that was tied to another party, whereas in civil law the penalty for making such supplies is limited, according to the parties themselves, to the payment of damages and interest. For various reasons, according to the Decision, it is possible that an operator might wish to breach his contract and to assume the financial consequences of the breach. In the view of the Commission, the Agreement made this type of arbitrage by outlet operators impossible, and thus served to maintain inefficient relationships (recitals 56 to 58). 34 The Decision then states that the restriction of competition on account of the object of the Agreement stems first from the fact — not contested by the parties — that the Agreement applied even in cases where there was no supply contract or ‘beer tie’ and it could therefore not be the subject of any dispute (recital 59). 35 Second, the Decision notes that the Agreement was preceded by several other agreements between Luxembourg brewers, for example the agreement of 1 September 1966 involving all the contracting undertakings and the agreements of 13 June 1975 and 28 April 1983 involving Brasserie Nationale and Mousel. According to the Decision, these earlier agreements required the signatory brewers to honour each other’s clienteles absolutely, without referring to any exclusive purchasing clause or any problem of legal certainty. According to the Decision, the interpretation of the Agreement cannot be entirely dissociated from this historical context, which is such as to cast doubt on the legal uncertainty relied on by the parties as a justification for the Agreement (recital 60). 36 Third, it is noted that the assessment of the object of the Agreement does not depend on the parties’ subjective intentions, in that the nature of the Agreement is obviously such as to restrict or distort competition (recital 61). 37 Fourth, the Commission emphasises, with regard to the problem of legal uncertainty raised by the parties, that, depending on the applicable rules of national civil law, this type of problem can affect various types of contract in different industries and different Member States, and forms part of the overall commercial risks that every undertaking has to deal with independently. According to the Decision, this problem ‘does not justify an agreement whose benefits are reserved for national undertakings’ and ‘does not merit a derogation’ from Article 81(1) EC (recital 62). 38 Moreover, the Decision notes that the director of the FBL expressly acknowledged that the Agreement was not legally valid by observing, at the conciliation meeting between Brasserie Nationale and Diekirch on 19 March 1996, that ‘even if the inter-brewer provisions do not have legal force, there is the spirit which has been put into them and which prevails’ (recital 63). 39 The Decision then notes that Article 5 of the Agreement reinforces the restriction of competition resulting from Article 4 by ensuring that it is effectively applied, and that Articles 6 and 7 are intended to strengthen the obligations imposed by Articles 4 and 5 and provide for penalties that exceed those provided by civil law (recitals 64 to 66). 40 With regard to the second anti-competitive object, namely to impede penetration of the Luxembourg on-trade by foreign brewers, the Decision notes that the declaration of intent regarding foreign brewers provides for consultation between the parties in order to reserve canvassing priority for one of its ‘Luxembourg colleagues’, followed, should the canvassing be successful, by a compensatory mechanism for exchanging outlets between the two parties concerned. According to the Commission, this object is confirmed by the fact that, at the conciliation meeting between Brasserie Nationale and Diekirch on 19 March 1996, the director of the FBL stated that ‘the aim [was] to avoid …the massive incursion of foreign brewers onto [their] market’. Although that remark does not commit the parties, it should nevertheless be taken into account for the purpose of interpreting the Agreement, as it was made at a meeting relating to the application of the Agreement. According to the Decision, this second anti-competitive object cannot be dissociated from the first, since restricting the penetration of the Luxembourg market by foreign brewers helped to preserve the stability of relations between the parties. According to the Commission, the declaration of intent concerning Battin was intended to preserve ‘the current balance of distribution’, which indicates that the parties considered that the sector enjoyed a degree of equilibrium that merited protection. Lastly, the Decision notes that Article 11 of the Agreement makes it possible to terminate the Agreement in respect of a contracting brewer which cooperates with a foreign brewer (recitals 67 to 73). Arguments of the parties – Allegedly wrong classification of the Agreement as having the object of maintaining clienteles (third part of the first plea) 41 The applicants complain that the Commission classified the Agreement as an agreement to maintain clienteles and hence anti-competitive by object. 42 According to the applicants, the sole purpose of the Agreement was to ensure compliance with the exclusive arrangements contractually agreed between publican and brewer, which the Court of Justice has recognised as not having an anti-competitive object (Case C‑234/89 Delimitis v Henninger Bräu [1991] ECR I‑935). Brasserie Nationale adds that this objective of the Agreement can be deduced from each of the cases in which the Agreement was invoked, which are reported in the Decision. 43 With regard to the consideration that the benefits of the Agreement were reserved for national brewers (recital 62 of the Decision), the applicants claim that the Agreement was open to all the brewers operating in Luxembourg. They add that Mousel and Diekirch were not ejected from the Agreement as a result of their takeover by Interbrew. 44 According to the applicants, the machinery for exchanging information provided for in Article 5 of the Agreement made it possible to limit the scope of the Agreement to written ‘beer ties’. They assert that in the copy of the contract that was exchanged, commercially sensitive information was deleted. Brasserie Nationale adds that Article 4 of the Agreement merely expressed the commitment of the parties to respect exclusive arrangements. The term ‘guaranteed outlet’ used in that article simply means ‘tied’ to a brewer by virtue of a ‘beer tie’, as confirmed by the third paragraph of that article. 45 With regard to the agreements preceding the Agreement, mentioned in recital 60 of the Decision, the applicants maintain that their assessment in the Decision is distorted. They state that the agreements of 1980 and 1981 and the Agreement were aimed at ensuring contractually agreed exclusivity, unlike the agreements of 1975 and 1983. Brasserie Nationale further states that most of these agreements predate the EEC Treaty, that agreements subsequent to that Treaty bound only two of the parties, that among these latter agreements the 1980 agreement was ignored by the Commission, and that the only multilateral agreement dates from 1966, in other words before expiry of the transitional period, and was terminated long before the Agreement. 46 With regard to the remark of the director of the FBL referred to in recital 63 of the Decision (see paragraph 38 above), Brasserie Nationale disputes the authority of the director, in that the FBL has a limited mandate and that the profile of its director does not enable him to know the market. Moreover, his view on the validity of the Agreement is incorrect. In the opinion of Brasserie Nationale, since the Agreement was aimed only at ensuring compliance with exclusive agreements not involving the crossing of frontiers, it did not relate to imports or exports (Case 43/69 Bilger v Jehle [1970] ECR 127). Consequently, according to Brasserie Nationale, the Agreement was exempt from notification, pursuant to Article 4(2) of Regulation No 17, so that it remained valid until any finding of infringement was made. Wiltz and Battin also dispute the authority of the statement by the director of the FBL and submit that the Agreement did not relate to imports or exports. 47 The applicants then maintain that the Agreement was adopted for three reasons. Brasserie Nationale, for its part, relies on these reasons only as regards the second and third situations mentioned in the Decision, that is, the one in which the ‘beer tie’ was void or unenforceable and the one in which there was a valid ‘beer tie’, repeating that the first situation, namely where there was no ‘beer tie’, does not fall within the scope of the Agreement. 48 With regard to the first reason, the applicants claim that contracts containing a ‘beer tie’ were systematically annulled by Luxembourg courts on the grounds that prices and volumes were undetermined, on the basis of French case-law concerning similar provisions of the Civil Code. Brasserie Nationale adds that the Agreement was an alternative means of settling disputes which, in view of that case-law, disregarded the question of the validity of ‘beer ties’, and that it was for that reason that the words ‘irrespective of its legal validity … and/or its enforceability’ were included in Article 2 of the Agreement. 49 The applicants state that there was a risk that a contract containing a ‘beer tie’ would be declared void by the Luxembourg courts, whatever the origin of the dispute, as any civil proceedings, including those stemming from withdrawal from or non-performance of the contract, exposed the brewer concerned to that risk. Although the abovementioned French case-law was overturned in 1995, and this change was followed in Luxembourg by a single judgment of a court of first instance in March 1996, the applicants maintain that that single judgment was not sufficient to eliminate the risk in question. In their view, it was irrelevant whether the French case-law was followed by all or a majority of the courts. In reply to the arguments of the Commission, Brasserie Nationale adds that the fact that the overturning of the French case-law occurred in two stages has no bearing on the actual date of the overturning of the Luxembourg case-law, that it was necessary to wait for three or four years for a Luxembourg appeal judgment in a beer case to endorse the change in France, and that the conceivable ways of complying with the case-law in question were also subject to uncertainty and in any case were inappropriate to beer distribution. With regard to the addition proposed to express the fact that the Agreement was aimed at cases in which contracts were declared void for reasons other than the fact that prices and volumes were undetermined, Brasserie Nationale maintains that the fact that this addition was not formally included indicates precisely that it was not accepted by the parties. 50 As to the second reason, the applicants claim that a brewer that had concluded with a publican a new contract containing a ‘beer tie’ was at risk of being sued by another brewer for third-party complicity in the infringement of the publican’s obligations. According to the applicants, although under the abovementioned case-law on void contracts that risk was slight, it could lead to long and costly proceedings. Conversely, according to the applicants, although proceedings for third-party complicity could, in marginal cases, be a remedy for a brewer that was a victim of disloyalty on the part of a publican, this remedy necessitated a similar procedure if it was to be effective. 51 With regard to the third reason, the applicants maintain that the brewers did not have an effective judicial remedy to ensure that exclusive agreements were honoured. Correcting the shortcomings of national law is, in their view, a classic motive for recourse to private rules. Whether the Agreement is contrary to public policy is within the sole jurisdiction of the Luxembourg courts, so that it should be assumed to be lawful. 52 The applicants then claim that, far from restricting their freedom of action, they exercised it to ensure that contracts were honoured. Even supposing that the Agreement had a restrictive effect on competition that could be separated from that inherent in ‘beer ties’, in their opinion it was justified by the need to preserve commercial loyalty. Brasserie Nationale relies in this respect on the judgments in Cases 120/78 Rewe-Zentral (Cassis de Dijon) [1979] ECR 649 and C‑309/99 Wouters and Others [2002] ECR I‑1577. According to the applicants, the state of Luxembourg law cannot be a ‘frontier’ fixing the level of guarantee that they could grant themselves in order to ensure commercial loyalty. In addition, they seek to establish an analogy with Article 5(c) of the Code of Conduct of the Institute of Professional Representatives before the European Patent Office (‘the EPI’); they contend that in its decision that was the subject of the judgment in Case T‑144/99 Institute of Professional Representatives v Commission [2001] ECR II‑1087, paragraphs 89 and 90, the Commission acknowledged that it had no objection to that article. According to the applicants, the Agreement only prohibited a brewer from concluding a contract with a publican who was already tied to a competitor by a contract containing a ‘beer tie’ and entailed no prohibition where the commercial relationship had ended. 53 Furthermore, the applicants dispute the claim that the Agreement protected ‘inefficient brewer-operator relationships’ (recital 57 of the Decision). They contend that the concepts of validity and enforceability mentioned in Article 2 of the Agreement referred only to flaws in the contract at the time it was made and that the Agreement had neither the object nor the effect of prohibiting withdrawal in the event of serious failings on the part of the brewer towards the outlet operator. 54 With regard to the consideration that the Agreement was more restrictive than ‘beer ties’, because Article 4 prohibited ‘any sale of beer’ to an outlet tied to one of the parties (recital 56 of the Decision), the applicants state that the Agreement applied only to ‘pils’-type beers. Brasserie Nationale indicates that for a Luxembourg brewer the concept of beer related only to beers of this kind, adding that it was only well after the conclusion of the Agreement that Mousel and Diekirch began to distribute other types of beer. Wiltz and Battin maintain that Article 4 could only mean that it prevented the parties from supplying the beers that they produced or distributed, and these were in fact exclusively of the ‘pils’ type. 55 Brasserie Nationale submits, finally, that the system for exchanging information provided for in the Agreement bears no relationship to the one that was the subject of the judgments in Cases T‑34/92 Fiatagri and New Holland Ford v Commission [1994] ECR II‑905 and T‑35/92 John Deere v Commission [1994] ECR II‑957, which it says are the only judgments in which the Court of First Instance has imposed penalties for the exchange of information that does not concern prices or underpin another anti-competitive mechanism. 56 The Commission contends that this part of the first plea is not well founded. – Allegedly wrong classification of the Agreement as having the object of impeding the penetration of the Luxembourg on-trade (fourth part of the first plea) 57 The applicants claim that the Commission wrongly considered that the object of the Agreement was to impede the penetration of the Luxembourg on-trade by foreign brewers. 58 According to the applicants, the Agreement was designed merely to counter the breach of ‘beer ties’ by foreign brewers while maintaining the possibility for a Luxembourg brewer to respond successfully to the offer of a publican contemplating a contract with a foreign brewer. Moreover, in their view, the Agreement was justified by the exceptional situation in Luxembourg, in particular the imbalance in strength between Luxembourg and foreign brewers, and by the abnormal situation created by the disloyalty of publicans. Brasserie Nationale adds that, since the Commission does not contest the ‘beer ties’, it cannot attack them indirectly. Furthermore, the Agreement did not prevent foreign brewers from concluding contracts. Finally, the compensation mechanism provided for in the declaration of intent concerning foreign brewers did not attract particular criticism. 59 Brasserie Nationale maintains that the first paragraph of the declaration of intent concerning Battin actually encouraged the penetration of foreign beers into Luxembourg. The term ‘balance’ used in the second paragraph meant only a desire to keep open the possibility for domestic products to be on offer when an outlet was opened up to competition. 60 The applicants also state that Article 11 of the Agreement was never implemented. Brasserie Nationale adds that it had no dissuasive effect, nor was any sought. Wiltz and Battin add that Article 11 was only ancillary, as was acknowledged in recital 72 of the Decision. The possibility of termination provided for in the declaration of intent concerning Battin was therefore not, in their view, a restriction in itself either. 61 With regard to the statement by the director of the FBL reported in recital 68 of the Decision, the applicants repeat the argument that his authority can be disputed. Brasserie Nationale adds that the statement commits only the director himself and does not represent the opinion of Brasserie Nationale. 62 Finally, Brasserie Nationale maintains that the Decision is vitiated by contradictory reasoning, in that it accuses the parties of denying to foreign brewers advantages that are nevertheless judged to be inadmissible between national brewers. 63 The Commission contends that this part of the first plea is not well founded. – Failure to take sufficient account of the context of the Agreement in assessing its object (first part of the first plea) 64 The applicants claim that, when assessing the object of the Agreement, the Commission did not take sufficient account of its context. In their opinion, that error justifies annulment of the Decision, particularly as it was the source of serious misunderstandings in the interpretation of the Agreement. 65 The applicants maintain that, although it is not necessary to demonstrate the effects of a restrictive agreement by its object, the identification of a restrictive object requires analysis of the context (Joined Cases 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82 IAZ and Others v Commission [1983] ECR 3369, paragraphs 23 to 25). Brasserie Nationale also relies on Case 56/65 Société Technique Minière v Maschinenbau Ulm [1966] ECR 235, at 249-250, Joined Cases 29/83 and 30/83 CRAM and Rheinzink v Commission [1984] ECR 1679, paragraph 26, Wouters and Others, paragraph 97, Joined Cases T‑202/98, T‑204/98 and T‑207/98 Tate & Lyle and Others v Commission [2001] ECR II‑2035, paragraphs 44 to 53, and Case T‑112/99 M6 and Others v Commission [2001] ECR II‑2459, paragraph 76. 66 According to the applicants, with one exception, the actual context in which the effects of the Agreement unfolded was left out of the assessment of its object. With regard to that actual context, the applicants rely on the vitality of the sector concerned in terms of market shares, which differ widely from one brewer to another, and the sector’s openness to imports, which they consider to be unique in the Community. They point out that more than 33% of the beer consumed in Luxembourg is imported and emphasise the presence of major producers just across the borders. Brasserie Nationale also cites the existence of a large number of outlets not tied to the parties that can constitute fertile ground for additional competition between Luxembourg and foreign brewers. At the hearing it added that these outlets were tied to foreign brewers by exclusive purchasing contracts. 67 According to the applicants, none of the factors put forward in recitals 59 to 63 of the Decision to justify the Commission’s assessment of the object of the Agreement contains a description of its economic context, not even by reference to recitals 74 to 76, which have the purpose of establishing the appreciable nature of the restriction, a step in the reasoning that is distinct from that consisting in classifying the Agreement as restrictive by object. 68 In their view, the same goes for the classification of the restriction of competition in regard to foreign brewers (recitals 67 to 73 of the Decision). 69 The Commission contends that this part of the first plea is not well founded. Findings of the Court – Allegedly wrong classification of the Agreement as having the object of maintaining clienteles (third part of the first plea) 70 The Court will examine first the applicants’ arguments intended to cast doubt on several factual elements which the Commission took into account in the Decision in order to conclude that the Agreement had the object of maintaining clienteles. 71 First, as regards their objection to the statement that the Agreement prohibited any sale of beer to a publican tied to one of the parties (recital 56 of the Decision), it is sufficient to observe that Article 4 of the Agreement refers explicitly to ‘any sale of beer’. In the light of these clear terms, this argument must be rejected, as it is not supported by any specific evidence. 72 Second, the same applies to the claim that the concepts of validity and enforceability mentioned in Article 2 of the Agreement referred only to flaws in the contract at the time it was made. In fact, Article 2 does not provide for such a restriction, and this claim is not supported by any specific evidence. 73 Third, with regard to the argument that the system for exchanging information provided for in Article 5 of the Agreement made it possible to limit the scope of the Agreement to written ‘beer ties’, it is sufficient to note, as does the Commission, that this argument is belied by the fact that the Agreement was intended to be applicable in its full scope even where no ‘beer tie’ existed, as will be set out in the examination of the second part of this plea. 74 Fourth, the applicants criticise the account taken, in recital 60 of the Decision, of agreements that predated the Agreement. 75 It must first be observed that the agreements of 1980 and 1981 are not mentioned in the Decision. Hence, the argument that they are different from those of 1975 and 1983 is irrelevant. It must then be stated that the Commission took account of the agreements of 1966, 1975 and 1983 only in order to conclude that the interpretation of the Agreement could not be entirely dissociated from those agreements and that they were such as to cast doubt on the argument of legal uncertainty put forward by the parties to justify the Agreement. In relation to that conclusion, the assertions of Brasserie Nationale regarding those agreements are irrelevant. 76 Lastly, the applicants object to the taking into account of the remark of the director of the FBL referred to in recital 63 of the Decision concerning the protectionist spirit of the Agreement (see paragraph 38 above). 77 It must be noted, as does the Commission, that the director was an actor in and a privileged witness of the Agreement. For example, it is common ground that it was at a conciliation meeting between two of the parties that he made the remark in question. Moreover, Article 5 of the Agreement provided that a party could send him a copy of a request for information addressed to another party under that provision. The director was therefore given the role of conciliator by the parties. 78 With regard to the alleged incorrectness of this remark, in that the Agreement did not relate to imports or exports, it is sufficient to note that, in the light of the declarations of intent concerning Battin and concerning foreign brewers, the applicants cannot validly claim that the Agreement did not relate to imports or exports. The Bilger judgment, relied on to support this assertion, is irrelevant, in particular in that it concerned a vertical agreement, whereas the Agreement at issue was horizontal. 79 It follows that the applicants have not succeeded in casting doubt on any of the factual elements taken into account by the Commission in the Decision in order to conclude that the object of the Agreement was to maintain clienteles. 80 The other arguments adduced by the applicants to support this part of the first plea must be examined next. 81 As regards the three reasons which supposedly underpin the Agreement, referred to in paragraphs 47 to 51 above, it must be stated that, even if established, they are not such as to justify a restrictive arrangement with an anti-competitive object. It is unacceptable for undertakings to attempt to mitigate the effects of legal rules which they consider excessively unfavourable by entering into restrictive arrangements intended to offset those disadvantages on the pretext that they have created an imbalance detrimental to them (see, to that effect, Case T‑29/92 SPO and Others v Commission [1995] ECR II‑289, paragraph 256, in the context of the application of Article 81(3) EC, and Joined Cases C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P Limburgse Vinyl Maatschappij and Others v Commission [2002] ECR I‑8375, paragraph 487, with regard to a crisis in the market). It must be added that not only the applicants but all economic operators had to contend with the difficulties that the Agreement was allegedly intended to mitigate. 82 Moreover, as the Commission notes, it is clear from the file that, as will be shown in connection with the second part of this plea, the Agreement was intended to be applicable even where no ‘beer tie’ existed and that its object was not confined to remedying the three problems adduced by the applicants, to which reference is made in paragraphs 47 to 51 above. 83 In so far as the applicants’ arguments, as clarified at the hearing, must be understood to be that the purpose of the Agreement, in the face of the three problems mentioned above, was to restore a legal situation that complied with Regulation No 1984/83, it must be observed that the prohibition referred to in Article 4 of the Agreement goes significantly further than is permitted by Article 7(1) of that regulation. Moreover, that regulation permits only certain restrictions on competition in the vertical relationship between reseller and supplier (see in particular Articles 1 and 6), whereas the Agreement is a horizontal agreement. In any case, the applicants have not even attempted to demonstrate that a horizontal agreement was an indispensable means of resolving the problems that allegedly existed on the vertical plane. 84 The applicants then maintain that the sole purpose of the Agreement was to ensure compliance with the exclusive arrangements contractually agreed between outlet operator and brewer. In addition, according to them, the Agreement was justified by the need to preserve commercial loyalty. 85 Even supposing that those circumstances were established, the conclusion that the Agreement had the object of restricting competition within the common market cannot be invalidated by the supposed fact that it also pursued a legitimate object (see, to that effect, IAZ and Others v Commission, paragraph 25). The applicants cannot rely to any purpose on Delimitis, because that judgment was delivered in a case relating to vertical relationships, whereas the present case concerns a horizontal agreement. Moreover, the reference made by Brasserie Nationale to Cassis de Dijon and Wouters and Others must be rejected. Once it has been established that the object of an agreement constitutes, by its very nature, a restriction of competition, such as a sharing of clientele, that agreement cannot, by applying a rule of reason, be exempted from the requirements of Article 81(1) EC by virtue of the fact that it also pursued other objectives, such as those at issue in those judgments. 86 With regard to the argument based on Institute of Professional Representatives v Commission, it must be stated, first, that Article 5(c) of the Code of Conduct of the EPI contained only a prohibition on offering unsolicited services in respect of cases which were being handled by another representative (paragraph 89). Such a prohibition is far from comparable with those imposed by the Agreement. In the case referred to, the prohibition applied only to an initiative to solicit a client, whereas the Agreement prohibited the parties, in particular, from responding to a request to conclude a contract. Second, that prohibition was based primarily on reasons of professional etiquette, in contrast to the Agreement, which was aimed at parcelling out clienteles. This argument must therefore be rejected. 87 Finally, the applicants dispute the claim that the benefits of the Agreement were reserved to national brewers (recital 62 of the Decision). This objection is insufficiently substantiated. Although the applicants claim that the Agreement was open to all brewers operating in Luxembourg, it was not signed by a single foreign brewer. The argument that two Luxembourg brewers were not expelled from the Agreement following their takeover by a foreign brewer does not demonstrate that foreign brewers as such could join the Agreement. On the contrary, the provision in Article 11 for a party to the Agreement to be expelled if it came under the control of a foreign company or cooperated with a foreign brewer shows that the Agreement was supposed to be reserved exclusively to national brewers. The fact that this article was never implemented does not alter that finding. 88 It follows that none of the arguments put forward in support of the third part of the first plea can be accepted. That part must therefore be rejected. – Allegedly wrong classification of the Agreement as having the object of impeding the penetration of the Luxembourg on-trade (fourth part of the first plea) 89 In the declaration of intent concerning foreign brewers the parties reserved for each other the priority for canvassing and for the conclusion of a supply contract with a publican tied to one of them if he was preparing to conclude a contract with a foreign brewer. The declaration of intent concerning Battin provided for terminating the Agreement in respect of Battin if there were a change in the terms under which Battin distributed certain foreign beers. Finally, Article 11 of the Agreement provided for termination in the event of control by a foreign company or cooperation with a foreign brewer. 90 Moreover, as the Commission rightly points out, the machinery established by the declaration of intent concerning foreign brewers related only to a foreign brewer wishing to supply a Luxembourg publican but did not protect a foreign brewer whose Luxembourg customer was preparing to take supplies from a Luxembourg brewer. 91 In those circumstances, it must be concluded that the Commission did not err in law by considering that the object of the Agreement was to impede the penetration of the Luxembourg on-trade by foreign brewers. 92 None of the applicants’ arguments is such as to invalidate that conclusion. 93 First, as regards the argument that the Agreement was intended merely to counter the breach of ‘beer ties’ by foreign brewers, it must be observed at the outset that that argument is not based on fact, since the Agreement applied even where no ‘beer tie’ existed, as will be shown in connection with the second part of this plea. 94 Furthermore, it should be pointed out, as it was in connection with the rejection of the third part of this plea, that the circumstance adduced by the applicants, even if it were assumed to be correct, could not justify the restrictive object of the Agreement, as has just been found. 95 Lastly, by submitting that the Agreement was aimed at preserving the possibility for a Luxembourg brewer to respond to the offer of a publican contemplating a contract with a foreign brewer, the applicants themselves admit that the Agreement was restrictive by object. In that it preserved that possibility, by definition it changed the conditions of competition to the detriment of the foreign brewer concerned. 96 Second, the applicants claim that the Agreement was justified by the exceptional situation in Luxembourg and by the abnormal situation created by the disloyalty of outlet operators. In addition, they submit that Article 11 of the Agreement was never implemented. Brasserie Nationale adds that the Agreement did not prevent foreign brewers from concluding contracts. 97 With regard to all these arguments, it must be noted once again that, even if they were accepted, they could not justify the restrictive object of the Agreement that emerges from the factual evidence which is adduced by the Commission and not disputed by the applicants. More especially, the allegation that the Agreement did not prevent foreign brewers from concluding contracts is irrelevant, in that the Agreement had the object of restricting competition, so that there is no need to examine whether it also had the effect of restricting it (see, to that effect, Case T‑62/98 Volkswagen v Commission [2000] ECR II‑2707, paragraph 231). 98 Third, the applicants repeat the argument that the authority of the director of the FBL can be disputed. Brasserie Nationale adds that the director’s remark reported in recital 68 of the Decision commits only the director himself and does not represent the opinion of Brasserie Nationale. 99 The argument disputing the authority of the director of the FBL must be rejected for the reasons described in connection with the rejection of the preceding part of this plea. Moreover, as mentioned in recital 68 of the Decision, that remark was made at a conciliation meeting on the application of the Agreement. It should therefore be taken into account when making a legal assessment of the Agreement. In so doing, the Commission in no way considered that the remark represented the opinion of Brasserie Nationale. 100 Brasserie Nationale maintains, fourth, that the first paragraph of the declaration of intent concerning Battin actually encouraged the penetration of foreign beers into Luxembourg. It alleges that the term ‘balance’ used in the second paragraph meant only a desire to keep open the possibility for domestic products to be on offer when an outlet was opened up to competition. 101 In that regard, it is sufficient to note that, although that declaration of intent did allow Battin to distribute certain foreign beers, it nevertheless led to a substantial restriction of Battin’s freedom of action, and hence to a restriction of competition. 102 Finally, Brasserie Nationale maintains that the Decision is vitiated by contradictory reasoning, as it accuses the parties of denying to foreign brewers advantages that are elsewhere considered to be impermissible between national brewers. 103 Although extending the guarantee of ‘beer ties’ to foreign brewers was perhaps capable of reinforcing the restrictive nature of that guarantee, it remains a fact that Article 11 of the Agreement and the declaration of intent concerning Battin made it possible to exclude foreign brewers from the albeit unlawful ‘advantages’ of that guarantee in terms of the protection of clientele, and hence to impede their penetration of the Luxembourg on-trade. 104 It follows that the fourth part of the first plea must be rejected. – Failure to take sufficient account of the context of the Agreement in assessing its object (first part of the first plea) 105 Recital 47 of the Decision, entitled ‘Restriction of competition by object’, states that the Agreement had the object, first, of maintaining the parties’ respective clienteles in the Luxembourg on-trade and, second, of impeding penetration by foreign brewers. That recital refers to recitals 48 to 66 of the Decision with regard to the first of these objects and to recitals 67 to 73 with regard to the second. 106 It thus follows from the scheme of the Decision that, contrary to the inference underlying the applicants’ arguments, the identification of the object of the Agreement is not confined to recitals 59 to 62 but derives from recitals 47 to 73 taken as a whole. 107 The mere reading of those recitals as a whole reveals that the applicants cannot validly claim that the context of the Agreement was disregarded in the assessment of its object. Reference is made in this regard to the summary of recitals 48 to 73 of the Decision in paragraphs 30 to 40 above. 108 Furthermore, the contextual factors that, according to the applicants, the Commission did not take sufficiently into account in assessing the object of the Agreement are the vitality of the sector concerned in terms of market shares, the sector’s unique openness to imports, and the existence of a large number of outlets not tied to the parties. However, these contextual factors relate not to the object of the Agreement but to its effects. It is settled case-law that the Commission is not required to examine the effects of an agreement that is anti-competitive by object (see, to that effect, Volkswagen v Commission, paragraph 231). That is not disputed by the applicants, who recognise that it is unnecessary to demonstrate the effects of an agreement that is restrictive by object. 109 It should be added that the applicants’ allegations that the Commission did not take sufficient account of the contextual elements are not well founded. In paragraphs 23 to 25 of the judgment in IAZ and Others v Commission, on which the applicants seek to rely, ‘the content [of the agreement at issue in that case], its origin and the circumstances in which it was implemented’ had been taken into account. These are precisely the kind of elements that the Commission took into account to reach the conclusion that the Agreement was restrictive by object. In that regard, reference is again made to the abovementioned summary of recitals 48 to 73 of the Decision. 110 It follows that the first part of the first plea must be rejected. Second part of the first plea, alleging that the Commission wrongly concluded that the Agreement applied where no ‘beer tie’ existed The contested decision 111 In the Decision the Commission considered that, according to the minutes of the meeting of the FBL on 7 October 1986, as amended by those of the meeting of the FBL on 2 December 1986, the parties agreed to interpret the term ‘beer tie’ more widely than in Article 2 of the Agreement. According to the Decision, this interpretation was confirmed by a letter dated 23 October 1991 from Wiltz to the FBL (recital 9). Arguments of the parties 112 The applicants maintain that the Commission wrongly concluded that the Agreement extended to cases where no ‘beer tie’ had been duly concluded and was in force. 113 According to the applicants, although an agreement may derive from a document other than a formal text, it is still necessary to verify whether it is the ‘faithful expression of the joint intention of the parties’ (Case 41/69 ACF Chemiefarma v Commission [1970] ECR 661, paragraphs 110 to 114, and Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck and Others v Commission [1980] ECR 3125, paragraph 86). They assert, however, that no such intention existed in the present case. They observe, first, that the minutes of the meeting of the FBL on 7 October 1986, referred to in recital 9 of the Decision, state that ‘the three documents held over … [were] approved and [would be] signed at the next meeting’, to which the minutes of the meeting of the FBL on 2 December 1986, also referred to in recital 9 of the Decision, attest when they state that ‘the [parties] proceed[ed] to sign [those documents]’. According to the applicants, such signature is thus a formality without which no joint intention of the parties can be identified. They note that neither of the two minutes mentioned above record such a signature as regards the interpretation of the Agreement as it emerges from the two minutes, whereas that interpretation cannot be dissociated from the three documents referred to above. Furthermore, they observe that it is clear from the minutes of the meeting of the FBL on 2 December 1986 that the documents mentioned in paragraph 2 of the minutes of the preceding meeting of the FBL had been amended. That document was therefore not approved after either the first or the second meeting. Lastly, the applicants note that the wording of the letter of 23 October 1991 from Wiltz to the FBL, referred to in recital 9 of the Decision, is headed ‘Proposal’. They add that it contains the two interpretative indents featuring in the minutes referred to above, with shortened and improved wordings. According to the applicants, Wiltz would have had no interest in making this proposal if the minutes in question already reflected the disputed broader interpretation. 114 With regard to the alleged admission by Wiltz of the disputed broader interpretation, the applicants reply that Wiltz used the conditional mood in the declaration concerned. With regard to the alleged admission of that broader interpretation by Brasserie Nationale, the latter replies that in the declaration concerned it merely indicated the origin of the proposal for such an extension, and that the expressions ‘it agreed to sign’ and ‘[i]t did not bother [it] to sign’ only indicated its readiness to sign in the future. 115 Brasserie Nationale also states, with reference to correspondence in the file, that no dispute between the parties had ever arisen where there was no signed contract. 116 Lastly, Brasserie Nationale claims that the Commission itself recognised that the Agreement did not apply to cases where there was no ‘beer tie’, as recital 92 of the Decision states that ‘the scope of the infringement [was] limited … only to those outlets tied to the parties by an exclusive purchasing clause’. 117 The Commission contends that this part of the first plea is not well founded. Findings of the Court 118 It is established case-law that, for there to be an agreement within the meaning of Article 81(1) EC, it is sufficient that the undertakings in question should have expressed their joint intention to conduct themselves on the market in a specific way (see, to that effect, ACF Chemiefarma v Commission, paragraph 112, Van Landewyck and Others v Commission, paragraph 86, Case T‑7/89 Hercules Chemicals v Commission [1991] ECR II‑1711, paragraph 256, and Case T‑41/96 Bayer v Commission [2000] ECR II‑3383, paragraph 67). As regards the form in which that common intention is expressed, it is sufficient for a stipulation to be the expression of the parties’ intention to behave on the market in accordance with its terms (see, to that effect, ACF Chemiefarma v Commission, paragraph 112, Van Landewyck and Others v Commission, paragraph 86, and Bayer v Commission, paragraph 68). 119 It follows that the concept of an agreement within the meaning of Article 81(1) EC, as interpreted by the case-law, centres round the existence of a concurrence of wills between at least two parties, the form in which it is manifested being unimportant so long as it constitutes the faithful expression of the parties’ intention (Bayer v Commission, paragraph 69). 120 In the present case, the minutes of the meeting of the FBL on 7 October 1986, referred to above, state as follows: ‘2. Beer tie The three documents held over … are approved and will be signed at the next meeting. In addition, it is agreed that the following will be accepted and treated in the same way as a “beer tie”: – the transaction consisting of taking out a lease and contributing financially to fitting out of a café, without a “beer tie” being expressly mentioned, – where a brewer takes over a drinks outlet licence and invests funds, without a “beer tie” being expressly mentioned. These two interpretations are an integral part of the existing provisions relating to this matter.’ 121 The minutes of the meeting of the FBL of 2 December 1986, mentioned above, state as follows (the passages are reproduced as in the original): ‘1. The minutes of the meeting of 7 October 1986 call for the following amendments: … Point 2) – 1st indent – “the transaction consisting of taking out a lease and contributing financially to fitting out of a café, without a ‘beer tie’ being expressly mentioned, e.g. brewer X leases a building and contributes to the cost of its refurbishment for that purpose but does not, or does not manage to, enter into an obligation with the owner.” 2nd indent will read as follows: – the taking over of a drinks outlet licence by a brewer, without a “beer tie” being expressly mentioned. 2. The brewers proceed to sign [the three documents mentioned in point 2 of the minutes of the meeting of 7 October 1986]. All the brewers have received a copy of these signed documents, the originals of which will be deposited with the [FBL]. These documents are confidential.’ 122 The letter of 23 October 1991 from Wiltz to the FBL, mentioned above, reads as follows: ‘Proposal: In respect of Article 2 of the Agreement, the brewers agree to accept and to treat in the same way as a “beer tie”: – the transaction consisting of taking out a lease, – the provision by a brewer, on whatever basis, of a drinks outlet licence.’ 123 It must therefore be examined whether, in the light of the factors adduced by the applicants, the Commission established to the requisite legal standard that a concurrence of wills existed among the parties on the application of the Agreement even where no ‘beer tie’ had been duly concluded and was in force. 124 The minutes of the meeting of the FBL on 7 October 1986 explicitly state that the extension of the scope of the Agreement mentioned therein had been ‘agreed’ and ‘[was] an integral part of the existing provisions relating to this matter.’ Neither these minutes nor those of the meeting of the FBL on 2 December 1986 provided for that agreement to be formalised in any manner. To that extent, the fact that the first minutes also provided that certain documents to which they referred ‘[were] approved and [would] be signed’ is of no relevance. Similarly, the fact that the second minutes contain (relatively minor) amendments to the text contained in the first minutes does not invalidate the agreement reached between the parties precisely with regard to the text so amended. 125 Furthermore, as recital 29 of the Decision states, both Brasserie Nationale and Wiltz admitted that the Agreement also applied to certain brewer-publican relations where there was no supply contract or ‘beer tie’ at all. 126 Indeed, in its reply to the questions put by the Commission after its hearing, Brasserie Nationale stated, with regard to the situation in which a brewer takes out a lease and provides financing but there is no contract containing a ‘beer tie’: ‘In this case, the 1986 documents [that is, the two sets of minutes referred to above] say, it must also be considered that there is a “beer tie” within the meaning of the Agreement. That clause is, it has to be admitted, surprising a priori, since no brewer invests without a contract … That having been said, this implausible clause has never … been implemented. In reality, what was referred to was the absurd hypothesis imagined by … The working hypothesis of that person was obviously absurd, but as [Brasserie Nationale] had none of the intentions ascribed to it, it agreed to sign the text in question. … It did not bother [Brasserie Nationale] to sign, because it had no intention of acting in accordance with the hypothesis referred to in the clause in question …’. 127 Wiltz, for its part, stated as follows in its reply to the statement of objections: ‘The [Agreement] could at most be considered in this way on the basis of the interpretation of the “beer tie” terms agreed between the parties at the [meetings of the FBL] on 7 October and 2 December 1986, but there too the sole and legitimate aim was to be sure of getting the necessary information to prevent legal uncertainty if heavy investment was involved.’ 128 In that regard, the applicants’ argument that in its statement cited in the preceding paragraph Wiltz used the conditional mood must be rejected. In that statement Wiltz explicitly referred to the ‘interpretation of the “beer tie” terms agreed between the parties’. 129 Brasserie Nationale further maintains that, in its statement cited in paragraph 126 above, it merely indicated the origin of the proposal to extend the scope of the Agreement to cases in which there was no ‘beer tie’ and that the expressions ‘it agreed to sign’ and ‘[i]t did not bother [it] to sign’ merely signalled its readiness to sign the proposal in the future. 130 Those arguments must also be rejected. In the circumstances of the case, the statement cited above cannot invalidate the finding that Brasserie Nationale consented to the extension of the scope of the Agreement following the meetings of 7 October and 2 December 1986. It is of little relevance who originated the proposal to extend the scope of the Agreement, since a concurrence of wills can be established (see, to that effect, Cases 19/77 Miller v Commission [1978] ECR 131, paragraph 7, and T‑77/92 Parker Pen v Commission [1994] ECR II‑549, paragraph 37). 131 In any event, if Brasserie Nationale did not accept the extension of the scope of the Agreement, it was up to that undertaking to distance itself from the new interpretation of ‘beer ties’ (see, to that effect, Joined Cases T‑25/95, T‑26/95, T‑30/95 to T‑32/95, T‑34/95 to T‑39/95, T‑42/95 to T‑46/95, T‑48/95, T‑50/95 to T‑65/95, T‑68/95 to T‑71/95, T‑87/95, T‑88/95, T‑103/95 and T‑104/95 Cimenteries CBR and Others v Commission [2000] ECR II‑491, paragraph 1353 and the case-law cited). However, it is not disputed that it did not do so. 132 Furthermore, if the extension of the scope of the Agreement had not been decided among the parties, logically Brasserie Nationale would not have relied, in its reply to the Commission, solely on the fact that the extension had not been applied. 133 As to the argument based on the letter from Wiltz, referred to above, it must be considered that Wiltz may well have made the proposal mentioned in that letter not for the reason put forward by the applicants but out of a desire to amend the text resulting from the two minutes referred to above. Furthermore, contrary to the applicants’ assertions, this proposal from Wiltz contains more than stylistic improvements. For example, according to the proposal, ‘the transaction consisting of taking out a lease’ is to be treated in the same way as a ‘beer tie’, whereas the minutes of the meeting of the FBL on 2 December 1986 provided that ‘the transaction consisting of taking out a lease and contributing financially to fitting out of a café’ is to be treated in the same way as such a tie. That amendment cannot be regarded as purely stylistic. 134 Lastly, with regard to the supposed recognition by the Commission that the Agreement did not apply where there was no ‘beer tie’, it must be noted that, although the phraseology used in recital 92 of the Decision – according to which ‘the scope of the infringement is limited … only to those outlets tied to the parties by an exclusive purchasing clause’ – is perhaps infelicitous, a simple combined reading of recitals 9 and 48 to 63, and especially of the reference made in recital 50 to recital 9, shows that the Commission was of the opinion that the Agreement also applied where there was no ‘beer tie’. Moreover, it should be recalled that in this part of the first plea the applicants dispute that opinion. They cannot therefore validly claim that the Commission was of a different opinion. 135 In the light of the foregoing, the applicants have not adduced sufficient evidence to call into question the Commission’s finding that a concurrence of wills existed among the parties on the application of the Agreement, even where there was no ‘beer tie’ duly concluded and in force. 136 The second part of the first plea must therefore be rejected. Fifth part of the first plea, alleging that the Agreement had no appreciable effect on competition The contested decision 137 The Decision states that the Agreement was liable to restrict competition appreciably in the Luxembourg on-trade. In that regard, it notes first that the parties limited the scope of the Agreement to the Luxembourg on-trade, which indicates that they considered their position in this sector to be significant enough, and the conditions of competition there to be sufficiently different from those in other sectors or in neighbouring countries, to ensure that the Agreement was effective. Second, it points out that, taking into account their own production and their distribution of imported beers, the parties controlled approximately 85% of beer sales in the sector concerned, and that more than half the drinks outlets in Luxembourg were tied to them by a ‘beer tie’ (recitals 74 to 76). Arguments of the parties 138 The applicants maintain that the Commission’s conclusion that there was an appreciable restriction on competition was incorrect and that the statement of reasons was inadequate. They observe that the Commission did not define the relevant market. They then claim that the limitation of the scope of the Agreement to the on-trade demonstrates nothing but merely corresponds to the extent of the problem identified by the parties, in view of which they were likely to cooperate. Moreover, according to the applicants, although the share of 85% of the volume of beer distributed by the parties may appear high, the proportion of 40 to 45% of outlets open to other brewers did not justify a finding that the restriction was appreciable. Furthermore, the fact that the restriction regarding foreign brewers was not implemented should lead to the conclusion that the restriction was not appreciable. 139 The Commission contends that this part of the first plea is not well founded. Findings of the Court – Alleged error of assessment 140 In this regard, it suffices to recall that undertakings which conclude an agreement whose purpose is to restrict competition cannot, in principle, avoid the application of Article 81(1) EC by claiming that their agreement should not have an appreciable effect on competition (Case T‑44/00 Mannesmannröhren-Werke v Commission [2004] ECR II‑0000, paragraphs 130 and 196). 141 As the object of the Agreement was to maintain the parties’ respective clienteles in the Luxembourg on-trade and to impede penetration of that sector by foreign brewers, its existence made sense only if its object was to restrict competition in this sector appreciably, that is to say in a manner commercially useful to them (see, by analogy, Mannesmannröhren-Werke v Commission, paragraph 131). – Alleged failure to state reasons 142 It is settled case-law that the statement of reasons required by Article 253 EC must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Community court to exercise its power of review (Case C‑367/95 P Commission v Sytraval and Brink’s France [1998] ECR I‑1719, paragraph 63). 143 Having regard to the information referred to in recitals 74 to 76 of the Decision, Brasserie Nationale was fully able to put forward arguments that the Commission’s conclusion regarding the appreciable nature of the restriction on competition was unlawful. 144 Furthermore, with regard to the complaint about the failure to define the market in question, suffice it to say that there is an obligation on the Commission to define the relevant market in a decision applying Article 81 EC only where it is impossible, without such a definition, to determine whether the agreement, decision by an association of undertakings or concerted practice at issue is liable to affect trade between Member States and has as its object or effect the prevention, restriction or distortion of competition within the common market (Case T‑213/00 CMA CGM and Others v Commission [2003] ECR II‑913, paragraph 206). Such a situation does not arise in the present case, as is clear in particular from the rejection of the third and fourth parts of this plea. 145 It follows that the fifth part of the first plea must be rejected. 146 As all the parts of the first plea have been rejected, the first plea must be rejected in its entirety, so that it is necessary to examine the second plea. 2. Second plea: infringement of Article 15(2) of Regulation No 17 and non‑compliance with the obligation to state reasons enshrined in Article 253 EC 147 The second plea is divided into three parts, claiming, first, that the infringement was not intentional; second, that an error of assessment was made with regard to the gravity and duration of the infringement; and, third, that the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) CS (OJ 1998 C 9, p. 3, ‘the Guidelines’) with regard to mitigating circumstances were not applied. The plea in Case T‑49/02 also includes a fourth part, alleging failure to state reasons for the initial base amount used by the Commission in calculating the fines. First part of the second plea, claiming that the infringement was not committed intentionally The contested decision 148 The Decision states that an infringement of the Community competition rules is regarded as being committed intentionally if the parties are aware that the object or effect of the act in question is to restrict competition. It is not essential that they should also be aware that they are infringing a provision of the EC Treaty. As regards the provisions relating to foreign brewers, the Commission considered that the parties could not have been unaware of their restrictive object. Indeed, according to the Commission, they had not sought to justify those provisions. As to the restrictions of competition between the parties resulting from their mutual observance of ‘beer ties’, it was possible that when the Agreement was concluded, and up until March 1996, the parties were motivated by the legal uncertainty created by the Luxembourg case-law relating to undetermined prices or quantities. However, that justification had disappeared in March 1996 when that case-law was overturned. Consequently, the Commission concluded that the parties committed the infringement intentionally, even if the Luxembourg case-law may have created a doubt about the illegal nature of certain clauses during a particular period (recitals 89 and 90). Arguments of the parties 149 The applicants submit that the Commission was wrong to conclude that they had committed the infringement intentionally. 150 With regard to the restriction involving the maintenance of clienteles, the applicants allege, first, that the Commission itself recognises that Luxembourg case-law could create a doubt as to whether that restriction was an infringement. The applicants repeat the assertion that that justification should be accepted not until 1996 but until mid-1998, and add that, if the Commission’s reasoning in the Decision is followed, it was only in the last two years of the duration of the Agreement that an ‘intentional’ infringement could have been committed. Second, according to the applicants, in the Decision the Commission does not definitively dispute their contention that the sole object of the Agreement was to ensure that ‘beer ties’ were honoured. They assert that that object is lawful (Delimitis). 151 Moreover, the applicants claim that they are not of such size that their ignorance of the law cannot be accepted. They maintain that as recital 96 of the Decision classifies Brasserie de Luxembourg as a large undertaking, the contrary inference is that this description is not applicable to any of the other parties. Moreover, they were never aware of the restriction on trade between Member States. Brasserie Nationale adds, with regard to the latter point, that the Commission has not proved the contrary. 152 The applicants also claim that none of the parties sought to obstruct foreign brewers. Brasserie Nationale adds that none of the parties considered that the objective of preserving the possibility of domestic competition could be regarded as anti-competitive. The reservation expressed by Diekirch with regard to the lawfulness of the Agreement was merely a conventional formula used in contact letters during a dispute. 153 With regard to the statement of reasons in the Decision on the question of whether the applicants acted intentionally, Brasserie Nationale claims that the argument that, as far as the provisions relating to foreign brewers were concerned, ‘the parties could not have been unaware of their restrictive object’ is a circular argument and does not constitute proof, and that the argument that ‘the parties have not sought to justify these provisions’ is incorrect. According to Brasserie Nationale, these two accusations are not sufficient for the reasoning in the Decision to be accepted as meeting the requirements as to clarity and precision. Wiltz and Battin claim that the statement of reasons contained in recital 89 of the Decision does not constitute proof. In their view, Article 253 EC has therefore not been complied with. 154 The Commission contends that this part of the second plea is not well founded. Findings of the Court – Alleged error of assessment 155 It is settled case-law that for an infringement of the competition rules in the EC Treaty to be regarded as having been committed intentionally, it is not necessary that the undertaking was aware that it was restricting competition; it is sufficient that it could not have been unaware that the object of its conduct was the restriction of competition, and it is unimportant whether the undertaking was aware that it was infringing Article 81 EC (Miller v Commission, paragraph 18, and Case T‑143/89 Ferriere Nord v Commission [1995] ECR II‑917, paragraph 41 and the case-law cited). 156 As is clear from the rejection of the third and fourth parts of the first plea, the Commission could legitimately conclude that the object of the Agreement was to maintain the parties’ clienteles in the Luxembourg on-trade and to impede the penetration of that sector by foreign brewers. The Agreement therefore amounts, first, to a market-sharing arrangement and, second, to a partitioning of the common market. In those circumstances, the Commission could consider, without committing an error, that the applicants could not be unaware that the object of the Agreement was to restrict competition. 157 From that perspective, the applicants’ arguments that they are not of such size that their ignorance of the law cannot be accepted, that they were never aware that the Agreement restricted trade between Member States, that none of the parties sought to obstruct foreign brewers and that none of the parties considered that the objective of preserving the possibility of domestic competition could be regarded as anti-competitive are all necessarily irrelevant in the present case. 158 The applicants further contend that in the Decision the Commission itself recognised that Luxembourg case-law at that time could create a doubt as to whether the restriction concerning the maintenance of clienteles was an infringement. As the Commission states, even if that doubt were well founded, it has no relevance with respect to the intentional nature of the restriction of competition, precisely because it relates not to the object of the Agreement, which was to restrict competition, but, at most, to whether it was an infringement. As is clear from the case-law cited in paragraph 155 above, the concept of intent referred to in Article 15(2) of Regulation No 17 relates only to the restrictive object of the agreement concerned and not to whether it is an infringement of Article 81(1) EC. 159 Finally, as regards the argument that, as recital 96 of the Decision classifies Brasserie de Luxembourg as a large undertaking, the contrary inference is that this description does not apply to the other parties, it must be noted that, as the Commission points out, the size of Brasserie de Luxembourg was mentioned only to justify the use of the multiplier applied to the latter as a deterrent. That assessment of the size of the undertaking is therefore of no relevance for the examination of the intentional nature of the restriction of competition. – Alleged failure to state reasons 160 In the light of the requirements as to stating reasons referred to in Article 253 EC and recalled in paragraph 140 above, recitals 89 and 90 of the Decision disclose in a clear and unequivocal fashion the reasons why the Commission concluded that the restriction of competition was intentional. 161 It follows that the first part of the second plea must be rejected. Second part of the second plea, alleging an error of assessment as to the gravity and duration of the infringement The contested decision 162 With regard to the gravity of the infringement, the Decision states on the one hand that, as the object of the Agreement was to maintain the parties’ clienteles and to impede penetration of the market by foreign brewers, the infringement is one of the most serious that could be committed. On the other hand, it considers that the scope of the infringement is limited to the on-trade and only to those outlets tied to the parties by an exclusive purchasing clause, that the provisions concerning foreign brewers were not implemented, and that the Luxembourg beer market is the smallest in the Community. For all of these reasons, the infringement is finally classified as serious (recitals 92 and 93). 163 With regard to the duration of the infringement, the Decision notes in particular that it ceased on 16 February 2000, the date on which Interbrew informed the Commission that it had instructed its subsidiaries Mousel and Diekirch to stop implementing the Agreement (recital 86). From this it is concluded that, as the infringement lasted for more than 14 years (1985-2000), it is of long duration (recital 97). Arguments of the parties 164 The applicants maintain that the Commission wrongly assessed the gravity and duration of the infringement. 165 With regard to the gravity of the infringement, they claim that, under the Guidelines, minor infringements are defined as ‘trade restrictions … but with a limited market impact and affecting only a substantial but relatively limited part of the Community market’ and serious infringements are defined as horizontal or vertical restrictions of the same type, but ‘more rigorously applied, with a wider market impact, and with effects in extensive areas of the common market’. According to the applicants, the infringement at issue should have been classified as minor, in that recital 92 of the Decision states that the provisions affecting foreign brewers were not implemented, that the Agreement affected only the Luxembourg on-trade, and that the information exchanged was very limited. Brasserie Nationale repeats its assertion that the Agreement was exempt from notification. 166 With regard to the duration of the infringement, the applicants state that the provisions relating to foreign brewers were not implemented. 167 The Commission contends that this part of the second plea is not well founded. Findings of the Court – Gravity of the infringement 168 The Guidelines state, in particular, that in assessing the gravity of the infringement, account must be taken of its nature, its actual impact on the market, where this can be measured, and the size of the relevant geographic market. Infringements are thus put into three categories, distinguishing between minor infringements, serious infringements and very serious infringements (first and second paragraphs of Section 1.A). 169 It should be noted that the Guidelines do not prejudge the assessment of the fine by the Community judicature, which has unlimited jurisdiction in this respect under Article 17 of Regulation No 17. In addition, while the Commission may determine the amount of the fine in accordance with the method prescribed by the Guidelines, it must remain within the context of the penalties defined by Article 15 of Regulation No 17 (Case T‑368/00 General Motors Nederland and Opel Nederland v Commission [2003] ECR II‑4491, paragraph 188). 170 It should be recalled that the gravity of infringements has to be determined by reference to numerous factors, such as the particular circumstances of the case, its context and the dissuasive effect of fines, without there being any binding or exhaustive list of the criteria which must be applied. In addition, consistent case-law shows that, in the context of Regulation No 17, the Commission has a wide margin of discretion in fixing the amount of fines in order to steer the conduct of undertakings towards compliance with the competition rules. The Court of First Instance is, however, under a duty to verify whether the amount of the fine imposed is proportionate in relation to the gravity and duration of the infringement, and to weigh the gravity of the infringement and the circumstances invoked by the applicant (Case T‑229/94 Deutsche Bahn v Commission [1997] ECR II‑1689, paragraph 127, and General Motors Nederland and Opel Nederland v Commission, paragraph 189). 171 In the present case, the Commission followed a two-stage reasoning in the Decision, but without referring explicitly to the Guidelines. 172 With regard to the first stage of the reasoning, it should be recalled that, as stated in the context of the examination of the third and fourth parts of the first plea, the Agreement amounts to a market-sharing arrangement and, in addition, to a partitioning of the common market. 173 As regards the market-sharing arrangement, agreements of this type are among the examples of agreements explicitly declared to be incompatible with the common market in Article 81(1)(c) EC. They are categorised in the case-law as obvious restrictions of competition (Joined Cases T‑374/94, T‑375/94, T‑384/94 and T‑388/94 European Night Services and Others v Commission [1998] ECR II‑3141, paragraph 136). 174 As regards the partitioning of the common market, it should be recalled that such a patent infringement of competition law is, by its nature, particularly serious. It goes against the most fundamental aims of the Community and, in particular, the accomplishment of the single market (see, to that effect, Case T‑9/92 Peugeot v Commission [1993] ECR II‑493, paragraph 42, and General Motors Nederland and Opel Nederland v Commission, paragraph 191). 175 In these circumstances, the Commission was right to consider, in the first stage of its reasoning, that the Agreement constituted one of the most serious infringements of Article 81 EC. 176 With regard to the second stage of the reasoning, it is settled case-law that a geographical market of national dimension corresponds to a substantial part of the common market (Case 322/81 Michelin v Commission [1983] ECR 3461, paragraph 28, and Deutsche Bahn v Commission, paragraph 58). 177 As it is not disputed that the infringement at issue relates to the Luxembourg on-trade as a whole, it covers a substantial part of the common market. 178 Moreover, in the Guidelines the Commission indicates that very serious infringements are ‘generally … horizontal restrictions such as price cartels and market-sharing quotas, or other practices which jeopardise the proper functioning of the single market, such as the partitioning of national markets’ (third indent of the second paragraph of Section 1.A). It follows from this indicative description that agreements or concerted practices involving in particular, as in the present case, the parcelling out of clienteles on the one hand and the partitioning of the common market on the other may warrant being classified as very serious solely on the basis of their nature, without it being necessary for such conduct to cover a particular geographical area or have a particular impact. That conclusion is corroborated by the fact that, while the indicative description of serious infringements mentions that ‘these will more often than not be horizontal or vertical restrictions … but more rigorously applied, with a wider market impact, and with effects in extensive areas of the common market’, that of very serious infringements does not mention any requirement as to the actual market impact or the effects produced in a particular geographical area. 179 It follows that the classification of the present infringement as serious rather than very serious, as stated in the Decision, is already less strict by comparison with the criteria generally applied for fixing the amount of fines in cases of agreements aimed at sharing the market and, furthermore, partitioning the common market (see, to that effect, Tate & Lyle and Others v Commission, confirmed by the judgment in Case C‑359/01 P British Sugar v Commission [2004] ECR I‑4933, paragraph 103). 180 Moreover, in the first indent of the second paragraph of Section 1.A of the Guidelines the Commission states that minor infringements ‘might be trade restrictions, usually of a vertical nature, but with a limited market impact and affecting only a substantial but relatively limited part of the Community market’. 181 A horizontal agreement covering the entire territory of a Member State and with the object both of dividing the market and of partitioning the common market cannot be classified as minor within the meaning of the Guidelines. 182 The fact that the second infringement identified was not implemented does not alter that finding. As recalled in paragraph 174, such a restriction is an infringement described in Article 81 EC and, more broadly, an infringement of the objectives of the Community. 183 For all of these reasons, it must be held that, by finally classifying the present infringement as serious, the Commission did not infringe the applicants’ rights under Community law. – Duration of the infringement 184 It suffices to state that, even if it were established as fact that the provisions of the Agreement relating to foreign brewers were not implemented, that fact is irrelevant. 185 Since the Commission was under no obligation to prove the effects of the agreement in question, as it had as its object the restriction of competition, it is irrelevant for calculating the duration of the infringement whether or not an aspect of the agreement at issue was implemented. To calculate the duration of an infringement the object of which is to restrict competition, it is necessary merely to determine the period during which the agreement existed, that is, the time between the date on which it was entered into and the date on which it was terminated (CMA CGM and Others v Commission, paragraph 280). 186 It follows from the foregoing that the second part of the second plea must be rejected. Third part of the second plea, alleging failure to apply the Guidelines with regard to mitigating circumstances The contested decision 187 In the Decision it is considered that the doubt which the Luxembourg case-law of the time may have created until March 1996 as to whether the restrictions relating to the mutual observance of ‘beer ties’ constituted an infringement justifies a 20% reduction in the amount of the fine (recital 100). Arguments of the parties 188 In support of this part of the plea, the applicants submit, first, that the Commission was wrong to recognise the mitigating circumstance resulting from the doubt created by the abovementioned Luxembourg case-law only up to March 1996, as that date cannot be regarded as the final date of the risk that gave rise to the Agreement. Brasserie Nationale adds that the possibility of appeal and of diverging case-law justifies that that doubt be recognised as a mitigating circumstance until the termination of the Agreement, or at the very least until the expiry of the average period for processing an appeal in a Member State such as Luxembourg, that is to say three years. In those circumstances, according to Brasserie Nationale, a reduction of at least 40% in the fine is justified. 189 Second, the applicants claim that the mitigating circumstances listed in the Guidelines include the ‘Non-implementation in practice of the offending agreements or practices’ (third indent of Section 3). Consequently, the non-implementation of the provisions of the Agreement with regard to foreign brewers justifies an additional reduction of the amount of the fines. 190 The Commission contends that this part of the second plea is not well founded. Findings of the Court 191 With regard to the applicants’ first argument, it must be recalled that the Commission considered that the problem of legal uncertainty raised by the parties did not merit a derogation from Article 81(1) EC (recital 62). As the Court has found when examining the third part of the first plea, that consideration is not wrong, as such a concern cannot justify a restrictive practice with an anti-competitive object. 192 Since that problem did not justify a restrictive practice of that kind, it cannot be taken into account as a mitigating circumstance warranting a reduction in the fine imposed because of that restrictive practice. 193 The problem of legal uncertainty raised by the parties cannot justify the recognition of reasonable doubt as to whether the anti-competitive conduct in the present case was an infringement, within the meaning of Section 3 of the Guidelines, because, as has been found above, the Agreement constituted an agreement with the object of sharing the market and, in addition, partitioning the common market. 194 It follows that, by reducing the applicants’ fine by 20% on account of that doubt, the Commission did not infringe their rights under Community law. 195 As regards the applicants’ second argument, the second indent of Section 3 of the Guidelines, mentioned above, may not be interpreted as referring to the case in which an agreement as a whole is not implemented, regardless of the conduct of each undertaking, but must be understood as a circumstance based on the individual conduct of each undertaking. 196 The applicants adduce no evidence from which it may be concluded that they should have had the benefit of the mitigating circumstance that the Agreement was not implemented in practice, pursuant to the second indent of Section 3 of the Guidelines, in other words evidence demonstrating that they actually desisted from implementing the agreement by behaving competitively in the market. 197 It follows from the foregoing that the third part of the second plea must be rejected. Fourth part of the second plea (raised only in Case T‑49/02), alleging the failure to state reasons for the initial basic amount used by the Commission for calculating the fines The contested decision 198 In the Decision, the infringement is classified as serious, for the combination of reasons described above. The Commission considered that it was also necessary to take account of the effective economic capacity of the parties to cause damage, while setting the amount of the fine at a level which ensures that it has a sufficiently deterrent effect, and to apply weightings to that amount in order to take account of the specific impact of the offending conduct of each party. Hence, on the basis of their respective sales in the sector concerned, the parties were divided into three groups and the amount used in respect of the gravity of the infringement for the first group referred to in recital 95 of the Decision, concerning Brasserie de Luxembourg, was set at EUR 500 000 (recitals 92 to 95). Arguments of the parties 199 Brasserie Nationale complains that the Commission did not provide an adequate statement of reasons for the initial basic amount for the first group of undertakings referred to in recital 95 of the Decision, which amount affects all the calculations for each party. That prevents judicial review of the fine imposed on Brasserie Nationale and therefore justifies annulment of the fine. 200 The Commission contends that this part of the second plea is not well founded. Findings of the Court 201 In the light of the requirements as regards stating reasons referred to in Article 253 EC and recalled in paragraph 142 above, it must be held that, having regard to the information contained in recitals 92 to 95 of the Decision, Brasserie Nationale was fully in a position to raise pleas alleging that the calculation criteria that led the Commission to use the amount of EUR 500 000 for the first group referred to above were unlawful. 202 It is clear from those recitals that the Commission arrived at that amount by first classifying the infringement as serious and then taking account of the economic capacity of Brasserie de Luxembourg to cause damage to other operators, of the need to set the amount of the fine at a sufficiently deterrent level, and of the specific weight of its offending conduct, determined on the basis of its sales in the Luxembourg on-trade. 203 Hence, the fourth part of the second plea must be rejected. 204 As all the parts of the second plea have been rejected, the second plea must be rejected in its entirety. 205 Consequently, the present actions must be dismissed in their entirety. Costs 206 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 207 Since the applicants have been unsuccessful, they must be ordered to pay the costs, as applied for by the Commission. On those grounds, THE COURT OF FIRST INSTANCE (Second Chamber) hereby: 1. Dismisses the actions; 2. Orders the applicants to pay the costs. Meij Forwood Pelikánová Delivered in open court in Luxembourg on 27 July 2005. H. Jung A.W.H. Meij Registrar President Table of contents Facts The contested decision Procedure Forms of order sought by the parties Law 1. First plea: infringement of Article 81(1) EC Assessment of the object of the Agreement (third, fourth and first parts of the first plea) The contested decision Arguments of the parties – Allegedly wrong classification of the Agreement as having the object of maintaining clienteles (third part of the first plea) – Allegedly wrong classification of the Agreement as having the object of impeding the penetration of the Luxembourg on-trade (fourth part of the first plea) – Failure to take sufficient account of the context of the Agreement in assessing its object (first part of the first plea) Findings of the Court – Allegedly wrong classification of the Agreement as having the object of maintaining clienteles (third part of the first plea) – Allegedly wrong classification of the Agreement as having the object of impeding the penetration of the Luxembourg on-trade (fourth part of the first plea) – Failure to take sufficient account of the context of the Agreement in assessing its object (first part of the first plea) Second part of the first plea, alleging that the Commission wrongly concluded that the Agreement applied where no ‘beer tie’ existed The contested decision Arguments of the parties Findings of the Court Fifth part of the first plea, alleging that the Agreement had no appreciable effect on competition The contested decision Arguments of the parties Findings of the Court – Alleged error of assessment – Alleged failure to state reasons 2. Second plea: infringement of Article 15(2) of Regulation No 17 and non‑compliance with the obligation to state reasons enshrined in Article 253 EC First part of the second plea, claiming that the infringement was not committed intentionally The contested decision Arguments of the parties Findings of the Court – Alleged error of assessment – Alleged failure to state reasons Second part of the second plea, alleging an error of assessment as to the gravity and duration of the infringement The contested decision Arguments of the parties Findings of the Court – Gravity of the infringement – Duration of the infringement Third part of the second plea, alleging failure to apply the Guidelines with regard to mitigating circumstances The contested decision Arguments of the parties Findings of the Court Fourth part of the second plea (raised only in Case T‑49/02), alleging the failure to state reasons for the initial basic amount used by the Commission for calculating the fines The contested decision Arguments of the parties Findings of the Court Costs * Language of the case: French.

This is an application about the witness immunity rule. The Defendant applies to strike out, or alternatively for summary judgment, on the ground that the Claimant's pleaded causes of action are based on allegations that witnesses gave false evidence to a court or made false witness statements and are therefore barred by the immunity rule. The Claimant responds that the frauds it alleges were carried out by employees of the Defendant who invented conversations and placed these in electronically created records which were in turn exhibited to a witness statement. The Claimant submits that these actions and the records of them are not covered by witness immunity. This action was brought on 7th October and the application was issued immediately on 12th October and heard by me on 30th October. So the case is at an early stage. The Claimant's resistance to the application raised, as is evident from the skeleton argument of their Counsel, several grounds. In the course of the hearing these were reduced to one so it will be necessary for me to refer to only one of the cases in the bundle of authorities. Background The Claimant ("Accident Exchange") is a credit hire company. It provides hire cars to drivers whose vehicles have been damaged in accidents due to the alleged negligence of another driver. Accident Exchange recovers its hire charges through legal steps, including proceedings, which it brings in the name of the client against the allegedly negligent driver and thus in effect against that person's insurers. The Defendant ("Autofocus") is a company which, among other things, provides evidence at the request of solicitors acting for the insurers of Defendants to actions brought by customers of Accident Exchange. Autofocus provides evidence to show the extent to which Accident Exchange's hire charges are greater than the market rates at which equivalent vehicles can be hired on the same or similar terms. According to the Particulars of Claim this service involves provision of a standard form witness statement made by a named employee containing evidence of a "rate survey" which he or she has carried out by telephone. The author of the statement claims to have telephoned a large number of local car hire companies pretending to be a member of the public who wants to hire a particular car on terms designed to replicate that of the hire by the Claimant to the customer who has brought a claim. The employee then records the responses and identifies in the report the terms of any offers, usually about five, which he or she is able to elicit. Autofocus is paid for this work. Accident Exchange claims that in many cases Autofocus employees dishonestly invented all or part of these conversations. The Claimant alleges that as a result it has suffered loss in two ways. First courts have been misled by false evidence into reducing awards of damages. Secondly, in other cases, the Claimant has been misled by false evidence into accepting lower sums than it would have done if the rate survey evidence had been truthful. As a result Accident Exchange claims damages which it estimates at some £20 million alleging that Autofocus is liable for the torts of conspiracy to use unlawful means, interference with the Claimant's trade or business by unlawful means and deceit. It is common ground that for the purpose of this application the court should proceed on the basis that the primary facts alleged in the Particulars of Claim are true. I do not consider whether the facts if proved would give rise to the causes of action pleaded. It is also agreed that I should decide the witness immunity issue rather than just apply summary judgment or strike out criteria. Facts The Particulars of Claim rely on what is said to be a sample of cases falling into three categories. First there are seventy actions in which allegedly false rate surveys were carried out in 2007, 2008 and 2009. Secondly, there are twenty actions yet to be heard in which rate surveys were carried out in 2008 and 2009 and thirdly, there are twenty actions in which awards based on rate survey evidence have already been made. For the purposes of this application ten cases have been selected as representative of the conduct complained of. These are said to show that evidence prepared by employees of the Defendant was incorrect in different ways, examples of which are as follows. The hire company said to have provided a quotation was not trading at the time of the enquiry or hire. The alleged enquiries did not take place in the way alleged or, sometimes, at all. The identified hire company providing the rates did not employ the person said to have been contacted and spoken to. The hire company did not have a vehicle available for hire as alleged by the employee. The application is illustrated by a witness statement of Mr George-Broom of Autofocus and its exhibit prepared for use in the Sheffield County Court. The witness states that he is a rates surveyor for Autofocus and that an important part of his role entails surveying rates available in the UK self drive hire market and preparation of analyses. He refers to the fact that Autofocus produces a generic market research report on the rates charged for hire of many types of vehicle and that these are commonly bought by major hire companies to help them assess market rates. He states that Autofocus also conducts specific surveys of rates for particular types of vehicle in a particular area when commissioned to do so. He refers to being instructed by solicitors to ascertain the hire rate for a Mercedes convertible in the Sheffield area for particular numbers of days. He says that in order to conduct the survey he prepared a "checklist/response sheet" to replicate the conditions of the hire in question and exhibits this. He records that he conducted a spot hire survey on 28 April 2009 identifying seven companies from a directory and from Google. He exhibits his search and the list of companies which provided him with information. He exhibits the completed checklist from the exercise. He then exhibits a completed spreadsheet showing the rates surveyed compared to Accident Exchange rates. He also exhibits that information in graphical form before producing further material from the Autofocus database, a comparison of the rates and finally an insurance quote. The process thus involves two stages. First the witness investigates the facts (or purports to do so) recording the results in the checklist/response sheets and the spreadsheet. Secondly, a witness statement is prepared setting out the results of the investigation and exhibiting the relevant documents. Although the stages are distinct one takes place soon after the other and sometimes they are almost simultaneous. The Issues It is common ground that nothing turns on the question of whether the Defendants are giving factual or expert evidence. It is also common ground that the witness immunity rule covers both evidence given by a witness in court and that given in a witness statement, whether or not that statement is put in evidence. Before the hearing it appeared that the parties might differ on the question of whether the witness immunity rule extends to cover all causes of action including those pleaded in this case but it transpired that that was common ground also. The central question is whether the materials exhibited to the witness statements produced by Autofocus employees are also subject to the witness indemnity rule. The answer to that question turns, in effect, on the application to the assumed facts in this case of the principles considered by the House of Lords in Darker -v- Chief Constable of the West Midlands Police [2001] 1 AC 435. In that case the House of Lords reversed decisions of the Court of Appeal and of the judge upholding witness immunity and decided, as the headnote records; " that public policy required in principle that those who suffered a wrong should have a right to a remedy; that, although the absolute immunity from action given in the interests of the administration of justice to a party or witness, including a police witness, in respect of what he said or did in court extended to statements made for the purpose of court proceedings and to prevent him being sued for conspiracy to give false evidence, public policy did not require it to be extended to things done by the police during the investigative process which could not fairly be said to form part of their participation in the judicial process as witnesses; that, in particular, the immunity did not extend to cover the fabrication of false evidence; and that, accordingly, the plaintiffs' statement of claim should not have been struck out and the action should be allowed to proceed to trial." The case must of course be read as a whole and in its entirety but Counsel emphasise particular passages. Mr Lazarus for the Defendant submits that the critical distinction is drawn in the following passage from the speech of Lord Hutton at 469:- "The underlying rationale of the immunity given to a witness is to ensure that persons who may be witnesses in other cases in the future will not be deterred from giving evidence by fear of being sued for what they say in court. This immunity has been extended, as I have described, to proofs of evidence and to prevent witnesses being sued for conspiracy to give false evidence. But the immunity in essence relates to the giving of evidence. There is, in my opinion, a distinction in principle between what a witness says in court (or what in a proof of evidence a prospective witness states he will say in court) and the fabrication of evidence, such as the forging of a suspect's signature to a confession or a police officer writing down in his notebook words which a suspect did not say or a police officer planting a brick or drugs on a suspect. In practice the distinction may appear to be a fine one, as, for example, between the police officer who does not claim to have made a note, but falsely says in the witness box that the suspect made a verbal confession to him (for which statement the police officer has immunity), and a police officer who, to support the evidence he will give in court, fabricates a note containing an admission which the suspect never made. But I consider that the distinction is a real one and that the first example comes within the proper ambit of the immunity and the other does not." Mr Benson QC emphasised another passage in the same speech at 471:- "But I consider that the position is different where, as alleged by the plaintiffs in this case, steps are taken prior to the making of a statement of evidence, not for the purpose of making a statement of evidence which the maker intends to be an accurate and truthful one, but for the wrongful purpose of fabricating false evidence which would be referred to in an untruthful statement of evidence. In my opinion immunity should be extended to cover the wrongful fabrication of evidence or of a note which will purport to be used to refresh the memory of the witness in the witness box and which will give the impression to the jury that there is support for the witness's false statement that the suspect made an admission. This view is not in conflict with the principle that immunity (where it exists) is given to a malicious and dishonest witness as well as to an honest witness, and I think that the honest (though negligent) examination of articles to enable a statement of evidence to be made comes within the concept of the preparation of a statement of evidence, whereas the deliberate fabrication of evidence to be referred to in a statement of evidence does not come within that concept. It follows that, in my opinion, the Court of Appeal in Silcott v Comr of Police of the Metropolis 8 Admin LR 633 was in error in stating the immunity rule as widely as it did." Defendant's Submissions Mr Lazarus submits that the exhibit or part of the evidence given in the witness statement has been appended to the statement in tabular form purely for convenience. The data could have been included in the statement in either narrative or tabular form. The Autofocus employee does not use the schedules to strengthen the effect of his evidence by pretending to refresh his memory with material said to have been prepared contemporaneously with the events. The exhibits and statements are prepared at the same time or almost so. He says that the material in the schedules would unquestionably have been within the protection of the witness immunity rule if the data had been included in narrative form in the body of the statements. Nothing can possibly turn on matters of drafting. In the course of the hearing Mr Lazarus relied on other passages in Darker. At 448 Lord Hope identifies a:- "crucial difference between statements made by police officers prior to giving evidence and things said or done in the ordinary course of preparing reports for use in evidence, where the functions that they are performing can be said to be those of witnesses or potential witnesses as they are related directly to what requires to be done to enable them to give evidence, and the conduct at earlier stages in the case when they are performing their functions as in forces of the law or as investigators." Lord Hope goes on, at 449, to draw a distinction between "the act itself" and the evidence that may be given about it or its consequences; "the police officer who is alleged to have given false evidence that he found a brick or drug in the possession of the accused or that he heard an accused make a statement or a remark which was incriminating is protected because the allegation relates to the content of his evidence. He is entitled to the immunity because he was speaking as a witness, if he had made the statement when he was giving evidence, or speaking as a potential witness, if he made it during his preliminary examination with a view to his giving evidence." Lord Clyde (at 460) says:- "But that is not to say that everything said or done by anyone in the investigation or preparation for a judicial process is covered by the immunity. In drawing the line in any particular case it may be necessary to study precisely what was being done and how closely it was linked with the proceedings in court. No immunity should attach to things said or done which would not form part of the evidence to be given in the judicial process." On the Defendant's case the exhibits were prepared entirely for the judicial process and so fall within the immunity. Claimant's Submissions Mr Benson QC submits that the conspiracy which his client alleges preceded the adoption of the process of obtaining rates, the employees not being actual or potential witnesses at the time when they agreed to give false evidence. As Darker points out the witness immunity rule is founded on public policy but has to be reconciled with another public policy that those who suffer wrong should have a right to a remedy. He submits that there are two stages when a potential witness is paid to investigate matters. First the investigation has to be carried out. Secondly (and sometimes almost simultaneously) the results must be attached to a witness statement supported by a Statement of Truth. After the phone calls are made a decision has to be taken about which calls are to be included in the statement. There is a distinction between the investigation and the statement, only the second stage attracting immunity. In essence he equates the exhibits with the wrongful fabrication of evidence or of a note which will be used to give spurious support for a witness's memory of what he says in the witness box. Decision of the Court If the facts alleged by the Claimant are true, as I must assume for the purpose of this application, it has sustained financial loss as a result of disgraceful and dishonest conduct by the employees or agents of the Defendant. As Darker and the earlier cases explain public policy requires in principle that the Claimant should have a right to a remedy. Another aspect of public policy requires the Defendant to have the absolute immunity of action given in the interests of the administration of justice to a party or a witness in respect of evidence in court or statements made for that purpose. This application relates not to evidence or statements but to what for brevity I have called exhibits. The House of Lords in Darker concluded that the witness immunity rule was somewhat less extensive than previous authority had suggested. Thus at 448 and 449 Lord Hope holds that in the earlier case of Silcott Simon Brown LJ went too far in saying that immunity extended to acts to procure false evidence such as the planting of a brick or drug or the fabrication of the record of interview. Lord Hope said that this overlooks the distinction between the act itself and the evidence that may be given about the act or its consequences. He draws a distinction on the basis that:- "acts which are calculated to create or procure false evidence or to destroy evidence have an independent existence from, and are extraneous to, the evidence that may be given as to the consequences of those acts." "It is unlikely that those who have fabricated or destroyed evidence would wish to enter the witness box for the purpose of admitting to their acts of fabrication or destruction. Their acts were done with a view to the giving of evidence not about the acts themselves but about their consequences. The position is different where the allegation relates to the content of the evidence or the content of statements made with a view to giving evidence, and not to the doing of an act such as the creation or the fabrication of evidence. The police officer who is alleged to have given false evidence that he found a brick or drug in the possession of the accused or that he heard an accused make a statement or a remark which was incriminating is protected because the allegation relates to the content of his evidence. He is entitled to the immunity because he was speaking as a witness, or if he made the statement when he was giving evidence, or was speaking as a potential witness, if he made it during his preliminary examination with a view to his giving evidence." Elsewhere in the speeches there are passages which support the cases put forward by each party. This is because the facts in this case are different from Darker, most obviously in that the role of the Defendant's employees differs from that of the police who have a function to investigate distinct from their potential participation in the judicial process as witnesses. The Defendant's employees have no investigative role independent of making enquiries with a view to giving evidence. That does not mean that everything they create is subject to the immunity. The distinction which Lord Hutton describes as appearing to be a fine one may be even finer in this case but it is real nonetheless. There is a difference between the material created when making inquiries and the witness statement then prepared for the judicial process as is illustrated by the passages from the speech of Lord Hutton at 469 E to H referred to above. It does not seem to me that the distinction between a statement and an exhibit is any more fine or invidious than that drawn between writing down a false confession in advance on the one hand and falsely claiming this later in the witness box, on the other. As Lord Hope puts it at 449 G "The purpose of the immunity rule is to protect the witness in respect of statements made or things done when giving or preparing to give evidence. The acts of the witness in collecting material on which he may later be called to give evidence are not protected by the immunity. The immunity extends only to the content of the evidence which the witness gives or is preparing to give based on that material." The exhibits are material collected on which the potential witness may be called to given evidence and are not, as I see it, subject to the immunity. Conclusion As I have concluded that the exhibits do not attract immunity this application is dismissed. However the Claimant's position has moved on in the course of its resistance to the application and amendments to the Particulars of Claim may be required to reflect what is now conceded to be the subject of immunity. There are also, as I understand it, further interlocutory issues to be resolved. If these cannot be agreed I will decide them when handing down judgment. I shall be grateful if the parties will let me have corrections of the usual kind and a draft order, preferably agreed, not less than 48 hours before this judgment is handed down. GH014458/MVF

Lord Justice Beatson : This application under section 288 of the Town and Country Planning Act 1990 ("the Act") concerns Mere Park Garden Centre, part of a complex on land at the junction to the east of the A41 and the A518, south of Stafford Road, Newport, Shropshire. Planning permission for the garden centre was granted by Telford and Wrekin Council ("the Council") to Growing Enterprises Ltd, the Interested Party in these proceedings, on 28 August 2002. The Council applies for an order quashing a decision of the Secretary of State's Inspector, Mr David Murray, dated 5 April 2012. The Inspector allowed an appeal by Growing Enterprises against a decision of the Council refusing an application by the company under section 192 of the 1990 Act for a certificate that the proposed use of the land and buildings for any purpose within Class A1 of the Town and Country Planning (Use Classes) Order 1987 SI 1987 No 764, as amended ("the UCO"), is lawful. The aim of that application was to obtain a certificate that the site benefits from an unrestricted Class A1 use, i.e. the use as shops, including those for the retail sale of goods. The outcome of the appeal was that the Inspector issued a certificate stating that use to be lawful. The appeal, under section 195 of the Act and this application concern condition 19, one of 32 conditions of the 28 August 2002 planning permission for the garden centre. Condition 19 stated: "prior to the garden centre hereby approved opening, details of the proposed types of products to be sold should be submitted to and agreed in writing by the local planning authority". Although Growing Enterprises supplied a list of products to the Council, the Council did not provide its written agreement. In another planning permission, however, it referred to the products as "previously approved". In the appeal in this case, the issue before the Inspector was whether condition 19 restricted the products which could be sold to those specified in the list supplied. The Inspector held that it did not. The grounds upon which the Council seeks an order quashing the Inspector's decision are that the Inspector erred in his application of the law. It principally relies on the statements in the Court of Appeal in Hulme v Secretary of State for Communities and Local Government [2011] EWCA Civ 638 and other cases that conditions in planning permissions should be read in context and be given a sensible and reasonable interpretation. It submitted (see statement of facts and grounds, especially paragraph 24) that the Inspector failed to apply Hulme's case correctly, and indeed (ibid, paragraph 27) that his approach to it was in part irrational. Mr Dove QC, on behalf of the Council, submitted that a reasonable reader of the grant of planning permission and the reason for condition 19, and in knowledge of the type of development permitted, would know that the condition restricted the products which could be sold to those specified in the list supplied. The grounds also maintain that the Inspector adopted an irrational interpretation of the word "should" in condition 19 and the implications of its use in this context. In his skeleton argument (see paragraphs 18 – 22) and oral submissions, Mr Dove additionally submitted that the Inspector, in paragraphs 13 and 15 of his decision letter ("DL") either did not regard condition 19 as discharged, or was muddled in relation to whether it had been discharged. He submitted that the Inspector fell into public law error by having regard to an immaterial consideration, perverse reasoning, or by failing to have regard to a material consideration, "namely the correct legal consequences of condition 19 not being discharged". The evidence on behalf of the Council is in the statement of Jonathan Eatough, the Council's Assistant Director for Law, Democracy and Public Protection, dated 9 May 2012. That on behalf of Growing Enterprises Ltd is in the statement of Clive Roberts, the Principal of Kembertons, a town planning consultancy. The legal framework: Background: As is well known, permission is generally required for any development of land or buildings. Subject to specified exceptions, "development" is defined by section 55(1) of the Act as meaning, inter alia "the making of any material change of use of any buildings or … land". When permission is granted the local planning authority has wide power to impose conditions. Unauthorised development and failure to comply with any condition in a grant of permission may result in enforcement action being taken by the local planning authority: section 171A of the Act. Certificate of Lawful Use: A person contemplating a proposed use of land or buildings, who wishes to ascertain whether it would be lawful may, as Growing Enterprises did in this case, apply to the local planning authority: section 192(1). If the planning authority is satisfied that the use would be lawful it is required to issue a certificate to that effect: section 192(2). By section 191 of the Act: "(2) For the purposes of this Act uses and operations are lawful at any time if: (a) no enforcement action may then be taken in respect of them (whether because they did not involve development or require planning permission or because the time for enforcement action has expired or for any other reason); and (b) they do not constitute a contravention of any of the requirements of any enforcement notice then in force." By section 193(5): "A certificate under section 191 or 192 shall not affect any matter constituting a failure to comply with any condition or limitation subject to which planning permission has been granted unless that matter is described in the certificate." The Use Classes Order: One of the exceptions to the requirement of planning permission for development concerns uses within the same class of use as the current use of the land. Section 55(2)(f) of the Act deems the following not to involve development: "In the case of buildings or other land which are used for a purpose of any class specified in an order made by the Secretary of State under this section, the use of the buildings or other land or, subject to the provisions of the order, of any part of the buildings or the other land, for any other purpose of the same class." The Secretary of State has so specified in the Town and Country Planning (Use Classes) Order 1987 SI 1987 No 764, "the UCO", to which I have referred. Article 3 of the UCO provides inter alia: "(1) Subject to the provisions of this Order, where a building or other land is used for a purpose of any class specified in the Schedule, the use of that building or that other land for any other purpose of the same class shall not be taken to involve development of the land." One of the classes specified in the Schedule is Class A1, "Shops". Class A1 includes use for all or any of eleven purposes, including: " (a) for the retail sale of goods other than hot food, … where the sale, display or service is to visiting members of the public." Government guidance: The current guidance is in Circular 11/95, The Use of Conditions in Planning Permissions. This deals with the requirements of necessity, relevance to planning and the development, reasonableness, enforceability, and the need for precision. In this case it is the last of these which is relevant. The guidance on precision is contained in a single paragraph which states: "Test of Precision 30. The framing of conditions requires care, not least to ensure that a condition is enforceable. A condition, for example, requiring only that "a landscape scheme shall be submitted for the approval of the local planning authority" is incomplete, since if the applicant were to submit the scheme, even if it is approved, the local planning authority is unlikely to be able to require the scheme to be implemented. In such a case the requirement that needs to be imposed is that landscape work shall be carried out in accordance with a scheme to be approved in writing by the local planning authority; and the wording of the condition must clearly require this…" Two appendices to the guidance contain suggested models of acceptable conditions for use in appropriate circumstances, and conditions which are unacceptable. The guidance refers to the utility of model conditions in improving consistency and efficiency in processing applications, but also to the danger that their existence may encourage the use of conditions as a matter of routine. There are two model conditions on restricting use. Model Condition 48, which was referred to by the Inspector, is: "This premises shall be used for … and for no other purpose (including any purpose in Class … of the Schedule to the Town and Country Planning (Use Classes) Order 1987, or in any provision equivalent to that Class in any statutory instrument revoking and re-enacting that Order with or without modification." Model Condition 49 states: "The premises shall not be used for the sale of food for consumption off the premises other than confectionary". The role of the High Court: Section 288 of the Act provides a right to make an application to the High Court to challenge an Inspector's determination of a planning appeal on the familiar public law grounds that the determination was not within his powers or that any of the relevant requirements have not been complied with: the classic statement is in the judgment of Forbes J in Seddon Properties Ltd v Secretary of State (1978) 42 P & C R 26 at 26-28. As to the approach to be taken, I deal with the position of conditions at [33]. Otherwise, in the context of this application, it is possible to be brief. Decision letters must be read in a straightforward way recognising they are addressed to parties well aware of the issues involved and with references understood in the context of the general thrust of their reasoning: South Bucks DC v Porter (No.2) [2004] 1 WLR 1953, UKHL 33 at [36] (Lord Brown of Eaton-under-Heywood) and South Somerset DC v Secretary of State for the Environment [1993] 1 PLR 80 at 83 (Hoffmann LJ). Where an error is identified in a decision, the error must materially affect the decision taken: Bolton MBC v Secretary of State for Environment (1990) 61 P&CR 343, at 352, principles 2 and 3. Secondly, even where it is possible to hold that a decision is invalid, in exceptional circumstances the Court has discretion whether or not to grant relief: Bolton's case op cit., at 353 principle 7. Thirdly, where the relevant requirements have not been complied with the court only has power to quash it where the interests of the applicant have been substantially prejudiced: section 288(5)(b) of the Act. Background and the Inspector's decision: The decision on 28 August 2002 granting planning permission for the garden centre described the proposal as "erection of a garden centre and ancillary outbuildings with adjacent car parking". I have set out condition 19. Condition 2, which is mentioned in the Inspector's decision letter, required the development to be carried out strictly in accordance with the deposited plans and drawings. Conditions 3, 6, 7, 9 and 10 stated that "no development is to take place until…" what is specified has occurred, and condition 9 also stated that "the agreed details shall be fully implemented before the buildings hereby approved are brought into use". Conditions 22 and 29 stated that "no development approved by this permission shall be commenced until …" what is specified has occurred. Condition 30 stated that a scheme for the noise alleviation of the development "shall be submitted to the local planning authority for approval in writing. The approved scheme shall then be implemented fully prior to the opening of the development hereby approved". As to condition 19, the reason for that condition was "to ensure that the garden centre's main business remains seasonal, specialist and leisure-orientated as required by policy S4 of the Wrekin Local Plan". The explanatory text to Policy S4 in the Wrekin Local Plan stated: "Garden centres are not normal retailers. Although their products are often comparison [sic] in type and so similar to those offered by other comparison retailers, the main business remains seasonal, specialist, and leisure orientated. Locations within existing retail centres may not always be appropriate." (§5.3.9) In a letter dated 24 September 2002, Growing Enterprises Ltd wrote to the Council's planning officer stating: "[A]s a condition of planning, we have to agree what Mere Park Garden Centre will stock and sell. We have endeavoured to follow the Garden Centre Association's guidance on products that a centre of excellence would be expected to stock. Additionally, we have provided details of some categories that we would most definitely not stock." The letter listed 24 categories of goods that would or could be sold (e.g. plants, shrubs, flowers and trees) or not sold (e.g. cars and white goods). It was common ground before the inspector (DL § 5), as it still is, that the Council has not replied to the letter. The letter was, however, referred to by the Council in the conditions imposed on a subsequent planning permission granted to Growing Enterprises Ltd on a different part of the site. The permission for the erection of a new retail unit dated 7 March 2008 (planning permission 2005/1497) stated that "the premises shall only be used to retail those products previously approved by the Council and which are set out in the two letters from Growing Enterprises Ltd dated 24 September 2002 and 12 March 2003" (emphasis added). The garden centre opened on 20 March 2003. At this point I break into the chronological account of the planning permission before me to note two matters. The first is that paragraph 2.14 of Growing Enterprises Ltd's "appellant's case statement" for the appeal to the Inspector, prepared by Mr Roberts in November 2011, stated: "Whilst the Appellant did not receive a response from Telford and Wrekin Council, it is accepted that [condition 19] was discharged (as referred to in condition 3 of planning permission 2005/1497)." In his evidence for this application, Mr Roberts stated that what he in fact meant by that was that Growing Enterprises had discharged its obligation but that, as a matter of fact, the list had not been approved. The second matter concerns a number of other planning permissions granted by the Council between 2003 and 2009 on land on the wider site but outside the garden centre with which this case is concerned. The conditions in the permissions granted on 13 May 2003 and 11 August 2004 for a farm shop and a retail unit expressly prohibited use for "any other purpose in Class A1". That granted on 7 March 2008 stated "the premises shall only be used to retail those products previously approved by the Council which are set out in the two letters from Growing Enterprises Ltd dated 24 September 2002 and 12 March 2003 …. Those products specifically excluded in those letters cannot be sold at any time". There was a similar provision in the permission granted on 17 August 2009. Returning to the position of the application site, on 24 March 2010 Growing Enterprises made its application for a certificate of lawful use or development. It sought confirmation that the proposed use of the land and buildings for any retail purpose within Class A1 of the UCO is lawful. The Council refused the application in a decision dated 14 July 2010. It did so principally on the ground that use as a garden centre was not a retail use that fell within Class A1 of the UCO but a sui generis use. The reasons stated: "When the planning permission is read as a whole, including in particular the description of the development granting planning permission as well as the planning conditions and the reasons for the conditions in particular 2 and 19 and the reasons therefore (sic), it is clear that the grant of planning permission was for the erection of a garden centre. The use of the land and the buildings was thereby defined and restricted." … The garden centre i[n] this instance is required by condition 2 to have both internal and external sales area and by condition 19 to have a restriction on goods to be sold. It is a sui generis use." A second reason is contained in the last three paragraphs of the decision. It is stated that if, contrary to the Council's contention "the lawful permitted use is able to be argued to be a Class A1 shop", the use was "not authorised for any purpose falling within Class A1 …. but authorised for use as a garden centre only and further restricted by conditions" and that the grant did not include lawful use other than as a garden centre. At the appeal before the Inspector, in the light of the decision in Wiggins v Arun DC (1997) 74 P & CR 64, the Council abandoned the contention that use as a garden centre was not within Class A1 of the UCO but a sui generis use. The consequence of the use as a garden centre falling within Class A1 is that section 55(2)(f) of the 1990 Act applies so that the "default position" is that, absent an adequate restriction in a condition, a permission within Class A1 can be used for any other purpose in the same class. Accordingly, in this case, the question, described by the Inspector (DL §6) as the critical question, was whether "the garden centre premises [we]re restricted in the products that can be sold by condition 19, or whether the premises can operate as a general shop within Class A1 with no restriction on the goods sold". On this question, the Council's case before the Inspector was:- (1) Carter Commercial Development Ltd v Secretary of State for the Environment [2002] EWHC 1200 (Admin) at [49] and Hulme's case [2011] EWCA Civ 638 at [13(c)] showed a condition in a planning permission should be interpreted benevolently and not narrowly or strictly. (2) A common sense reading of Condition 19 was that items not on the list of the "products to be sold" provided by Growing Enterprises could not be sold, so that its effect was to restrict the products which could be sold in the Garden Centre, and to control the proposed new use within Class A1. (3) Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin) in which Sullivan J, as he then was, referred to the need for restrictions in conditions to be clearly and expressly imposed was distinguishable from the present case on the ground that it concerned enforcement rather than an application for a lawful development certificate. The Inspector considered: (a) the Council's intentions in imposing the condition and, (b) "the nature of restriction on the face of the permission". As to (a), he stated (DL §7) that it was "reasonably clear that the Council considered the proposed garden centre to be a different planning entity to that of a general retail use", and that it "intended the imposition of condition 19 to ensure that in practice there would be a distinction between the seasonal, specialist, and leisure orientated products sold in the garden centre and a general Class A1 retailing use". He also stated that Growing Enterprises appeared to have understood that was the planning restriction in force in view of the terms of its letter to the Council dated 24 September 2002 (see [20] above). Despite this intent and understanding, the Inspector concluded that condition 19 was not a restriction which was effective to remove this permission from the "default position" established by 55(2)(f) of the 1990 Act. His starting point (DL §11) was to refer to the advice in Circular 11/95. The Circular he stated, made it "exceptionally … possible to restrict development … which would not be regarded as development, for example under the [UCO] where there is a clear planning purpose for such a restriction". He set out Model Condition 48 (which is set out at [15] above), which, after identifying the permitted use within a Class expressly precludes the operation of the UCO by stating that the use shall be for no other purpose including any other purpose in that Class. Turning to condition 19, the Inspector accepted (DL §12) that although it "does not refer to the UCO nor explicitly remove from the permission any of the benefits of the [UCO] as applying to the development", the failure to refer to the UCO does not in itself make the condition ineffective. He then turned to the words used and concluded that the condition did not limit the retail use to only that of a garden centre or require the operator to sell only the products on the list Growing Enterprises supplied. The material paragraphs of his decision letter are: "13. … [T]he wording of the condition does not say that the garden centre development and use permitted is limited by the imposition of the condition. The condition merely requires that before the store opens, the appellant should provide details of the proposed type of products to be sold for the Council's agreement. The appellant did this and a common sense view is that the requirements of the condition were discharged, especially as the Council did not respond and "agree" the details to give the condition affect [sic]. 14. Further, the wording of the condition requires only that the "proposed types of products to be sold" should be submitted and agreed in writing by the local planning authority before the store can open, but it does not clearly state that only these products and no others are to be sold at any time. There is therefore no clear performance of compliance limitation imposed. This is a material omission when compared with the guidance set out in Circular 11/95 ( in particular paragraph 30). 15. Finally, the requirements of the condition are only that details of the proposed types of products should be submitted for the Council's approval, that is, there is a degree of discretion involved regarding compliance. Notwithstanding the fact that a list was submitted, the use of the word "should" ( which is defined by the Concise Oxford Dictionary as " to express a duty, obligation or likelihood") is not the same as a requirement specified as "shall" which leaves no room for discretion. 16. The Council says that the failure to attach an explicit compliance requirement does not render the condition to be ineffective and unenforceable, as it was held in the case of Sevenoaks[1] and the Council now refer me to the more recent decision of the Court of Appeal in Hulme. In this, the Court applied a benevolent doctrine of the construction of the condition and said that a condition could be interpreted in the context of the whole decision and against the background of the decision-maker's objectives and intentions. 17. However, I see the latter case as materially different in that while the Court held that the specific condition did not have a performance limitation that could be enforced, it was reasonable that the conditions should be read in the context of the decision notice as a whole and in conjunction with other related conditions which gave affect [sic] to the same purpose. Such circumstances do not exist in the current appeal as no other condition deals with a limitation on the use or prohibits the sale of other goods and which can be enforced. 18. I conclude that the wording of the condition is seriously flawed in terms of the Council's intentions for the planning purpose it was supposed to achieve and with regard to national guidance on the drafting of planning conditions. Using the ordinary meaning of the words involved, the actual but limited requirements of the condition were satisfied by the submission of the details. These requirements were not so ambiguous or absurd to be void because of uncertainty. Nevertheless, these requirements even if the details had been approved by the Council, did not limit the nature of the use of the goods that may be sold and explicitly restrict the ones that could not. 19. I therefore conclude that, giving the words within the condition their ordinary and natural meaning and reading the overall requirements in a common sense and benevolent way, I find that the condition does not limit the retail use to that only of a garden centre nor require the operator to sell only the products on the submitted list and nothing else. In short, the use approved is a general Class A1 retail use." Analysis I have summarised Mr Dove's submissions at [5] and [6]. At their core is the argument that the common sense approach to the construction of condition 19 required by the authorities and exemplified by the decision of the Court of Appeal in Hulme v Secretary of State for Communities and Local Government [2011] EWCA Civ 638 results in the conclusion that it restricted the products to be sold to those on the list provided by Growing Enterprises to the Council and that the Inspector's decision erred in law because he misunderstood and failed to apply that decision correctly. At the core of the submissions of Mr Strachan and Mr Lockhart-Mummery is the argument that well-established principles as to the construction of conditions in planning permissions mean that for a condition to impose a restriction it must clearly, unequivocally and unambiguously impose an obligation restricting the use that can be made of premises and prohibiting what goods may be sold from them, that condition 19 does not do this, and that the Inspector did not fall into error. They relied in particular on the decision of Sullivan J as he then was in Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin). Ultimately what has to be resolved is a degree of tension between the approach and analysis of Sullivan J in the Sevenoaks case and that of the Court of Appeal in Hulme's case. The Sevenoaks case involved a condition that was considered clear and without ambiguity. Sullivan J emphasised the need for clarity and certainty on the face of the condition, in particular because a planning permission is a public document which is likely to affect third party rights and the wider public and on which they are entitled to rely, and because breach of a condition may ultimately have criminal consequences. Hulme's case appears to take a less strict approach in the context of words in a condition Elias LJ (at [31]) described as "particularly opaque" imposed by an Inspector when allowing an appeal against the refusal of planning permission by the local planning authority. It was held that the opacity could be resolved by looking at the decision letter as well as the other provisions and conditions in the planning permission. Although the submissions focussed on the Sevenoaks and Hulme cases, a number of other authorities were put before me, including some that were not considered in Hulme's case, and which Mr Lockhart-Mummery said he had been informed by counsel in that case had not been cited to the court. I first summarise my understanding of the effect of the authorities put before me on the construction of a planning permission (and of the conditions in it)[2]:- (1) As a general rule a planning permission is to be construed within the four corners of the consent itself, i.e. including the conditions in it and the express reasons for those conditions unless another document is incorporated by reference or it is necessary to resolve an ambiguity in the permission or condition: R v Ashford DC, ex p Shepway DC [1998] PLCR 12 at 19 (Keene J); Carter Commercial Developments v Secretary of State [2002] EWCA Civ 1994 at [13] and [27] (Buxton and Arden LJJ); Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin) at [24] and [38] (Sullivan J); R (Bleaklow Industries) v. Secretary of State for Communities and Local Government [2009] EWCA Civ 206 at [27] (Keene LJ); R (Midcounties Co-operative Limited) v. Wyre Forest DC [2010] EWCA Civ 841 at [10] (Laws LJ). (2) The reason for the strict approach to the use of extrinsic material is that a planning permission is a public document which runs with the land. Save where it is clear on its face that it does not purport to be complete and self-contained, it should be capable of being relied on by later landowners and members of the public reading it who may not have access to extrinsic material: Slough Estates v Slough Borough Council [1971] AC 958 at 962 (Lord Reid); Carter Commercial Developments v Secretary of State at [28] (Arden LJ); R (Bleaklow Industries) v. Secretary of State for Communities and Local Government [2009] EWCA Civ 206 at [27]) (Keene LJ); Barnett v Secretary of State [2009] EWCA Civ 476 at [16] – [21] (Keene LJ, approving Sullivan J at first instance); R (Midcounties Co-operative Limited) v. Wyre Forest DC [2010] EWCA Civ 841 at [10] (Laws LJ). (3) It follows from (2) that in construing a planning permission:- a. the question is not what the parties intended but what a reasonable reader would understand was permitted by the local planning authority, and b. Conditions must be clearly and expressly imposed, so that they are plain for all to read. As well as the cases cited at (2), see Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin) at [38] and [45] (Sullivan J). (4) Conditions should be interpreted benevolently and not narrowly or strictly (see Carter Commercial Development Ltd v Secretary of State for the Environment [2002] EWHC 1200 (Admin) at [49], per Sullivan J) and given a common-sense meaning: see Northampton BC v First Secretary of State [2005] EWHC 168 (Admin) at [22] (Sullivan J). (5) A condition will be void for uncertainty only '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': Fawcett Properties v Buckingham County Council [1961] AC 636, 678 per Lord Denning. In Hulme's case Elias LJ stated this was an application of the benevolent construction principle. (6) If there is ambiguity in a condition it has to be resolved in a common sense way, having regard to the underlying planning purpose for it as evidenced by the reasons given for its imposition: Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin) per Sullivan J at [38] accepting the submission at [34]. (7) There is no room for an implied condition in a planning permission. This principle was enunciated in Trustees of Walton on Thames Charities v Walton and Weighbridge District Council (1970) 21 P & C R 411 at 497 (Widgery LJ), in the following terms: 'I have never heard of an implied condition in a planning permission and I believe no such creature exists. Planning permission enures for the benefit of the land. It is not simply a matter of contract between the parties. There is no place, in my judgment, within the law relating to planning permission for an implied condition. Conditions should be express, they should be clear, they should be in the document containing the permission.' " This principle also precludes implying an obligation by way of an addition to an existing condition: Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin) at [45] (Sullivan J) (8) Where planning permission containing conditions has been granted in a decision by an Inspector allowing an appeal, and a condition is ambiguous, it is possible to construe it in the context of the decision letter as a whole: Hulme's case at [13(a)]. Doing this does not involve impermissible "implication" from an extrinsic source, but is best described as a question of "construction": Hulme's case at [37]. In Hulme's case, Elias LJ stated (at [37]) that even "if it can be described as an implied condition it is very different in nature from that envisaged in the Trustees of Walton case." (9) In the context of what suffices to exclude the operation of the UCO:- a. A grant of planning permission for a stated use is a grant of permission only for that use, but could not, in itself, be sufficient to exclude the operation of the UCO because if it did, the operation of the UCO would be curtailed in a way which could not have been intended: Dunoon Developments Ltd v Secretary of State for the Environment [1992] JPL 936 at 107 (Sir Donald Nicholls V-C). b. In general, to exclude the operation of the UCO, it is necessary for the local planning authority to do so by the imposition of a condition in unequivocal terms: Carpet Décor (Guildford) Ltd v Secretary of State for the Environment [1981] JPL 806 at 808 (Sir Douglas Frank QC). In the light of these nine propositions, and in particular in view of propositions (3) and (9), I have concluded that the Inspector did not fall into error in his conclusion as to the effect of condition 19. Condition 19, like the condition in the Sevenoaks case, was unambiguous. Accordingly (see [33(1)]) the condition is to be construed within the four corners of the consent, including the other conditions and the reasons for those conditions. What it expressly required was that details of the proposed types of product to be sold should be submitted to the Council before the garden centre opened. The condition itself did not contain a prohibition on selling goods other than those in the list submitted by Growing Enterprises. Its wording does not require it to be construed as including an implementation, an enforcement, or a prohibition clause. The Council appears to have been aware of the policy guidance as to what wording was needed if it wished to restrict the use to be made to that of a garden centre. Conditions 3, 6, 7, 9, 10, 22, 29 and 30 (see [18]) contained implementation clauses. They provided that, until the condition in question was satisfied, no development was "to take place" or to "be commenced". Condition 30 expressly provided that a noise attenuation scheme approved by the local planning authority was to be "implemented fully prior to the opening of the development". The contrast between the wording used in those conditions and that used in condition 19 shows that the context of condition 19 provides no basis upon which it could be justified to include an implementation or prohibition obligation. I also accept Mr Strachan's submission that the Inspector was entitled to recognise the difference in meaning between "shall" and "should", a commonly recognised distinction in our language, even in these days where looser usage is more tolerated. In any event, the Council's submissions on this point can only have traction if it is open to the Council, and it can effectively argue, that condition 19 had not been discharged, or that the Inspector did not regard it as having been discharged. That is because this question of interpretation concerns only whether the submission and agreement of the details of the proposed products before the garden centre was opened was strictly required. As to the approach and the decision in Hulme's case, I do not consider that it in fact assists the Council or puts into question the correctness of the Inspector's approach and conclusion. In Hulme's case the court was dealing with an ambiguous condition relating to blade swish noise in a permission for a wind farm. In the present case the condition is not ambiguous. Secondly, the condition in Hulme's case was imposed by an Inspector when allowing an appeal (albeit it was originally drafted by the Den Brook Judicial Review Group, which had rule 6 status at the inquiry). The Court of Appeal held that the condition was to be construed in the context of the Inspector's decision letter as a whole. The court must have meant that recourse to the decision letter was permitted in addition to construing the condition in question in the context of the planning permission itself and the other conditions in it. In effect, in those circumstances, the court regarded the decision letter as an integral part of the planning permission rather than an extrinsic document: see [33(8)] above. In paragraph 117 of the decision letter in that case, the Inspector stated that he was "in no doubt that in the event of the appeal succeeding, a condition to regulate the phenomena [of AM noise] is both necessary and reasonable". For the reasons I have given, in the present case the remainder of the planning permission and the conditions do not assist the Council because they show that, where it desired to have an implementation condition, it made express provision for it. Elias LJ (at [37]) recognised that if, contrary to his view that having regard to the decision letter was a matter of construction, it was in fact a matter of implication, the analysis of the Court of Appeal was not easy to reconcile with the Sevenoaks case. He did not, however, cast doubt on that case. He distinguished it as one concerning conditions in a planning permission which were not to be read against the background of a decision letter. That is also the position in the present case. Finally, Hulme's case was not concerned with whether a condition excluded the operation of the UCO. The cases to which I have referred as supporting the propositions at [33(9)(a) and (b)] show the strictness of the approach where it is contended that words in a condition exclude the operation of the UCO. So, in Dunoon Developments Ltd a condition that the use of the premises "shall be limited to the display, sale and storage of new and used cars" was held not to exclude the operation of the General Development Order. In Carpet Décor (Guildford), a condition that "no variations from the deposited plans and particulars will be permitted unless previously authorised" by the Local planning authority was held not to exclude the operation of the UCO. Rugby Football Union v Secretary of State [2001] EWHC 927 (Admin) at [56] provides an example of what will suffice. Ouseley J held that a condition that stands were only to be used "ancillary to the main use of the premises as a sports stadium, and for no other use…" sufficed to exclude the UCO because it had no other sensibly discernible purpose. This case, where the condition does not contain a prohibition on selling goods other than those in the list, let alone expressly disapply the operation of the UCO, falls on the Dunoon Developments Ltd/Carpet Décor (Guildford) side of the line. To the extent that there is a potential conflict of approach between Hulme's case and the Sevenoaks case, I make one observation. While the Court of Appeal was aware of the rule precluding the implication of conditions in planning permissions, there is no reference in the principles summarised by Elias LJ or elsewhere in the judgments to what earlier cases, including earlier decisions of the Court of Appeal, have said about the proper approach to extrinsic evidence in such cases. There is no reference to this aspect of the Court of Appeal's decision in Carter Commercial Developments v Secretary of State, or to the other cases referred to in [33(1)]. There is also no reference in Hulme's case to the cases I relied on for my summary in [33(2)(a)], that the question is not what the parties intended but what a reasonable reader would understand was permitted by the local planning authority. In that case, the Court of Appeal was considering the prospect of quashing a decision letter very recently issued by the Inspector so as to enable the conditions to articulate less ambiguously a restriction which all parties agreed should exist. In that context, it is understandable that there was no need for the court to discuss the reason for the strict approach to extrinsic material which I have summarised at [33(2)]. In the present case, the condition has been in existence since 2002 and the rationale summarised at [33(2)] was fully applicable. In these circumstances, the proposition at [33(2)(a)] that the question is not what the parties intended but what a reasonable reader would understand was permitted is of importance. It may be putting the matter too strongly to say, as Mr Lockhart-Mummery's skeleton argument did (paragraph 30(7)), that the Court of Appeal relied heavily on the intention of the decision-maker. But the judgments do refer to the intention of the decision-maker. See, for example, Elias LJ at [28], [30], [32] (in part summarising submissions made to the court), and Patten LJ's reliance, albeit recognising the dangers and describing the analogy as "limited", to Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10, a case on the construction of contracts. I finally turn to the contention that the Inspector either did not regard condition 19 as discharged, and thus fell into error, or was muddled in relation to whether it had been discharged. The Inspector made it clear in the decision letter (DL § 13) that the requirements of the condition were discharged. The Council and Growing Enterprises accepted that condition 19 had been discharged. If the Inspector's interpretation of the requirements of condition 19 was, as I have held, correct, the condition has no ongoing effect. In view of my conclusion on this, it is not necessary for me to consider Mr Strachan's submission that this point is a new ground of challenge which does not form part of the identified claim, and cannot properly be pursued. For the reasons I have given, this application is dismissed. Note 1    Sevenoaks DC v First Secretary of State [2004] EWHC 771 (Admin).     [Back] Note 2    The summary incorporates the principles set out by Elias LJ in Hulme’s case at [13].     [Back]